Australian accounting & BAS glossary
Plain-English definitions of the most common Australian accounting and BAS terms, written for accounting firms and the small businesses they serve.
ABN (Australian Business Number)
An 11-digit identifier for businesses dealing with the ATO, other government agencies, and other businesses.
ACN (Australian Company Number)
A 9-digit identifier issued by ASIC to every company registered in Australia.
ATO (Australian Taxation Office)
The Australian Government's principal revenue collection agency, responsible for income tax, GST, BAS, PAYG, FBT, and the superannuation system.
BAS (Business Activity Statement)
The form Australian businesses use to report and pay GST, PAYG withholding, PAYG instalments, FBT instalments and other tax obligations to the ATO.
Company (Pty Ltd)
A separate legal entity registered with ASIC. Most Australian SMEs operate as a proprietary limited (Pty Ltd) company.
Division 7A
The anti-avoidance rule that treats certain payments, loans and forgiven debts from a private company to its shareholders or associates as unfranked deemed dividends.
FBT (Fringe Benefits Tax)
A separate tax employers pay on most non-cash benefits (cars, entertainment, expense reimbursements) provided to employees or their associates.
GST (Goods and Services Tax)
A 10% broad-based consumption tax on most goods, services and other items sold or consumed in Australia.
GST-free supply
A supply on which no GST is charged, but the supplier can still claim input tax credits on related purchases.
IAS (Instalment Activity Statement)
A simplified activity statement used by businesses that have PAYG obligations but are not registered for GST, or in months between quarterly BAS lodgements.
Input-taxed supply
A supply on which no GST is charged, and the supplier cannot claim input tax credits on the costs of making it.
Instant asset write-off
A simplified depreciation rule that lets eligible small businesses immediately deduct the full cost of qualifying business assets in the year they're first used or installed.
Open Banking (CDR)
The Australian Consumer Data Right framework that lets accredited recipients access banking data with the customer's explicit consent.
Partnership
Two or more entities carrying on a business together with a view to profit. The partnership lodges its own return but is not separately taxed.
PAYG (Pay As You Go)
The system through which Australian businesses withhold income tax from employees' wages (PAYG withholding) and pre-pay their own income tax (PAYG instalments).
Single Touch Payroll (STP)
Real-time reporting of payroll information, including wages, PAYG withholding, and superannuation, to the ATO at each pay run.
Sole trader
An individual operating a business in their own name. The simplest Australian business structure, with no separate legal entity from the owner.
Taxable supply
A supply on which GST is charged at 10% and on which the supplier can claim input tax credits for related purchases.
TFN (Tax File Number)
A unique 8- or 9-digit identifier issued by the ATO to individuals and entities for tax administration purposes.
Trust
An obligation imposed on a trustee to hold and apply assets for the benefit of beneficiaries. Common Australian forms: discretionary, unit, and hybrid.