Company Tax Rate in Australia – Current Rates, ATO Rules & Small Business Concessions

The company tax rate is the percentage of a company’s taxable income that must be paid to the Australian Taxation Office (ATO). The rate depends on factors like business turnover and whether your company qualifies as a base rate entity.

In 2025, most small to medium Australian businesses pay a 25% company tax rate, while larger businesses pay 30%. At Ozobooks, we make sure your company is classified correctly, so you don’t pay more tax than required.

Current Company Tax Rates (2025)

Type of Company	Turnover Threshold	Tax Rate
Base Rate Entity	Less than $50 million	25%
All Other Companies	Over $50 million	30%

What Is a Base Rate Entity?

A company is considered a Base Rate Entity if it:

• Has aggregated turnover less than $50 million
  
• Derives no more than 80% of its income from passive sources (like rent or dividends)
  

If your business meets both conditions, you qualify for the lower tax rate of 25%.

Key Compliance Notes

• You must lodge an annual Company Tax Return (CTR)
  
• Incorrect classification can lead to ATO penalties or audits
  
• Directors are responsible for ensuring correct tax rate application
  

How Ozobooks Helps

• Reviews your financials to confirm tax rate eligibility
  
• Prepares and lodges your Company Tax Return
  
• Flags income sources that may affect base rate entity status
  
• Plans year-end tax strategies to reduce tax legally
  

FAQ:

Q1: Can I just apply the 25% tax rate automatically?
Only if your business meets the ATO’s base rate entity rules. It’s not optional.

Q2: Is company tax the same as personal tax?
No. Companies are taxed separately at flat rates. Dividends may also be taxed when distributed.

Q3: What if my turnover crosses $50 million one year?
Then your business may move to the 30% rate for that income year.

Q4: Are there tax incentives for small businesses?
Yes. Aside from the 25% rate, small businesses may qualify for instant asset write-offs and simplified depreciation.