Tips

Put money aside for tax & GST

May 1, 2025

Tax Planning Tips for Small Business Owners

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Starting a business means more than just making money — you need to plan for tax, too. This guide explains why putting aside 20% (plus any GST collected) can help you avoid big ATO surprises and how eCashBooks keeps you on track.

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Set Aside 20% for Tax from Day One

When money hits your account, it’s tempting to treat it all like your own. But the ATO will eventually want their cut. A good rule of thumb? Put aside 20% of every dollar you earn into a separate bank account. It’s not exact, but it gives you a decent buffer.

Why 20%?

  • It covers most average tax rates after deductions

  • It’s easy to calculate on the fly

  • It trains you to think like a business owner, not just a spender

Don’t Forget GST If You’re Registered

If you’re registered for GST (because your income will hit $75,000+), you need to put that aside too. GST is not your money — it belongs to the government.

If you charge $110 (including GST), $10 of that needs to be set aside straight away. eCashBooks makes it easy to track what’s yours and what’s not.

The ATO Will Want Tax Quarterly After Year One

Most people don’t know this — but after your first year in business, the ATO usually asks you to pay tax in advance, every quarter.

It’s called Pay As You Go (PAYG) Instalments, and it can be a rude shock if you’re not ready. If you didn’t plan ahead, you’ll be:

  • Paying last year’s tax

  • Paying this year’s tax in quarterly instalments

  • Wondering where all your money went

eCashBooks Helps You Stay Ahead of the Game

eCashBooks gives you the tools to avoid getting stung:

  • Track income and tax at a glance

  • Separate GST from your totals

  • Prepare for BAS (if you’re registered)

  • Record everything in real time so you’re not guessing

  • Add notes, reminders, and even business calendar alerts

Knowing your numbers helps you sleep at night — and grow smarter.

FAQs

Q: Is 20% enough to cover my tax?
A: It depends on your income and deductions, but 20% is a strong starting point. You can adjust once you know your average tax bill.

Q: What if I forget to put money aside?
A: You could be hit with a big bill and not have the cash. That’s why having a second bank account (and discipline) helps.

Q: Do I have to pay tax in my first year?
A: Yes — but it’s usually paid after you lodge your first tax return. The ATO then sets quarterly payments for the next year.

Q: Does eCashBooks remind me to set aside tax?
A: It shows your income, expenses, GST, and reports to help you do just that — plus business tools to keep you organised.

Tax time shouldn’t be a panic attack. Planning ahead is what smart business owners do — and it starts with putting money aside regularly. eCashBooks helps you stay prepared, avoid nasty surprises, and keep your business in the black.

What Next

Stay ahead of tax. Stay in control. Start your free trial at eCashBooks: https://www.ecashbooks.com

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