Small Business Start Up Finances Guide
Step 12 – Preparing for BAS or Tax Time
One of the things that’s very different for employees versus business owners is that employess have their tax taken out before they get paid.
In contrast, business owners have to pay their tax afterwards.
So, its critical that you put aside a certain percent of your income to cover this.
A good idea here is to have a Reserve Bank Account that you put a certain amount into each week or month. The exact amount depends on your profit but you can’t go too far wrong with 20-30% of your profit (or you can estimate this based on based on X% of your revenue at the end of each month. The exact % will be enough so that you end up with 20-30% of your profit going into the Reserve Account).