Tax and logbook terms for sole traders, in plain English
Short definitions of the words you meet when you keep a logbook, issue tax invoices and do your BAS. Each one links to the ATO page it comes from.
Business, GST and BAS
- ABN
- An Australian Business Number: an 11-digit number that identifies your business.
- BAS
- Business activity statement: the form you use to report and pay GST, and some other taxes such as PAYG instalments, to the ATO.
- GST
- Goods and services tax: a tax of 10% on most goods, services and other items sold or consumed in Australia.
- Sole trader
- An individual running a business: you are its sole owner and controller and legally responsible for its debts and losses.
- Tax invoice
- A document that shows the seller's ABN and the GST in a sale; if a customer asks for one you must provide it within 28 days, unless the sale is $82.50 or less including GST.
Car and logbook
- Cents per kilometre
- An ATO method for car expenses: business kilometres (up to 5,000 per car a year) multiplied by a set rate for the income year.
- Decline in value
- Depreciation: the way the cost of an asset, such as a car, is claimed over time as its value falls.
- Logbook
- A record of your car journeys used to work out how much of the car's use is for business; the first year you use it, keep it for at least 12 continuous weeks.
- Odometer
- The instrument in a vehicle that shows the total distance it has travelled; the difference between two readings is the kilometres driven in between.
- Business-use percentage
- The share of a car's use that is for business: business kilometres divided by total kilometres, times 100.
Put the terms to work
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