MBK Business Glossary

Clear, plain-English definitions of key Australian bookkeeping, payroll, BAS, and tax terms for small businesses. Understand what matters, who it applies to, and why — with examples from real business practice.

Something missing you’d love to know about? Let us know and we’ll add it in!

• ABN (Australian Business Number)

  What is it?
  An 11-digit number that identifies your business to the government and community.
  Who does it apply to?
  All businesses operating in Australia, including sole traders.
  Why does it matter?
  You need an ABN to issue invoices, register for GST, and interact with the ATO or ASIC.

• ATO (Australian Taxation Office)

  What is it?
  Australia’s national tax authority.
  Who does it apply to?
  All individuals, businesses, and not-for-profits.
  Why does it matter?
  They administer tax laws, collect income tax, GST, super, and enforce compliance.

• Award Wage Increase

  What is it?
  The annual adjustment to minimum pay rates under Modern Awards.
  Who does it apply to?
  Employers with staff covered by an Award.
  Why does it matter?
  Rates usually increase on 1 July — employers must adjust payroll accordingly to remain compliant.

• BAS (Business Activity Statement)

  What is it?
  A form to report and pay GST, PAYG, and industry-relevant taxes to the ATO.
  Who does it apply to?
  Registered businesses with GST, PAYG withholding, or instalments.
  Why does it matter?
  It’s how you stay compliant with your tax obligations — incorrect or late BAS lodgements can lead to penalties.

• Bookkeeping

  What is it?
  The recording and organising of your business’s financial transactions.
  Who does it apply to?
  All businesses — especially those registered for GST or employing staff.
  Why does it matter?
  Accurate bookkeeping is essential for tax, cash flow, decision-making, and compliance.

• Cash Flow Forecast

  What is it?
  A forward-looking estimate of income and expenses over time.
  Who does it apply to?
  Any business managing payments, income, and outgoings.
  Why does it matter?
  Helps you plan ahead, avoid cash shortages, and make confident decisions.

• Chart of Accounts

  What is it?
  A structured list of categories used to classify your transactions.
  Who does it apply to?
  All businesses using accounting software like Xero or MYOB.
  Why does it matter?
  It keeps your financial data consistent, trackable, and report-ready.

• Depreciation

  What is it?
  A way to spread the cost of an asset over its useful life.
  Who does it apply to?
  Businesses that purchase capital assets (e.g. equipment, vehicles).
  Why does it matter?
  It reduces your taxable income over time — but claiming it correctly is key.

• GST (Goods and Services Tax)

  What is it?
  A 10% tax added to most goods and services sold in Australia.
  Who does it apply to?
  Businesses with a turnover of $75,000 or more per year must register for GST.
  Important exception: If you're a taxi or ride-sourcing driver (e.g. Uber), you must register for GST regardless of turnover.
  Why does it matter?
  You must collect GST on sales and report it through your BAS.

• IAS (Instalment Activity Statement)

  What is it?
  A form for reporting PAYG withholding or instalments when not required to lodge a full BAS.
  Who does it apply to?
  Businesses not registered for GST but required to withhold tax from wages.
  Why does it matter?
  It keeps your PAYG withholding and income tax instalments up to date.

• Instant Asset Write-Off

  What is it?
  A tax concession allowing eligible businesses to immediately deduct asset costs.
  Who does it apply to?
  Small businesses purchasing capital assets (rules change frequently).
  Why does it matter?
  It can reduce your taxable income in the year of purchase — but timing and thresholds matter.

• PAYG (Pay As You Go) Withholding

  What is it?
  Tax withheld from employees’ wages and paid to the ATO.
  Who does it apply to?
  All employers with staff (including directors).
  Why does it matter?
  It's a legal obligation — incorrect withholding can lead to penalties.

• Payroll Tax

  What is it?
  A state-based tax on wages paid by larger businesses.
  Who does it apply to?
  Employers whose wage bill exceeds their state’s threshold (varies by state).
  Why does it matter?
  If you're registered, you must lodge monthly and complete an annual reconciliation.

• Reconciliation

  What is it?
  Matching transactions in your bookkeeping system to bank records or source data.
  Who does it apply to?
  All businesses using accounting software or preparing BAS.
  Why does it matter?
  Ensures your records are accurate and complete — essential for tax and decision-making.

• Single Touch Payroll (STP)

  What is it?
  A way to report payroll data to the ATO with every pay run.
  Who does it apply to?
  All employers.
  Why does it matter?
  It ensures employee earnings, tax and super are reported in real-time.

• Superannuation (Super)

  What is it?
  A compulsory retirement fund contribution made by employers for their staff.
  Who does it apply to?
  Any business that employs staff or pays contractors primarily for labour.
  Why does it matter?
  Super must be paid quarterly and on time — failure can result in penalties.

• TPAR (Taxable Payments Annual Report)

  What is it?
  A report submitted to the ATO detailing contractor payments in certain industries.
  Who does it apply to?
  Businesses in construction, cleaning, couriers, IT, security, and similar services.
  Why does it matter?
  It's mandatory if applicable — late or missing reports may trigger audits or penalties.

• Threshold

  What is it?
  The minimum level of income, turnover, or wages before a tax or obligation applies.
  Who does it apply to?
  Varies depending on the rule — e.g. GST threshold ($75,000 turnover), payroll tax, etc.
  Why does it matter?
  Crossing a threshold can trigger new reporting or payment obligations.