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How to Manage Small Business Cashflow for Tax, GST & Super

Small Business Cashflow

In our previous blog, we looked at 3 critical reasons why small business owners must prioritise the payment of tax, GST and superannuation in their business. One of the most important being that as a business owner or company director you could become personally liable for unpaid super & ATO plans to report unpaid tax debt to credit agencies.

So how do we ensure we build the payment of tax, GST and super into our cashflow processes in small business.

One of the easiest ways is to establish a separate bank account just for these payments. Then determining what % of every $1 cash sale you need to be funneling off to that bank account on a weekly basis.

Below is an example of how we calculate & build tax payments into weekly small business cashflow planning.

Meet Jacki.

Jacki runs small business selling organisation & wardrobe solutions. Jacki previously had difficulty finding cash to pay the quarterly BAS & super for staff. We helped Jacki implement an easier way to budget for BAS, tax & super payments. Here’s how we did it –

Jacki knows from her last quarterly BAS her GST bill was $7,666 & her gross sales for the quarter was $112,684. Her two-previous quarterly BAS show a similar result also. So on average we know that for every $1 of sales Jacki makes she needs to put aside 6.8c to cover her GST liability.

To work out how much gets put aside each week for income tax, we take a look at the company tax return (or average tax payable by beneficiaries if operating through a trust) from the last year lodged. So Jacki’s company had –

  • Sales of $409,760 after GST
  • Taxable income of $61,464; and
  • Tax payable of $17,517.24.

So we determine on average, Jacki’s company will have 3.9c for every $1 of gross sales.

Lastly, Jacki pays her staff weekly on a Thursday, so from the pay-run we can pick up the amount of the PAYG withheld and superannuation liability easily.

Every Monday when Jacki pays wages for the previous week, she transfers an amount to her “Tax Savings” account for GST, income tax, PAYGW and super. Lets have a look at how Jacki calculates it easily each week –

  • PAYG withheld from wages this week was $378 (from the payroll report);
  • Super liability was $225 (from the payroll report);
  • Gross sales according to the profit & loss report was $8,668 including GST.

Jacki transfers the $378 PAYG withholding + $225 super + $928 to cover GST & Income tax to the “Tax Savings” account. A total of $1,531 (this is roughly 18% of Jacki’s GST inclusive sales is needed to cover GST, income tax, PAYGW and Super).

When the quarterly BAS or super due date falls due, Jacki goes to her “Tax Savings” account & withdraws the amount to pay with no worries of whether its there or not.

Jacki also starts to think in a different way. Instead of viewing all sales coming in and thinking that $10,000 can go pay X or Y, she now thinks in terms of that $8,200 coming in can go pay X or Y, as she has already mentally allocated the $1,800 into the “Tax Savings” account.

Using a “Tax Savings” account should be a part of an overall cashflow planning process, where capital purchases are planned for, wages to working owners, finance repayments and trading terms for creditors and debtors are factored in.

A certain amount of discipline is also required when using a “tax savings” account. It can be tempting for some business owners when they see $10,000 or $15,000 accumulating in another account, to dip in and put towards that purchase of a new car or other items that weren’t scheduled quite yet.

Taking a proactive approach to providing for your tax & super liabilities is less stressful than having to find current & past quarters liabilities once you fall behind. It also means no dealing with the ATO collection houses, payment arrangements, director penalties or a super guarantee audit triggered by an unhappy ex-employee reporting to the ATO about unpaid super.

If you would like assistance calculating your % to put aside or building a cashflow plan for your business, contact a team member at Goad Accountants on (07) 3849 3816 or


Disclaimer: The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website are of a general nature only and are based on Goad Accountant’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Karen Goad
Karen Goad
Owner & Founder of Goad Accountants & BusinessSpark. Karen is a Chartered Accountant and Certified Tax Adviser with over 23 years of experience advising property investors, property developers, veterinarians, small and medium business and helping them get the most out of their business through accurate record keeping, tax advice, KPI monitoring and profit improvement strategies. Goad Accountants also specialises in self-managed super fund administration.

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