What is the company tax rate in Australia?
Understand the two main company tax rates and when each applies.
Summary
For 2026–27, a company that qualifies as a base rate entity generally uses the 25% company tax rate. Other companies generally use the 30% rate.
What this means
A company is generally a base rate entity for an income year if its aggregated turnover is less than $50 million and 80% or less of its assessable income is base rate entity passive income. Passive income can include certain interest, rent, royalties, dividends and net capital gains.
Base rate entity status is tested each income year, so a company can qualify in one year and not another. Companies that do not satisfy the base rate entity rules generally apply the 30% company tax rate.
Typical actions
- Work out your aggregated turnover, including affiliates and connected entities.
- Identify what proportion of assessable income is base rate entity passive income.
- Apply the base rate entity test each income year separately.
- Check the current company tax rates on the ATO website.
- Speak with a registered tax agent for complex group or income mixes.
Official ATO sources
Last checked: 25 August 2026
Changes to company tax rates
Explains base rate entities and how the lower company tax rate applies.
Lower company tax rate
ATO focus areas around correctly applying the lower company tax rate.
Related questions
- What is aggregated turnover?
- What is the small business tax offset?
- How do small businesses pay tax?
- What tax obligations does a small business have?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
Need help understanding this in plain English?
Try the Tax Clarity App for a plain-English answer.