Tax obligations for Not For Profits may cover goods and services tax (GST), income tax, PAYG and other employer obligations, land tax or stamp duty, however as a Not For Profit you may be able to access rebates and exemptions on some taxes. Your organisation might also want to offer income tax deductibility on the gifts and contributions you receive from donors.
On this page:
- Employer obligations
- Income tax
- Tax concessions, rebates and exemptions
- Tax deductible gifts
- Withholding in business transactions
- see the GST registration page on the Australian Tax Office (ATO) website for more information.
If your organisation is registered for GST, then you:
- include GST in the price of any taxable sales you make, and must pay the GST you collect to the ATO,
- can claim GST credits for any GST included in the price of business purchases, and
- must complete activity statements to report your organisations’ taxable sales and claim GST credits.
If your organisation is not registered for GST, then you do not include GST in the price of any sales you make and you cannot claim credits for the GST included in business purchases.
Information about all employer obligations and considerations can be found on the Obligations to workers page of the ATO website.
Some of the common obligations your organisation may need to consider are: pay as you go (PAYG) withholding, superannuation and frindge benefits tax.
If your organisation has employees, you will need to withhold amounts from their pay and send the withheld amounts to the ATO at regular intervals. This process is called PAYG withholding, and no organisations are exempt.
- see the PAYG withholding page on the ATO website for more information.
As an employer you must provide a minimum level of super contributions for your eligible employees. Most employees are covered by superannuation guarantee legislation, and no organisations are exempt.
- See the Superannuation for employers guide on the ATO website.
Fringe benefits tax
A fringe benefit is a payment to an employee that is in a different form to salary or wages, such as meals, entertainment or personal use of the company car. If your organisation provides fringe benefits to its employees your organisation may need to pay fringe benefits tax (FBT).
- see the Fringe benefits tax (FBT) page on the ATO website for more information.
Not For Profits that are not eligible for income tax exemption may need to lodge income tax returns and pay income tax, however they may be eligible for reduced tax rates and not all amounts of money or property your organisation receives will be assessable income.
- see the Mutuality and taxable income guide on the ATO website for help with calculating your taxable income, tax rates and if you need to lodge an income tax return.
- see the Company tax return for non-profit organisations guide on the ATO website for more information.
Not For Profits may be able to access concessions, rebates or exemptions on a range of taxes. These include income tax, FBT, GST, land tax and stamp duty.
The options available to your NFP will depend on the type of non-profit organisation according to the Australian Tax Office (ATO) definitions. Some concessions only apply to certain types of organisations.
- see the Tax Concessions page on the ATO website for a summary of tax concessions and the organisation types that can access them.
Income tax exemption
Registered charities must be endorsed by the ATO to access the income tax exemption (as well as other charity tax concessions). Registered charities that are endorsed by the ATO are known as tax concession charities (TCCs).
- see the Can you be endorsed as a TCC page on the ATO website for more information.
Many other Not For Profit organisations (that are not charities) can self-assess if they are eligible for the income tax exemption. If your NFP meets the criteria for one of the exempt categories then you do not need to pay income tax or lodge income tax returns – unless specifically asked to do so by the ATO. You do not need to seek confirmation of this exemption from the ATO.
- see the Types of income tax exempt entities page on the ATO website for more information.
There are a range of goods and services tax (GST) concessions that are available to non-profit organisations. Additional GST concessions may be available to registered charities and gift deductible entities.
- see GST concessions on the ATO website for more information.
Only public and non-profit hospitals, public ambulance services, public benevolent institutions (PBIs) and health promotion charities (HPCs) are eligible for an exemption from paying FBT – up to a maximum amount per employee per year.
Note: PBIs and HPCs must be endorsed by the ATO and registered with the Australian Charities and Not-for-profits Commission (ACNC) to access the FBT exemption.
- see the FBT exemption page on the ATO website for more information.
If your Not For Profit is not eligible for the FBT exemption, you may still be eligible for an FBT rebate. Many Not For Profit organisations can self-assess their entitlement, and the FBT Rebate page on the ATO website provides a list of organisations that qualify.
Note: Charities that are institutions, including religious institutions, must be endorsed by the ATO and registered with the ACNC to access the FBT rebate.
- see the FBT rebate page on the ATO website for more information.
Land Tax exemption
Land which is used by a charitable institution, exclusively for charitable purposes, is generally exempt from Land Tax, however commercial ventures or leases to third parties may be taxable.
- see the Charitable institutions and land tax page on the State Revenue Office (SRO) website for more information on taxable and exempt activities, and how to apply for exemption.
Duty (also known as stamp duty) is charged on a range of transactions, including transfers of land, certain leasing arrangements, declarations of trust and transfers of motor vehicles. Some exemptions are available for charitable organisations under the Duties Act 2000 (Vic).
- see the Charities and Friendly Societies page on the SRO website for information on how to apply for exemption.
Fuel tax credits
Fuel tax credits provide your organisation with a credit for the fuel tax (excise or customs duty) included in the price of fuel.
Not For Profit organisations operating emergency vehicles or vessels may be able to receive fuel tax credits even if they are not registered for GST.
- see the Fuel tax credits - non-profit emergency vehicles guide on the ATO website for eligibility criteria and how to register.
All other Not For Profits may be eligible for fuel tax credits, but must also be registered for GST.
- see the Fuel tax credits for business guide on the ATO website for more information.
- see the Deductible gift recipient (DGR) endorsement page on the ATO website for more information.
- see the Withholding in business transactions page on the ATO website for more information.