Eligibility for Small Business Concessions

Authors: Gianluca Pecora & Megan Adams, Progressive Legal

There are different tests for what constitutes a small business in Australia.  These tests depend on the context of each situation.   

For instance, if you’re talking about employment obligations under the Fair Work Act 2009 (Cth), then a business is a small business if it employs fewer than 15 people.  If you’re talking about Privacy Law, a small business is a business that has less than $3 million in annual turnover under the Privacy Act 1988 (Cth).  If you’re talking about taxes, then a business may be a small business if it has less than $2 million, $5 million, $10 million, and $50 million in annual turnover. 

In general, Australian business law tries to support the “little guy”, but whether your business is a small business can vary, and its important to know your rights and obligations. 

Being a small business also comes with many tax perks to even the playing field. 

Fair Work Obligations for Small Businesses 

With regard to obligations under the Fair Work Act 2009 (Cth), a business is a small business if it employs fewer than 15 people. 

To determine whether your small business employs less than 15 employees, include all employees at the time of small business status becoming relevant to a dismissal or other Fair Work matter.  Each employee counts as one person – do not pro-rate part-time workers’ hours.   

The number of employees will include: 

1. Any employees being dismissed; 
2. Regular casual employees; and 
3. Employees of associated entities, in Australia and overseas.  

NSW Small Business Commissioner, Yasmin King, says small businesses find it extremely difficult to understand their rights and obligations under the Fair Work Act 2009. Being the exception can help you avoid disputes and penalties, keep staff happy and boost staff performance.  

Ending Employment Rights

Small businesses enjoy special rules for ending employment including: 

• generally not having to make redundancy payments to outgoing employees; and 
• immunity from unfair dismissal claims by outgoing employees who you have employed for less than 12 months. Be aware that this immunity only applies to unfair dismissal claims and does not apply to unlawful termination, discrimination and other breaches of general employee protections. 

Obligations

Record-keeping 

Small businesses are obliged to keep employment records, including time and wage records for seven years.  

Pay Slips 

Small businesses are obliged to provide employees with a pay slip within 1 day of payment. 

National Employment Standards 

Small businesses must adhere to the National Employment Standards. 

Privacy Obligations for Small Businesses 

As of the date of this article, the Privacy Act does not cover most small businesses – a label defined by an annual turnover of $3 million or less. 

If your business fits this label, it will still need to adhere to the Privacy Act if any of the following descriptions apply. 

Small Business Trades in Personal Information without Consent or Authorisation

A small business trades in personal information if it: 

1. Provides a benefit, service or advantage in return for the collection of personal information; or 
2. Discloses personal information for a benefit, service or advantage. 

A benefit, service or advantage is any financial payment or other advantage or benefit. 

Your business will have traded personal information if it sells or trades personal information to another company, in particular a marketing company. 

A small business can trade personal information without complying with the Privacy Act if authorised by law or given express or implied consent by the individual to trade their personal information. 

Health Service Provider

A small business is a health service provider if it provides services in relation to physical, emotional, psychological, or mental health. Examples include private hospitals, day surgeries, medical practitioners, pharmacists and allied health professionals; complementary therapists; child care centres; private schools and private tertiary educational institutions. 

Related to a Larger Body Corporate

A small business is related to a larger body corporate subject to the Privacy Act if they are a holding company or subsidiary of another body corporate. To see if your small business satisfies other circumstances of being related to a larger body corporate per the Corporations Act 2001 – contact Progressive Legal’s team who have experience in corporate law. 

Commonwealth Contracted Service Provider

A small business is a Commonwealth Contracted Service Provider if it provides services to, or on behalf of, Australian Government agencies under a contract with the Commonwealth.  

Reporting Entity

Find out if your small business is a reporting entity under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). 

Other small businesses captured by the Privacy Act

1. Small businesses operating a residential tenancy database 
2. Credit reporting small businesses 
3. Employee associations 
4. Small businesses that are protected ballot agents 
5. Small businesses captured by Part 5-1A of the Telecommunications (Interception and Access) Act 1979 

If your small business falls within any of these categories, or you want to increase customer confidence, a privacy policy is a must. The lawyers at Progressive Legal are experienced in privacy law and can draft a privacy policy to your specific business.

Tax Small Businesses Concessions

With regard to taxation, small businesses can receive tax benefits for busineses with turnover under $2 million, $5 million, $10 million or $50 million.  We don’t give tax advice at Progressive Legal, but we can give you a referral to an accountant who does. 

Key Takeaways 

“Small Business” has different meanings in different contexts.  It is a broadly-applied label that creates perks and obligations for businesses, so you should always receive advice about whether your business is a small business in a given situation.  There are many areas where a business could be a small business, including in employment, privacy, and taxation.

What Legal Documents do Small Businesses need?

• Supplier Agreements  
• Distribution agreements 
• Casual employment contracts 
• Non-Disclosure Agreements

See the full list here 

Progressive Legal’s experienced team of small business lawyers know what a small business needs to succeed – we have been a small business ourselves and have helped over 3,000 small businesses find legal solutions to excel.