Starting a Business in Australia: The Setup Order We Recommend

Updated May 2026. Rewritten as a practitioner sequencing guide with current ATO, ASIC and Fair Work references, plus the tech stack new businesses actually need from day one.

Starting a business in Australia is mostly admin. The hard part is not the structure or the registrations. The hard part is doing them in the right order so you do not pay for the same mistake twice. We have set up enough small companies and helped enough clients build their internal stack from scratch to have strong opinions about that order.

We are an AI and automation consultancy in Brisbane. We do not give legal or tax advice, and the official sources at business.gov.au, ASIC and the ATO remain the ground truth. What we can offer is the sequence we would follow if we were starting from scratch tomorrow, what we would defer, and the technology decisions most guides leave out.

This guide covers eight steps in the order we run them: structure, registrations, banking, insurance, web presence, finance stack, compliance calendar, and the first hire. We have included the parts where new founders most often spend money they did not need to.

Step 1: Pick a Structure Without Overthinking It

You have four real options in Australia: sole trader, partnership, company (Pty Ltd), and trust. Most new businesses agonise over this choice. They should not. For a one-person service business with under $200,000 of revenue in year one, sole trader is fine. You can change later. Changing is a few hours of accounting work, not a structural disaster.

The honest decision tree we use:

• Sole trader: cheapest, simplest, but you are personally liable for everything. Suits freelancers, consultants, contractors, and anyone testing an idea. ASIC and the ATO are happy with it. You use your personal Tax File Number, register a business name if you want to trade under anything other than your legal name, and you are done.
• Pty Ltd company: worth the extra cost (around $600 to register through ASIC plus annual review fees) once you have employees, take on real client liability, or expect to sell equity. The limited liability matters when something goes wrong. We moved our own consultancy to a company structure the moment we started signing client contracts with indemnity clauses.
• Partnership: rarely the right choice. If you are going in with someone, the conversations a partnership forces are better had inside a company with a shareholders agreement. Partnerships are jointly liable and that liability has wrecked friendships.
• Trust: usually only worth it for asset protection, family income splitting, or a holding structure for property. Talk to an accountant before going down this road. The compliance overhead is real.

If you are unsure, start as a sole trader and book a one-hour session with a small business accountant before you hit $150,000 in revenue. That conversation will be cheaper than restructuring after the wrong choice. The business.gov.au structure comparison covers the legal differences in detail.

Step 2: The Registration Bundle

Australia is unusual in that most registrations are bundled through the Business Registration Service. You can apply for an ABN, business name, GST registration and PAYG withholding in one session. It takes about 45 minutes if your details are tidy.

The order we follow:

1. ABN application. Free. You will need your TFN and the structure decision from Step 1. Almost everyone needs an ABN if they are running a business as defined by the ATO. The ABN appears on every invoice you issue.
2. Business name registration with ASIC if you are trading under anything other than your legal name. $42 for one year or $98 for three. Sole traders using their own name can skip this.
3. Company registration with ASIC if you are forming a Pty Ltd. Roughly $600 through the government portal, or $700 to $900 through a service like Sleek or Cleardocs which throws in the constitution and some setup help.
4. GST registration. Mandatory if you expect $75,000 or more in annual turnover. Optional below that. We register voluntarily when our clients are GST-registered businesses (they reclaim the GST anyway, and we get to reclaim ours on expenses). Skip voluntary registration if your customers are individuals.
5. PAYG withholding. Add this when you hire your first employee, not before.

One detail worth flagging: the ABR application asks for your industry code (ANZSIC). Most founders pick the first plausible option. The wrong code occasionally creates downstream friction with payment processors and bank verification, so spend five minutes on the ABS ANZSIC list picking the most accurate one.

Step 3: Open a Business Bank Account (And the Secondary Account)

Companies, partnerships and trusts must have a separate business bank account. Sole traders are not strictly required to, but we have never met one who regretted opening one. Mixing personal and business transactions makes bookkeeping miserable and BAS preparation expensive.

The advice we wish we had been given on day one: open two business accounts, not one. One for operations, one for tax. Move 25 to 30 percent of every invoice payment to the tax account the same day it lands. That money is not yours. It belongs to the ATO. Treating it as such from the start prevents the year-three crisis where the BAS bill arrives and the cash is gone.

For our own business and for the early-stage clients we have helped, we have used a mix of the big four banks and the newer providers like Airwallex for international payments. Big four (NAB, CBA, ANZ, Westpac) are slower and more expensive but integrate with every accounting platform without drama. Online-first providers are cheaper, but expect a few teething integration issues.

Step 4: Business Insurance, What Is Actually Required

Workers compensation is the only universally mandatory cover, and only once you have employees. It is administered by the state regulator (WorkCover Queensland, SafeWork NSW, WorkSafe Victoria, etc.). Get it before the first payday, not the first day, but do not let it slide past payday one.

Beyond that, what you need depends entirely on what you do:

• Public liability. Anyone who steps onto a client site, or has clients step into theirs, needs this. Roughly $40 to $80 per month for small service businesses. Many commercial leases require it.
• Professional indemnity. Mandatory in some professions (lawyers, doctors, accountants, financial planners). Strongly recommended for any consultancy where bad advice could create client loss. We carry it because client contracts increasingly require it.
• Cyber insurance. Worth considering once you hold customer data. The cost has come down considerably since 2023 (around $1,500 to $3,500 per year for a small business). The premium is cheaper than one breach notification under the Notifiable Data Breaches scheme.
• Product liability. Only if you make, sell, or distribute physical products.
• Income protection (personal, not business). Sole traders cannot claim workers comp on themselves. Income protection fills that gap.

Use a broker, not a direct insurer, the first time around. They will spot the cover types you genuinely need and the ones you do not. Their commission is paid by the insurer, so the conversation is free.

Step 5: Domain, Website and Online Presence

Buy the .com.au and the .com.au’s matching .au (the shorter version) before anyone else does. The .au domain became available in 2022 and squatters have been busy. Both cost under $30 per year through registrars like VentraIP, Crazy Domains, or Hover. To register a .com.au you must hold an ABN, so do this after Step 2.

For the website itself, our position is unpopular but practical: most new businesses do not need a custom website for the first six months. They need a credible single-page presence that says who they are, what they do, and how to contact them. Framer, Squarespace, or a Webflow template will deliver this in a weekend for under $30 per month. We rebuild for a properly designed WordPress site once revenue justifies a $4,000 to $15,000 design and build.

Set up Google Workspace ($10 to $24 AUD per user per month) for email at your custom domain. Personal Gmail accounts on a business domain look amateur to anyone over thirty. Set up a Google Business Profile if you have any local component to your offer. It is free and remains the single highest-leverage local SEO investment for a new business.

For deeper SEO work, the patterns we describe in our related-posts engineering guide apply once you have published more than twenty posts. Year-one SEO is mostly about having an indexable site and a Google Business Profile that does not lie.

Step 6: The Finance Stack Most New Businesses Overcomplicate

You need three things from day one: a way to send invoices, a way to track expenses, and a way to file your BAS. You do not need a six-tool stack in month one. We have unwound enough overcomplicated setups to be certain about this.

Our default stack for a sub-$500,000 business:

• Xero ($35 to $90 AUD per month). The Australian default. Connects to every major bank, every BAS service, every payment processor. We have looked at MYOB and QuickBooks for clients and Xero wins in Australia. The exception is enterprises moving to NetSuite, which is a different conversation.
• Stripe or Square for online payments (1.75% plus 30 cents per transaction for cards in Australia). Both reconcile cleanly into Xero. Avoid PayPal as a primary processor in 2026. Fees are higher and the chargeback experience is rough.
• Dext or Hubdoc ($20 to $40 per month) for receipt capture. Take a photo, it reads the receipt, attaches it to the right Xero transaction. Saves about three hours per month and removes shoeboxes of paper.
• A bookkeeper once you cross 30 to 50 transactions per month, or as soon as you have employees. Charging out at $1,200 to $2,500 per quarter, they will save you the cost in BAS errors and end-of-year scramble.

Set up the chart of accounts deliberately at the start. Default Xero charts work for half of businesses. Spend an hour with a bookkeeper customising it for your industry before you have logged six months of transactions, because re-coding history is painful. Our clients who automate parts of their finance stack get the most leverage from the disciplines we describe in our business process automation ROI guide.

Step 7: Marketing and Customer Acquisition

The advice we give every new founder: ignore marketing for the first three months. Spend that time getting to five paying customers through your existing network. If you cannot get five through warm channels, paid acquisition will not save you. Marketing scales an offer that already works. It does not create one.

Once you have a working offer, the highest-leverage channels for a new Australian business are usually some combination of these:

• Google Business Profile and reviews. Costs nothing. Drives walk-ins and local search clicks. Ask every happy customer for a review the week they finished working with you. Twenty real five-star reviews beats any other local marketing you can buy.
• One content channel done consistently. Pick one: a blog, a LinkedIn presence, a YouTube channel, a newsletter. Post weekly for a year. Most founders pick three channels and burn out doing none of them well.
• Targeted paid ads once you can attribute. Google Ads or Meta for B2C, LinkedIn for high-ticket B2B. Start with $20 to $50 per day. Measure cost per qualified lead, not impressions. If you cannot attribute, you cannot optimise.
• Partnerships and referrals. Cheaper than ads, slower to scale, but the lifetime value is usually higher. Spend the lunches.

Email marketing through Mailchimp, ConvertKit, or Klaviyo earns its place once you have 500 list members or a recurring offer. Below that scale, you are paying for software you cannot fully use.

Step 8: The Australian Compliance Calendar Most Guides Skip

Most “how to start a business in Australia” guides stop at registration. The harder part is the recurring rhythm of compliance. Get this wrong and the penalties pile up quickly.

Put these dates in a shared calendar your accountant has access to:

• BAS quarterly: due 28 days after each quarter end (28 October, 28 February, 28 April, 28 July). If you lodge through a registered tax agent, you get a one-month extension.
• Super guarantee: paid quarterly, 28 days after each quarter end. The rate in 2026 is 12% of ordinary time earnings. Use a SuperStream-compliant clearing house. Xero has one built in.
• Single Touch Payroll: reported every pay cycle. Built into every modern payroll tool. Set up correctly once, forgotten thereafter.
• Annual tax return: 31 October if self-lodging, later through an agent.
• ASIC annual statement (companies only): on the anniversary of registration. Pay the fee, confirm the details, sign the solvency resolution. Late fees compound monthly.
• Business name renewal: 1 or 3 years from registration.
• Workers comp renewal: annually with the state regulator.
• Industry licences: variable. Construction, food, finance, transport, and many others have their own cycles.

If you are operating as a company and you hold customer data, the Australian Privacy Principles apply if you exceed $3 million in annual turnover or you handle health or sensitive information. Even under $3 million, the Notifiable Data Breaches scheme has implications, and customers increasingly expect a privacy policy regardless of statutory turnover thresholds.

If You Want to Talk This Through

We are an AI and automation consultancy in Brisbane that helps businesses set up the technology, automation, and data foundations that pay off in years two and three. If you are at the start of this journey and want to talk about which technology decisions matter most for your industry, you can book a call with us or get in touch through our contact page.

When Starting a Business in Australia Needs Professional Advice

Three situations where you should pay for advice rather than rely on any setup guide. First, if you are bringing in a co-founder or external investor, get a shareholders agreement drafted by a lawyer before you sign anything. The standard ASIC company constitution is silent on the questions that matter most. Second, if you are starting a business in a regulated industry (finance, health, legal, construction, food), the licensing layer is industry-specific and the consequences of getting it wrong are severe. Third, if you are an international founder migrating to Australia, your visa status changes which business structures are open to you.

The free advisory services through your state’s small business helpline are genuinely useful in these cases. They are funded to give you an hour of orientation. Use them.

Starting a Business in Australia: What Changes With Your First Hire

The moment you hire someone (employee, not contractor), several things change. You need PAYG withholding registration, Single Touch Payroll, workers compensation, and a documented employment contract. The Fair Work Ombudsman publishes a small business handbook that covers minimum entitlements, the relevant modern award, the Fair Work Information Statement, and the National Employment Standards. Read it once before you advertise the role.

One distinction founders get wrong: contractor versus employee. The ATO and Fair Work do not care what your contract calls the relationship. They care about the substance: who controls the work, who bears the risk, whether the person is in business in their own right. Misclassifying a worker as a contractor when they are functionally an employee is one of the costlier mistakes a small business can make. If unsure, ask. The ATO has an online tool that takes about ten minutes.

Frequently Asked Questions

How much does it cost to start a business in Australia?

Bare minimum for a sole trader: under $100, just the business name registration if you need it. ABN is free. For a Pty Ltd company including ASIC fee, name registration, and basic constitution: around $600 to $900. Add $300 to $800 per month of running costs once you include accounting software, banking, insurance, and a domain. Most service businesses can be operational for under $2,000 in the first three months.

Do I need an ABN as a sole trader?

If you are running a business as defined by the ATO (regular activity, profit motive, business-like operations), yes. Without an ABN, your clients must withhold 47% of payments to you under the no-ABN withholding rule. That is a strong incentive to register. The ABN is free and takes under 30 minutes online through the Australian Business Register.

When do I need to register for GST?

You must register once your annual turnover hits $75,000 (or you expect it to within twelve months). Below that, registration is optional. Register voluntarily if your customers are GST-registered businesses (they reclaim the GST). Skip voluntary registration if your customers are individuals, because adding 10% to your price tag for no benefit to them is a hard sell.

Sole trader or company, which is better when starting a business in Australia?

For testing an idea or solo consulting under $200,000, sole trader. For anything with employees, real client liability, equity holders, or asset accumulation, a Pty Ltd company. The change from sole trader to company costs a few thousand dollars in accounting work but is a routine process. Do not let analysis paralysis on this decision delay launching.

How long does it take to register a business in Australia?

A sole trader with ABN and business name: under an hour, fully online, and the ABN is usually issued instantly if your details match the ATO records. A Pty Ltd company through ASIC’s portal: same-day registration is standard. Through a service like Sleek, allow 24 to 48 hours for the bundled paperwork. The slow part is opening the business bank account, which often takes 5 to 10 business days due to verification.

What business insurance do I actually need?

Workers compensation is mandatory once you have employees. Public liability is mandatory for many commercial leases and any client-facing service. Professional indemnity is increasingly required by client contracts in consulting and professional services. Product liability is mandatory if you sell physical goods. Cyber insurance is optional but cheap relative to the cost of a notifiable data breach. Use a broker the first time.

Can I run a business from home in Australia?

Yes, with conditions. Most residential zones allow home-based businesses if the activity has minimal external impact (no customer visits, no commercial vehicle storage, no signage). Check your local council planning rules. You can claim home office expenses through the ATO using either the fixed-rate method (67 cents per hour from 1 July 2025) or actual expenses. The tax savings can be material. So can the trap of claiming a “dedicated office area” if you later sell the home, because the main residence CGT exemption may be partly lost. Talk to an accountant.

What government grants are available for new businesses?

The business.gov.au Grants and Programs Finder lists current federal and state programs. Most new business grants are sector-specific (export, R&D, regional, women-led, Indigenous-led, agritech, defence, advanced manufacturing). General “new business” grants are rare. The most common one founders qualify for is the R&D Tax Incentive once they are doing genuine technical development. State-level innovation vouchers and ignite-type programs come and go. Check quarterly, do not bet your business model on a grant.