Starting a business in Australia can cost very little or tens of thousands of dollars. A sole trader can start for free (an ABN costs nothing), or for $47 with a one-year business name registration, while registering a Pty Ltd company costs $636 in ASIC fees from 1 July 2026. Beyond registration, the initial expenses can include legal fees, licences, insurance, and potentially office space or equipment, depending on your industry, structure and specific needs.
What You'll Learn
- Essential Startup Costs (Mandatory)
- Industry-Specific Startup Costs
- Technology & Digital Infrastructure ($1,000-$8,000)
- Ongoing Running Costs (Monthly/Annual)
- Tax Obligations & Professional Services
However, understanding the full financial picture requires looking beyond just startup costs to include ongoing operational expenses that will determine your business's long-term viability.
A note on the figures: the government fees below were checked against ASIC and the Australian Business Register in October 2026 (ASIC fees are indexed each 1 July). The other dollar ranges in this guide (rent, insurance, software, fit-out and so on) are rough indicative estimates only. Actual costs vary widely with your industry, location and suppliers, so get quotes before you set a budget.
Essential Startup Costs (Mandatory)
Government Registration & Legal Structure
- ABN registration: Free through the Australian Business Register (abr.gov.au)
- Business name registration (ASIC): $47 for 1 year, $108 for 3 years (from 1 July 2026); not needed if you trade under your own name
- ASIC company registration: $636 (Pty Ltd, from 1 July 2026)
- ASIC annual review fee: $342 a year for a proprietary company (from 1 July 2026)
- Director ID: Free (every company director needs one before being appointed)
- TFN application (company, partnership or trust): Free
- GST registration: Free (mandatory once your GST turnover reaches $75,000, or $150,000 for non-profits)
- Legal consultation for structure advice: roughly $300-$800 (rough estimate)
Licences & Permits (rough estimates)
- Licence requirements and fees vary dramatically by industry, state and local council
- Food business registration or licence: roughly $150-$400, set by your council or state food authority
- Building and construction licences: roughly $500-$2,000, depending on your state and licence class
- Professional licences and registrations: roughly $200-$1,500
- Use the government's Australian Business Licence and Information Service (ABLIS) to find the licences and permits that apply to your business
Industry-Specific Startup Costs
Retail Business ($5,000-$50,000, rough estimate)
- Initial inventory: $2,000-$20,000
- Point-of-sale system: $500-$3,000
- Shop fitting and displays: $2,000-$15,000
- Security systems: $500-$2,000
Professional Services ($2,000-$10,000, rough estimate)
- Professional indemnity insurance: $800-$3,000 annually
- Office setup and furniture: $1,000-$5,000
- Professional software licenses: $500-$2,000
- Marketing materials and branding: $500-$2,000
Manufacturing/Production ($10,000-$100,000+, rough estimate)
- Equipment and machinery: $5,000-$80,000
- Initial raw materials: $2,000-$10,000
- Safety equipment and compliance: $1,000-$5,000
- Quality control systems: $2,000-$8,000
Technology & Digital Infrastructure ($1,000-$8,000)
Essential Digital Setup (rough estimates)
- Domain name registration: $15-$50 annually
- Professional website development: $1,500-$5,000
- E-commerce platform setup: $500-$2,000
- Email hosting and business communications: $100-$300 annually
- Cloud storage and backup solutions: $200-$600 annually
Business Software & Tools (rough estimates)
- Accounting software (Xero, MYOB): $300-$800 annually
- Customer relationship management (CRM): $500-$2,000 annually
- Project management tools: $200-$1,000 annually
- Industry-specific software: $500-$5,000
Ongoing Running Costs (Monthly/Annual)
Fixed Operating Expenses (rough estimates)
- Commercial rent: $2,000-$10,000+ monthly (depending on location)
- Utilities (electricity, gas, water): $200-$800 monthly
- Internet and telecommunications: $100-$300 monthly
- Insurance premiums: $200-$1,500 monthly
- Equipment leasing: $300-$2,000 monthly
Variable Operating Costs (rough estimates)
- Staff wages plus superannuation guarantee (12% of ordinary time earnings): $4,000-$20,000+ monthly per employee
- Raw materials and inventory restocking: varies widely by industry
- Marketing and advertising: often budgeted as a percentage of revenue
- Professional services (accounting, legal): $500-$2,000 monthly
- Equipment maintenance and repairs: $200-$1,000 monthly
Tax Obligations & Professional Services
Ongoing Tax Compliance Costs
- Business Activity Statements (BAS): professional preparation from about $330 per quarter, depending on the size and complexity of your books
- Annual tax returns: professional preparation from about $1,100, depending on your business structure and the state of your records
- Payroll tax (if applicable): a state tax with rates and tax-free thresholds that vary by state; it only applies once your total wages exceed your state's threshold
- Workers' compensation insurance: generally compulsory once you employ staff; premiums depend on your state, industry and wages bill (roughly $500-$5,000 a year for a small employer)
- Tax audit insurance: covers professional fees if the ATO reviews or audits your affairs
Professional Advisory Costs (rough estimates)
- Ongoing accounting services: $350+ monthly
- Legal advice and contract reviews: $300-$500 per consultation
- Business coaching and development: $200-$800 monthly
- Industry association memberships: $200-$1,000 annually
Location-Specific Considerations
Sydney CBD Premium Costs (rough estimates)
- Office rent: $800-$1,200 per sqm annually
- Parking: $300-$600 monthly per space
- Higher insurance premiums due to location
Regional Areas Cost Advantages (rough estimates)
- Office rent: $200-$400 per sqm annually
- Lower utility costs
- Reduced insurance premiums
- Award minimum wages apply nationally, but market rates above the award can be lower
Hidden Costs Often Overlooked
Cash Flow Management
- Working capital requirements: 3-6 months of operating expenses
- Debt servicing and interest payments
- Equipment depreciation and replacement funds
- An emergency buffer for unexpected costs
Growth and Scaling Costs
- Additional staff recruitment and training: $5,000-$15,000 per hire
- Expanded premises and fit-out costs
- Increased insurance coverage
- Technology upgrades and scalability investments
Cost-Saving Strategies
Smart Financial Planning
- Choose an appropriate business structure for tax efficiency
- Leverage government grants and incentives
- Consider shared office spaces initially
- Implement cloud-based solutions for scalability
- Regular review of all subscriptions and services
Professional Guidance Investment
- Quality accounting advice prevents costly mistakes
- Proper tax planning can save thousands annually
- Legal structure optimisation reduces long-term costs
- Regular financial health checks identify cost-cutting opportunities
If you'd like help getting set up, our small business accountants in Sydney can advise whether a sole trader, partnership, company or trust structure suits you, register you for GST and lodge your BAS. We're registered tax agents (TPB 78641007) with an office in Chippendale, and we work with clients by phone and video Australia-wide.
Conclusion
While starting a business in Australia can range from very little for a simple sole trader setup (a free ABN, plus $47 if you register a business name) to $50,000+ for complex operations, the key to success lies in thorough financial planning that accounts for both startup and ongoing operational costs.
Remember that the cheapest option isn't always the most cost-effective long-term. Investing in proper professional advice, quality systems, and appropriate insurance from the start can save significant money and reduce stress in the long term.
Consider consulting with qualified professionals who can provide personalised advice based on your specific industry and business goals. The initial investment in proper planning and setup often pays for itself many times over through avoided mistakes and optimised operations.
How do I get help with this from the ATO?
The ATO provides guidance through ato.gov.au, the Small Business Support Line (13 28 66), and Online Services for individuals and businesses. For complex situations, a registered tax agent provides advice tailored to your specific circumstances and professional indemnity protection. You can verify agent registration at the TPB register at tpb.gov.au.
What records do I need to keep for tax purposes in Australia?
Most tax records must be kept for five years from the date of lodgement or the date the transaction occurred, whichever is later. Records must be in English or convertible to English and must be sufficient to explain the income and deductions in your return. The ATO can request records at any time during the retention period.
When do I need a registered tax agent in Australia?
Consider a registered tax agent when your affairs involve multiple income sources, business activity, investment properties, capital gains, or overseas income. Agents extend your lodgement deadline, provide safe harbour protection, and take professional responsibility for the advice given. Verify registration at tpb.gov.au.
How does the ATO calculate penalties for compliance failures?
The failure to lodge penalty is based on penalty units ($364 per unit from 1 July 2026), accruing per 28-day period for late returns and BAS lodgements. Incorrect information penalties range from 25% to 75% of the tax shortfall depending on whether the behaviour was careless, reckless, or intentional. Proactive disclosure before an audit begins typically results in significantly reduced penalties.
What is the difference between tax avoidance and tax minimisation?
Tax minimisation is the legal arrangement of your affairs to reduce tax — claiming all eligible deductions, using appropriate structures, and timing income and expenses. Tax avoidance involves arrangements that technically comply with the law but achieve outcomes parliament did not intend. The ATO can apply Part IVA anti-avoidance rules to cancel benefits from avoidance arrangements.
