Tax & ATO
What is Aggregated turnover?
Aggregated turnover is your business's own annual turnover plus the annual turnover of every entity connected with you or acting as your affiliate, with dealings between those entities stripped out. It is the figure almost every small business tax concession is tested against, not your own revenue alone.
What goes into the figure
Aggregated turnover starts with your own annual turnover, the ordinary income you earned in the ordinary course of carrying on a business for the income year. It then adds the annual turnover of two other groups: entities connected with you, and your affiliates. Amounts earned from dealings between you and those entities are then subtracted, so revenue is not counted twice as it moves around a group.
An affiliate is an individual or company that acts in accordance with your directions or in concert with you in business. A partnership or a trust cannot be your affiliate. A connected entity is a different test, based on control rather than conduct, and it is the one that catches most people out: it can pull in a company you own a share of, or a trust, or another business owned by the same person, even where the two have nothing to do with each other commercially.
Where a business only operated for part of the year, the turnover is worked out as if it had run for the whole year. Turnover earned while an entity was not yet connected with you, or not yet your affiliate, is left out.
The thresholds it is tested against
There is no single small business threshold. Aggregated turnover is measured against a different figure depending on which concession you are after.
| Concession | Aggregated turnover must be under |
|---|---|
| Most small business income tax concessions, including simplified depreciation | $10 million |
| GST on a cash basis | $10 million |
| Small business income tax offset | $5 million |
| Small business CGT concessions | $2 million |
There are three ways to satisfy a threshold for an income year: your aggregated turnover for the previous year was under it, a reasonable estimate of the current year is under it, or the actual figure at the end of the year turns out to be under it. The ATO's position is that most businesses only need the previous-year test, which is the one you can answer with certainty before the year starts.
Why it bites
The trap is simple. An owner looks at $4 million of revenue, assumes the $10 million concessions are comfortably available, and never adds the other entities. If a spouse runs a separate company and the same person controls both, or if a family trust sits over the top of two businesses, the aggregated figure can be several times the one on the profit and loss statement.
It works the other way too. Being pushed over a threshold by a connected entity means losing simplified depreciation, losing the ability to account for GST on a cash basis, and potentially losing the small business CGT concessions on a sale, which is where the dollars get large. Those are consequences worth checking with a registered tax agent before a structure is set up rather than after.
If you are only trying to work out whether you need to register for GST, that is a different and simpler test: GST turnover of $75,000 in any rolling 12-month period, your own turnover, without aggregation. The GST calculator covers the arithmetic once you are registered.
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Aggregated turnover frequently asked questions
Is aggregated turnover the same as my business revenue?
Only if you have no connected entities and no affiliates. Otherwise it is your annual turnover plus theirs, less any dealings between you. A business with $4 million of its own revenue can easily have an aggregated turnover above $10 million once a second company or a family trust under the same control is counted.
Which turnover year do I test against?
Any of three: the previous income year's aggregated turnover, a reasonable estimate made at the start of the current year, or the actual figure once the current year ends. Satisfying any one of them is enough. The ATO notes most businesses only ever need the previous-year test, because it is the one that can be answered with certainty in advance.
Does revenue between my own companies get counted twice?
No. Amounts earned from dealings between you and an entity connected with you, or between you and an affiliate, are excluded from the aggregated figure. That stops the same dollar being counted once as a sale by one entity in the group and again as a sale by the next.
Last reviewed and updated: by Bishal Shrestha