Why Outsourcing Isn’t Just About Saving Time
Running a small business in Australia means juggling growth, compliance, rising costs, and (let’s be honest) an overwhelming admin load. With the ATO introducing tighter compliance rules, red tape growing, and pressure on margins, it’s no wonder that more business owners are looking to outsource.
But here’s what many don’t realise:
Outsourcing isn’t just a smart operations move. It’s a smart tax move too. The outsourcing tax benefits available to small business owners can have a powerful impact on both your productivity and your bottom line.
Whether you’re hiring your first virtual assistant (VA) or expanding an offshore support team, the costs associated with VA services are generally tax-deductible. That means you can improve your output and reduce your taxable income while enjoying the full spectrum of outsourcing tax benefits.
Outsourcing Tax Benefits: What You Can Claim
Engaging a VA for admin, marketing, customer service or bookkeeping? These services are categorised by the ATO as operating expenses under general deductions (Division 8 of the Income Tax Assessment Act 1997).
You can typically claim:
- Virtual assistant service fees: As long as the VA is doing work directly connected to earning your business income.
- Associated software and tools: Think project management systems (Asana, Trello), communication tools (Zoom, Slack), or accounting software (Xero, MYOB).
- Training and onboarding tools: If you’re paying for a subscription to onboard and train your VA.
- Any GST paid on these services (provided you’re registered for GST and hold a valid tax invoice)
These tax-deductible roles aren’t limited to bookkeeping or admin. You can also claim outsourcing costs for:
- Social media managers who create and post your content
- Marketing assistants who set up email automations and update your website
- Executive assistants who schedule your meetings and manage your calendar
Customer service VAs who respond to emails or chat enquiries
As long as the VA’s role supports your business operations and revenue generation, their services are a valid business expense under the ATO’s guidelines.
These are recorded in your income tax return under business expense categories and can significantly reduce your taxable income. It’s also essential to retain records for at least five years in case of audit.
Home-Based Business? Your Tax Deductions Could Be Higher
If you operate your business from home and employ a VA who supports your business activities, you may be eligible to claim:
- A portion of your home internet and phone use
- Electricity usage proportionate to business hours worked
- Depreciation on office equipment such as laptops, printers, and phones
- Home office furniture like ergonomic chairs and desks
Be sure to calculate a reasonable business-use percentage and keep receipts and utility bills on file. The ATO offers both actual cost and fixed-rate methods for claiming home office deductions.
Why the $20,000 Instant Asset Write-Off Matters
In the 2024–25 financial year, businesses with turnover under $10 million can immediately deduct eligible assets costing less than $20,000. This is particularly useful for:
- Laptops, monitors and mobile devices for VA collaboration
- Audio/visual equipment if you’re working with a VA on podcasts or video editing
Office tech upgrades to support efficient communication and workflow
The asset must be first used, or installed ready for use, in the year you’re claiming the deduction. This initiative is a key example of how strategic outsourcing can trigger additional outsourcing tax benefits.
The Admin Trap: ATO Wants Your Books Spotless
The ATO has ramped up enforcement on small businesses, with stricter expectations around BAS submissions, PAYG withholding and Super Guarantee compliance. Falling behind can lead to penalties or loss of deductions.
By outsourcing your bookkeeping or financial admin to a trained VA, you can:
- Ensure accurate data entry
- Reconcile bank transactions daily or weekly
- Maintain a proper audit trail
All of which are crucial to protect your deductions and minimise your audit risk. These outsourcing tax benefits aren’t just financial – they offer peace of mind.
ATO Benchmarks: Are You Falling Behind?
The ATO tracks industry benchmarks to detect anomalies in your business performance. Common flags include:
- Unusual wage-to-turnover ratios
- High operating costs without equivalent income
- Low gross profit margins
Hiring a local admin on payroll may inflate your ratios. A VA, especially one paid per hour or task, keeps costs flexible and efficient. You remain compliant while also maximising outsourcing tax benefits.
Starting or Scaling? The ATO Has Its Eyes on You
If you’re scaling your operations or formalising a side hustle, the ATO expects accurate records, proper business structures, and timely registrations for ABN, GST and PAYG. A virtual assistant can:
- Help prepare onboarding packs
- Draft contracts and NDAs
- Organise payroll data (note: they cannot process BAS unless registered with the Tax Practitioners Board)
Remember: your VA cannot offer tax advice unless a registered BAS or tax agent. But they can support the admin-heavy work that surrounds compliance, giving you time to focus on strategy.
You Can’t Grow If You’re Buried in Red Tape
Business owners across Australia are spending more time than ever on compliance. But outsourcing is one of the most powerful ways to take back control.
It keeps your books clean, your workload focused, and your tax bill lower. Whether you need help with admin, digital marketing, operations, customer support, or executive assistance, virtual assistants offer real value – not just in time saved, but also in tax optimisation.
With Filipino VAs experienced in a wide range of business support roles and working within your time zone, the value speaks for itself. Add in the outsourcing tax benefits, and it’s clear – delegating smart is scaling smart.
Want to find out what a VA could do for you? Download our free guide or book a discovery call today.
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