Are you feeling overwhelmed by the prospect of managing your taxes? You’re not alone. Many Australians struggle with the complexities of financial management and tax compliance. 

The good news is that professional accountants can help. But how much should you pay an accountant in Australia? 

In this guide, we’ll walk you through tax accounting costs and how to choose a trustworthy accountant who will maximise your tax benefits.

Factors influencing tax accountant costs

Several key factors impact the fees charged by tax accountants in Australia.

Complexity of work

The more intricate your financial situation, the higher the fees. For instance, managing multiple income streams or investment properties typically incurs higher costs than a simple individual tax return. Whether you are employed or own a business will also influence the accountant’s cost. 

Accountant’s experience and qualifications

Highly qualified accountants with extensive experience often charge more for their expertise. However, their knowledge can potentially save you money in the long run through effective tax planning and minimisation strategies.

Geographical location

Accounting fees can vary significantly based on where you are based in Australia. Generally, accountants in major cities like Sydney or Melbourne may charge higher rates compared to those in regional areas.

Type and scope of services

The specific services you require will impact the overall cost. Basic tax return preparation will be less expensive than comprehensive financial planning or business advisory services.

Cost breakdown by accounting tasks

Sole traders and small businesses have a wide range of accounting needs. From tax returns to strategic planning, an accountant can be invaluable in helping you ensure tax compliance and maximising your tax benefits. 

Here’s an overview of average costs for some of the standard accounting services in Australia.

• Individual tax returns: $100 – $400

If you have a straightforward tax return from a single income stream, then you can expect to pay on the lower end of this figure. Meanwhile, more complex situations, such as multiple income streams or global income, might cost more. 

• Small business tax returns: $1500 – $5,000

How much you pay for a small business tax return will depend on your company’s size and the complexity of the business. Generally, sole traders pay less than larger companies.

• Bookkeeping services: $25 – $60 per hour

Rates can vary widely based on the bookkeeper’s experience and the complexity of your financial records.

• Tax planning and advisory: $150 – $800 per hour

Strategic tax planning services are often relatively expensive because your accountant will need specialised knowledge to devise effective plans and strategies. 

• Business Activity Statement (BAS) preparation and lodgement: $75 – $450 per quarter

The cost depends on the size of your business and the number of transactions involved. Sole traders can expect to pay less than small businesses with employees. 

• Goods and Services Tax (GST) advice and compliance: $100 – $500 per hour

Fees for GST-related services can vary based on the complexity of your business structure and transactions. Often, accounting firms will use these services as part of a larger financial management package. 

Average tax accounting costs across Australian states and territories

Accounting fees can vary significantly across different states and territories in Australia. On average, larger urban centres will see higher hourly accounting fees compared with more remote areas. 

Here’s a breakdown of average hourly rates for tax accountants. 

How to choose the right tax accountant

Selecting the right tax accountant is crucial for both your financial well-being and peace of mind. There are several factors you should consider when choosing an accountant for your individual or business needs. 

Qualifications and certifications

Look for accountants who are registered tax agents and members of professional bodies such as CPA Australia or Chartered Accountants Australia and New Zealand as you can vouch their credibility. 

Experience and area of expertise

Choose an accountant with experience relevant to your specific needs, whether that’s individual tax returns, small business accounting, or specialised industries. While a generalist might be helpful for certain tasks, it’s best to pay a bit more for specific expertise, especially for more complex accounting tasks. 

Client reviews and testimonials

Research online reviews and ask for references to gauge the accountant’s reputation and client satisfaction. A proven track record is crucial to build a trusting relationship with your accountant and ensure overall tax compliance. 

Transparency in pricing and communication

Opt for accountants who are upfront about their fees and communicate clearly about their services and processes. Shop around to see how their pricing compares to other service providers and read any small print when signing a service contract. 

Tips for reducing tax accountant costs

While essential for many small business owners, tax accounting costs can add up. Here are some ways to save money while ensuring tax compliance and maximising your benefits. 

Leverage technology and software

Use Australian-compliant accounting software like Xero, MYOB, or QuickBooks to organise your finances. Many accountants offer discounts for clients using these platforms. If you are a Lawpath user you can make use of various partnership offers to get easy access to some of these tools! 

Use the ATO’s myDeductions app to track work-related expenses and vehicle log books throughout the year. Also, consider cloud-based document storage solutions to easily share financial records with your accountant.

Maximise deductions independently

Familiarise yourself with common tax deductions for your profession. Keep detailed records of all potential deductions, including home office expenses, vehicle costs, and professional development. Plus, research industry-specific deductions relevant to your field in Australia.

Time your consultations strategically

Schedule meetings with your accountant during off-peak seasons (e.g., August-November) when rates may be lower. Make sure to prepare a list of specific questions to maximise the value of paid consultation time. In addition, consider quarterly check-ins rather than only annual meetings to spread costs and catch issues early.

Explore fixed-fee and package options

Many Australian firms offer fixed-fee packages for standard accounting services. Compare these to hourly rates for potential savings. 

Look for bundled services that include tax return preparation, BAS lodgment, and basic advisory for a set annual fee. Ask about early payment discounts or multi-year contract rates.

Improve your financial literacy

Attend free ATO webinars on tax topics relevant to your situation. Explore resources from professional bodies like CPA Australia or Chartered Accountants ANZ. Also, consider short courses on basic accounting and tax principles to reduce reliance on paid advice.

Organise meticulously

Create a dedicated “tax folder” (physical or digital) to collect all relevant documents throughout the year. Summarise income and expenses in a spreadsheet before meeting with your accountant. If you have multiple income streams, maintain a separate folder for each source. 

Explore alternative service models

Consider online-only accountants who may offer lower rates due to reduced overheads. Look into mid-tier accounting firms rather than larger corporations for more competitive pricing. For simple returns, you might be able to use a registered tax agent through ATO’s lodgment program, which is often more cost-effective. 

Negotiate and compare

Don’t hesitate to request quotes from multiple accountants and compare their service offerings. Ask about fee structures and whether there’s room for negotiation, especially for loyal, long-term clients. Inquire about discounts for referrals or for bundling multiple family members’ returns.

Maximise value-added services

If paying for advisory services, come prepared with specific business growth or tax planning questions to extract maximum value. Ask your accountant about tax-effective strategies for your specific situation that could lead to long-term savings. Utilise any included services like basic bookkeeping support or financial health checks to their fullest extent.

FAQ

How much does a tax accountant charge for a simple tax return?

For a simple individual tax return, you can expect to pay between $100 and $300. The exact cost will depend on your specific circumstances and the accountant’s pricing structure.

Are tax accountant fees tax-deductible?

Yes, fees paid to a registered tax agent for managing your tax affairs are generally tax-deductible. You can claim this deduction in the following year’s tax return.

What qualifications should I look for in a tax accountant?

Look for a registered tax agent who is a member of a professional accounting body like CPA Australia or Chartered Accountants Australia and New Zealand. Make sure that the accountant has experience and expertise in the services you require. Additionally, review the agent’s testimonials and references. 

Final thoughts

Choosing the right accountant and managing costs effectively can significantly impact your financial health. While the fees for accounting services in Australia can vary widely, the benefits of professional financial management often outweigh the costs. 

Investing in quality accounting services can lead to better financial outcomes, potentially saving you money in the long run through effective tax planning and compliance. Lawpath offers a wide range of services to help you ensure tax compliance while maximising your tax benefits along with a comprehensive accounting advice plan to empower you with the tools and professional advice you need to grow your business.