Separate your business and personal finances

Many veterans move into business after the ADF – consulting, trades, security, training, hospitality and more. Whatever the business, one of the simplest habits you can build early is keeping business money and personal money apart.

• Use a separate business bank account for all business income and expenses, and pay yourself from it on a regular schedule.
• Keep good records using accounting software, and store receipts digitally. Your accountant will thank you.
• Set aside tax as you go – GST, PAYG instalments and income tax can add up quickly. A separate tax account helps avoid a nasty surprise.
• Build a cash flow buffer. Many business owners aim to hold a few months of business expenses in reserve, plus a separate personal emergency fund, so a slow quarter or a late-paying client doesn’t become a crisis.

Choosing a business structure

Your structure affects how you’re taxed, your personal liability, your paperwork and your options when you sell. There’s no single right answer, and it’s worth deciding with your accountant (and a lawyer for more complex set-ups). Here’s a general overview.

You can compare structures in more detail on business.gov.au. Structures can be changed later, but doing so can trigger tax and costs, so it pays to think ahead.

Paying yourself and your own super

How you pay yourself depends on your structure. Sole traders and partners draw on the profits of the business, while a company can pay you a salary, director’s fees or dividends. Each has different tax and super outcomes, which is where your accountant comes in.

• Super for yourself – the ATO confirms that self-employed sole traders and partners don’t have to pay super guarantee for themselves. It’s easy to let retirement savings slide, especially if you’re used to Defence contributions arriving automatically.
• Personal deductible contributions – you can make personal contributions and may be able to claim a tax deduction. You must give your fund a valid notice of intent and receive its acknowledgement before you claim the deduction.
• Concessional cap – deductible and employer contributions count towards the concessional contributions cap, which is $32,500 for 2026–27. If your total super balance was under $500,000 at the previous 30 June, you may be able to use unused cap amounts from up to five previous years.
• If you pay yourself a salary through your company, super guarantee generally applies to you as an employee of the company.

If you employ staff, super guarantee is 12% of their qualifying earnings in 2026–27. Under Payday Super, which became law and started on 1 July 2026, employers must pay super at the same time as wages, and contributions generally need to reach the employee’s fund within seven business days of payday. If you haven’t already updated your payroll processes, speak with your bookkeeper or accountant.

Selling up: small business CGT concessions and super

For many owners, the business is their biggest asset. When you sell, the small business CGT concessions may significantly reduce or eliminate tax on the capital gain. Broadly, you need to be a small business entity (aggregated turnover under $2 million) or meet the $6 million maximum net asset value test, and the asset must meet the active asset test.

There are four concessions:

• 15-year exemption – for owners who have held the asset for at least 15 years and are retiring or permanently incapacitated, among other conditions.
• 50% active asset reduction.
• Retirement exemption – gains can be disregarded up to a lifetime limit of $500,000. If you’re under 55, the exempt amount must be paid into super.
• Roll-over – defers the gain if you buy a replacement asset, among other conditions.

Eligible amounts can be contributed to super under a separate CGT cap – $1,935,000 for 2026–27 – rather than your non-concessional cap, provided you lodge the CGT cap election form with your fund when you make the contribution. The rules are detailed and timing matters, so plan the sale with your accountant well before you sign anything.

Insuring yourself and your business

When you’re the business, your ability to work is often its most valuable asset. Insurance can help protect your income, your family and your business partners.

• Income protection – can replace part of your income if illness or injury stops you working. For self-employed people, how income is assessed at claim time matters, so understand the definitions before you apply.
• Business expenses cover – may help meet fixed costs such as rent and staff wages while you recover.
• Key person cover – can help the business cope with the loss of someone critical to its revenue.
• Buy-sell (business succession) cover – funds the purchase of a departing owner’s share after death or disablement. It works best alongside a properly drafted buy-sell agreement prepared by a lawyer.

Pre-existing conditions, including service-related ones, may affect what cover you can get and on what terms. Be completely honest in your application – it protects your ability to claim later.

Succession and exit planning

Every business owner will leave their business one day – by sale, handover, wind-down or the unexpected. Planning early gives you more choices.

• Know what the business is worth and what drives that value, such as recurring revenue, systems and how much it relies on you personally.
• Reduce reliance on yourself – documented processes and capable staff make a business easier to sell.
• Line up your personal plans – your will, powers of attorney and super nominations should reflect your business interests. Shares and units may not pass the way you expect without the right documents.
• Think about life after the sale – how the proceeds will fund your lifestyle, and what you’ll do with your time.

Veteran-specific considerations

Your service can shape both the support available and the rules that apply to you.

• Getting started – the Veterans’ Employment Program’s Starting your own business page points to government and community support, and business.gov.au covers registration, tax, grants and planning.
• DVA incapacity payments – if you receive incapacity payments, your earnings from self-employment can reduce them. DVA’s policy notes that it looks beyond the net profit of a business when assessing your actual earnings, and may consider what it would cost to pay someone else to do the work you do.
• Special Rate Disability Pension (SRDP) – SRDP is generally for people unable to undertake remunerative work for more than 10 hours a week. Starting or growing a business may affect your eligibility. See our SRDP guide and talk to DVA or an advocate before you commit.
• Still transitioning? Our leaving the ADF guide covers the broader financial steps of moving into civilian life.

Things to weigh up

• Which structure suits your goals, risk and plans for growth or sale – now and in five years.
• How much you need to draw from the business to live on, and how reliable that income is.
• How regularly you’ll contribute to super, and whether carry-forward contributions could help in a strong year.
• Whether your insurance reflects your current income, debts and business obligations.
• How business income interacts with any DVA or Centrelink payments you receive.
• Whether you have the right team – an accountant, a lawyer and, if it helps, a financial adviser – working together.

Common mistakes to avoid

• Mixing business and personal money, making it hard to track profit and meet your tax obligations.
• Forgetting your own super for years because no one is paying it for you.
• Not setting aside money for tax, leading to a large bill you can’t easily pay.
• Relying on a handshake with business partners instead of a written partnership, shareholder or buy-sell agreement.
• Leaving exit planning too late and missing out on CGT concessions or a better sale price.
• Not telling DVA about work or earnings, which can lead to overpayments you later need to repay.