Charity Accounting in Australia: A Complete Guide to Compliance & Reporting

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Running a charity in Australia comes with a lot of financial responsibilities. From tax exemptions to ACNC reporting, ensuring your charity stays compliant is crucial. In this guide, we’ll cover everything you need to know about charity accounting, including reporting obligations, tax benefits, and best financial practices to help your nonprofit thrive.

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Why Charity Accounting Matters

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Accounting for charities isn’t just about managing donations and expenses—it’s about transparency, sustainability, and legal compliance. Proper financial management ensures:

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• Compliance with ACNC & ATO regulations.
• Trust and accountability with donors and stakeholders.
• Efficient use of funds for mission-driven activities.

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If your charity is newly registered or looking to improve its financial management, this guide will help you navigate key responsibilities and best practices.

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Key Accounting Responsibilities for Charities

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ACNC & ATO Registration Compliance

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Every charity must be registered with the Australian Charities and Not-for-profits Commission (ACNC) and have an ABN (Australian Business Number). Depending on the structure, some charities also require a TFN (Tax File Number).

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Tax Concessions & Deductible Gift Recipient (DGR) Status

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Many charities qualify for tax concessions, including:

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• GST Concessions
• Income Tax Exemptions
• Fringe Benefits Tax (FBT) Rebates
• Deductible Gift Recipient (DGR) status (which allows donors to claim tax deductions)

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Financial Reporting to the ACNC

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The level of reporting required depends on your charity’s annual revenue:

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• Small Charities (Revenue under $500,000) – Lodge an Annual Information Statement (AIS).
• Medium Charities (Revenue $500,000 - $3 million) – Submit reviewed financial reports.
• Large Charities (Revenue over $3 million) – Provide audited financial statements.

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BAS, GST, and PAYG Reporting

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If your charity’s annual turnover exceeds $150,000, it must:

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• Register for GST and lodge Business Activity Statements (BAS).
• Handle PAYG Withholding if employees are paid.

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Best Accounting Practices for Charities

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Use Cloud-Based Accounting Software

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Accounting software like Xero Nonprofit, MYOB, or QuickBooks helps charities manage donations, expenses, and reporting while ensuring compliance with ACNC and ATO regulations.

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Keep Accurate Financial Records

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Charities must track all donations, grants, and expenditures. Using SuiteFiles or OneDrive can help with document storage and organization.

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Implement Strong Financial Controls

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To protect funds and prevent fraud, charities should:

• Separate financial duties (e.g., different people handling payments and approvals).
• Conduct regular financial reviews and audits.
• Have clear policies for handling cash donations and grant funds.

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Charity Tax Obligations & Concessions

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Understanding GST for Charities

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Some charities are exempt from GST on certain transactions, but if your annual revenue exceeds $150,000, GST registration is required.

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Payroll, Superannuation, & Volunteer Reimbursements

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• Charities must comply with award rates for employees.
• Volunteers aren’t paid wages but can be reimbursed for expenses.
• Superannuation contributions are required for eligible employees.

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Compliance Risks & How to Avoid Them

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Late or Incomplete ACNC Reporting

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Failing to submit reports on time can result in penalties or loss of charity status.

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Mismanagement of Donations or Grants

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All donations and grants must be used according to donor intentions and tracked transparently.

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Lack of Internal Financial Policies

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Without strong financial policies, charities are at higher risk of fraud, mismanagement, and financial instability.

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How Trinity Accounting Practice Can Help

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At Trinity Accounting Practice, we specialize in charity and nonprofit accounting. Our services include:

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• ACNC & ATO Compliance Support
• Bookkeeping & Payroll Management
• Tax Planning & BAS Lodgements
• Financial Reporting for Charities
• Governance & Risk Management Advice

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We help charities stay financially healthy and compliant, so they can focus on making a difference.

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Final Thoughts – Ensuring Your Charity’s Financial Success

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Managing a charity’s finances is complex, but with the right accounting practices, compliance strategies, and expert support, you can streamline your processes and avoid financial risks.

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📅 Need help with your charity’s accounting?
👉 Book a consultation today: https://calendly.com/ramy-hanna

📍 Trinity Accounting Practice
✅ Accounting Firm in Beverly Hills
☎️ 1300 200 005
📍 159 Stoney Creek Road Beverly Hills NSW 2209
🌐 www.trinitygroup.com.au
📅 Weekend & after-hours appointments available!

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