What is the definition of a Small to Medium Enterprise?

In Australia, the definition of a Small to Medium Enterprise (SME) or SMB (Small to Medium Business) varies across the three largest government sectors: the Australian Bureau of Statistics (ABS), the Australian Taxation Office (ATO), and the Australian Securities and Investments Commission (ASIC).

The Four Types of Businesses in Australia

According to the Australia Bureau of Statistics (ABS), the four types of business in Australia are:

1. Micro Business

2. Small Business

3. Medium Business

4. Large Business

What is a Micro Business?

Micro Businesses are those businesses with 0-4 employees. According to the ABS, they are typically sole proprietors or partnerships. They have low or nil wages, and the owner-operators pay themselves out-of-business profits rather than receiving a wage or salary. [Ref: ABS]

What is a Small Business?

A small business in Australia typically refers to an organization with a turnover of less than $10 million and employing 5-19 employees, according to the Australian Taxation Office (ATO) and the Australian Bureau of Statistics (ABS).

Looking across the ABS (Australian Bureau of Statistics), the ATO (Australian Taxation Office) and the ASIC (Australian Securities and Investments Commission) governmental sectors, we see that the definition has a little more detail (and confusion) to it.

• The Australian Securities and Investments Commission (ASIC) defines a small company as “one that has an annual turnover of less than $25 million, no more than 50 employees and under $12.5 million in assets.”

• The Australian Taxation Office (ATO) considers a business with an annual turnover accumulating less than $10 million to be a small business.

• The Australian Bureau of Statistics (ABS) defines a small business as an organisation that employs 5-19 employees.

What is a Medium Business?

• The Australian Tax Office (ATO) defines a medium to large company as one “with an annual total income of more than $10 million.” [Ref: ATO]

• The Australian Bureau of Statistics (ABS) defines a medium business as employing 20-199 people.

What is a Large Business?

• The Australian Tax Office (ATO) defines a medium to large company as one “with an annual total income of more than $10 million.” [Ref: ATO]

• The Australian Bureau of Statistics (ABS) defines a large business as employing 200+ people.