Fractional CFO services in Australia

R&D Tax Incentive

Australia's R&D Tax Incentive provides a 43.5% refundable tax offset for eligible companies with aggregated turnover under AUD 20M (effectively a cash refund of ~18.5% of R&D spend net of corporate tax). Companies above the threshold get a non-refundable offset. The single largest source of non-dilutive cash for Australian tech startups.

Early Stage Innovation Company (ESIC)

The ESIC regime provides a 20% non-refundable tax offset to investors in qualifying early-stage innovation companies (capped at AUD 200k per investor per year). Plus a 10-year capital gains exemption on ESIC shares held 12+ months. Drives a meaningful share of structured Australian angel investment.

Industry Innovation grants

Federal programmes administered through Department of Industry, Science and Resources and AusIndustry - Industry Growth Program, Cooperative Research Centres, BioMedTech Horizons, Modern Manufacturing Initiative and others. Slow but non-dilutive and a credibility marker.

State innovation programmes

Australian states operate complementary programmes - NSW's Investment NSW, Victoria's LaunchVic, Queensland's Advance Queensland, WA's New Industries Fund. Programmes vary by state; worth checking state of incorporation.

Australian VC ecosystem

Australia's VC scene has matured significantly. Active funds include Blackbird Ventures, AirTree Ventures, Square Peg Capital, Folklore Ventures, Main Sequence (CSIRO-backed), Carthona Capital, OneVentures and Tidal Ventures. Cross-border participation from US, UK and Asian investors is heavy at growth stage.

Venture debt and growth lending

Australian venture debt has scaled with the broader VC market. Active providers include OneVentures Credit, Partners for Growth and cross-border lenders Kreos Capital and Claret Capital Partners. Typically deployed alongside priced equity rounds from Series A onwards.

ESS startup concessions

Qualifying startup ESS interests (options or shares) benefit from tax deferral - taxed only at disposal of the underlying shares, with capital gains treatment available on subsequent appreciation. Eligibility requires unlisted Australian-resident company, under 10-year-old, and turnover under AUD 50M. Materially improved by the 2022 reforms.

Standard ESS interests

ESS interests outside the startup concession regime are taxed at the earliest of vesting or disposal as employment income (with a discount available where conditions are met). Less attractive than the startup regime; most Australian venture-backed startups structure plans to qualify for the startup concession.

Restricted Stock Units (RSUs)

Used at later-stage Australian companies and post-IPO. Taxed as employment income at vesting at marginal rates. Double-trigger structures used at growth-stage private companies to avoid taxing employees on illiquid shares.

Phantom shares and SARs

Cash-settled equity-like instruments - the holder receives a cash bonus equal to the value of a notional option at exit. Taxed as employment income at payout. Used by companies that fall outside the ESS startup concession regime.

Option valuation

Australian startups typically peg option strike values to the price of the most recent priced round. Independent valuations or 'safe harbour' valuation methods (per ATO ESS valuation rules) used to support the position on fair market value at grant for ESS reporting.

Reporting and ATO

ESS interest grants and vesting events require annual ESS reporting to the Australian Taxation Office (ATO) and the employee via the ESS Annual Report. Option exercises flow through Australian payroll for income tax. Worth aligning between cap-table tool, payroll provider and Australian accountant.

Accounting

• •Xero - universal Australian default; the most-used accounting platform in the country.
• •MYOB - established alternative widely used at Australian SMEs.
• •NetSuite - for late-stage companies needing multi-entity consolidation.

Payroll

• •Employment Hero (and its Employment Hero Payroll / KeyPay) - startup-native Australian payroll.
• •Xero Payroll - integrated with Xero accounting for end-to-end SME payroll.
• •ADP Australia - established mid-market payroll engine.
• •Deel or Remote - for hiring contractors and staff outside Australia.

Business banking

• •CommBank, NAB, Westpac or ANZ - the Australian Big Four for treasury, FX and traditional debt.
• •Airwallex - Australian-founded; useful for multi-currency operations.
• •Wise Business - for multi-currency operations.
• •Mercury - for Australian founders with a US C-corp.

Cap table & equity admin

• •Cake Equity - Australian-founded cap table platform with strong ESS coverage.
• •Carta - for Australian companies with US investors or a US parent.
• •Ledgy - alternative with strong international coverage.

Expenses & corporate cards

• •Weel (formerly DiviPay) - Australian-built; clean Xero integration.
• •Airwallex corporate cards - alternative with FX-native pricing.
• •Brex or Ramp - for Australian founders with US C-corp parent.