Leading a not-for-profit (NFP) is all about making a difference. But alongside your purpose comes the reality of compliance, and missing an obligation can put your tax concessions, reputation and funding at risk.
To help, the Australian Taxation Office (ATO) has introduced a good governance checklist designed to make life easier for NFP boards and committees. Think of it as a guide to staying on top of tax, super and registry requirements, while giving your stakeholders confidence you’re doing the right thing.
Table of Contents
What is the ATO Good Governance Checklist for NFPs?
Introduced in December 2024, the ATO’s good governance checklist sets out the key compliance checks every NFP should carry out regularly. It’s broken into seven categories:
- All NFPs, regardless of size
- Self-assessed income-tax exempt NFPs
- Taxable NFPs
- NFPs with turnover over $150,000
- NFPs employing staff
- NFPs making payments to the ATO
- Charities registered with the ACNC
The ATO suggests using the checklist at least once a year. Many NFPs are now adding it as a standing item at board or committee meetings to make sure nothing slips through the cracks.
What’s Actually in the Checklist?
The checklist covers a broad range of responsibilities, depending on the type of NFP you are. Some of the key areas include:
- ABN and governance updates: Keeping board and authorised contacts current with the ATO.
- Director ID requirements: Ensuring directors are properly registered.
- Reviewing governing documents: Confirming your constitution reflects your NFP’s purpose and required clauses.
- Self-review return: Non-charitable NFPs with an ABN must confirm income-tax exemption annually.
- GST and BAS Lodgments: Mandatory if your turnover is above $150,000.
- Payroll obligations: Including PAYG withholding, super guarantee and fringe benefits tax (FBT).
- ATO payments: Ensuring all tax obligations are paid on time.
Running through this checklist at board meetings is now considered good governance practice. It reduces the risk of penalties and builds confidence among members, donors and regulators.
Why the Checklist Matters for NFP Tax and Compliance
Good governance isn’t just about meeting ATO rules. It’s about protecting your reputation, safeguarding your mission and showing members, donors and regulators that your NFP is run with integrity.
The deadlines are already in play. From the 2023–24 income year, all non-charitable NFPs with an ABN were required to lodge an annual self-review return confirming their entitlement to income-tax exemption.
- The first return (2023–24 year) was due by 31 March 2025.
- If your NFP hasn’t lodged yet, it’s critical to act quickly to avoid penalties and ensure your exemption is not at risk.
- Moving forward, the return must be lodged annually by 31 October.
The checklist provides a clear framework for catching up now and staying compliant going forward.
Governing Document Requirements for NFP Tax Exemption
To qualify for income-tax exemption, your constitution or rules need to include two key clauses:
- A clear prohibition on distributing income or assets to members, both during operation and if the organisation winds up.
- A requirement that any surplus assets go to another NFP with similar purposes if the organisation dissolves.
If your organisation hasn’t updated its governing documents yet, the transitional period to do so ends on 30 June 2025. Any NFPs that miss this deadline may jeopardise their entitlement to income-tax exemption. If you’re unsure about the status of your documents, now is the time to seek advice.
How Carbon Can Support NFP Compliance
Staying on top of compliance shouldn’t distract you from your purpose. At Carbon, we work with NFPs across all areas of their financial management, including:
- Accounting & Tax: Perform the ATO good governance checklist checks with you, complete the annual NFP self-review return, review your constitution and ensure your ABN, GST and FBT obligations are met.
- Bookkeeping & CFO Services: Keep your records accurate and reporting up to date, while also providing board-ready financial insights for stronger governance. We can also assist with budget creation and importation, preparing general-purpose financial statements, and managing grant acquittal reporting.
- Payroll: Manage staff obligations with confidence, from PAYG and superannuation through to award compliance.
- Advisory: Partner with you to build long-term financial strategies that protect your NFP and help it grow sustainably.
With our team behind you, your board can meet its obligations with confidence and stay focused on making an impact.
Stay on Top of NFP Governance and Tax
The ATO’s good governance checklist isn’t just a box-ticking exercise. It’s a chance to strengthen how your NFP operates, build trust with stakeholders and reduce the risk of costly mistakes.
If you’re unsure where your organisation stands or if you’ve already missed a deadline, now is the time to act. Our team can help you review your documents, catch up on lodgments and put simple systems in place so compliance never becomes a burden.
Frequently Asked Questions About BAS
All not-for-profits should use the checklist as part of their annual governance review. It’s especially important for non-charitable NFPs with an ABN, who must also complete an annual self-review return to confirm their tax-exempt status.
At least once a year. Many NFPs now include it as a standing item at board or committee meetings, and it’s also smart to revisit whenever your organisation’s structure or activities change.
You could lose eligibility for income-tax exemption. Updating your constitution or rules before the deadline is critical.
The first return (for the 2023–24 year) was due by 31 March 2025. From then on, returns are due annually by 31 October.
You’re not alone. The important thing is to lodge your self-review return as soon as possible. Acting now reduces risk and shows the ATO you’re serious about compliance. Carbon can step in to get you back on track quickly.
