Can I skip the stocktake if my stock barely changed over the year?

Yes, generally — if your aggregated turnover is under $50 million and you reasonably estimate the change in stock across the year is $5,000 or less, you can choose not to do a formal stocktake. Your purchases for the year then effectively stand as your cost of goods sold.

Is the $5,000 limit about the stock I hold or the change in it?

The change. A business holding $40,000 of stock still qualifies if the level barely moved between the start and end of the year. Estimate $3,200 at the start and $4,900 at the end — a $1,700 movement — and the concession applies, so $34,000 of purchases stands as COGS.

What records do I keep if I use the stocktake shortcut?

Enough to show the estimate was reasonable — a rough count and a note is worth keeping. The concession lets you skip the formal valuation, not the judgment behind it, so a brief record of how you arrived at the figure is what supports the choice.

What counts as trading stock?

Anything you hold to sell or use up in producing what you sell: goods on the shelf, raw materials and work in progress. Normally you value it at the start and end of each year so the change flows into your cost of goods sold.

Business basics

Trading stock (and the $5,000 stocktake shortcut)

The goods you hold to sell — and when you can skip the stocktake.

Trading stock is anything you hold to sell or use up in producing what you sell: goods on the shelf, raw materials, work in progress. Normally you value it at the start and end of each year so the change flows into your cost of goods sold. If your aggregated turnover is under $50 million and you reasonably estimate the change across the year is $5,000 or less, you can choose not to do a formal stocktake.

That shortcut is why a lot of smaller businesses never do a stocktake at all. If your stock level is broadly the same each June as it was the previous July, the change is small, the concession applies, and your purchases for the year are effectively your cost of goods sold. You still need to be able to show the estimate was reasonable, so a rough count and a note is worth keeping.

Worked example

You estimate $3,200 of stock at the start of the year and about $4,900 at the end. The change is $1,700 — under $5,000 — so you can choose not to account for it, and your $34,000 of purchases stands as your cost of goods sold.

Common mistake

Assuming the concession applies without checking the size of the change. It is the movement that has to be $5,000 or less, not the stock itself — a business holding $40,000 of stock still qualifies if the level barely moved.

Grounded in ATO guidance. Figures last checked 18 August 2026. General information, not tax advice.

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