How Much Does Small Business Restructuring Cost in Australia?

How much does a small business restructure (SBR) actually cost? An SBR has four separate cost components, and the one most directors ask about first isn't usually the biggest cost.

This guide covers the four main costs involved in an SBR, how they're set, and how they compare to the cost of not acting. If you're still working out whether SBR is right for your company, start with our SBR eligibility calculator. Want a quick estimate before you read on? Try our free debt reduction calculator.

What You're Actually Paying For

Many directors assume small business restructuring cost means one thing: the practitioner's invoice.

There are four distinct cost components to an SBR:

Practitioner fees — A restructuring practitioner is a registered insolvency professional who runs the SBR process on your company's behalf. Their fees have two parts:

The first covers preparing the plan and is fixed by your company's board before the practitioner is appointed.

The second covers the practitioner's work administering the plan once it's approved — collecting payments, reporting, and distributing funds to creditors over the plan period.

This second fee is set as a share of the funds collected, and it must be approved by your creditors when they vote on the plan. Neither fee is set unilaterally by the practitioner. Fees vary depending on the complexity of your matter and the size of your business. Compare practitioners through our practitioner directory or firms directory.
The plan contribution — what your company pays creditors under the restructuring plan.
Preparation costs — getting your books and compliance in order beforehand.
Ongoing compliance costs — keeping the company tax-compliant during the plan period.

The first cost above is usually the smallest. The second cost is usually the largest. Let's break down each one below.

The Four Costs of Small Business Restructuring

Cost 1 — Practitioner fees. A restructuring practitioner is a registered insolvency professional who runs the SBR process on your company's behalf. Their fees aren't set unilaterally — under the Insolvency Practice Rules, the fee for preparing the plan is fixed by board resolution before appointment, and the fee for administering the plan must be approved by your creditors when they vote. We won't quote a dollar figure here — fees vary depending on the complexity of your matter and the size of your business, and quoting a number would either be wrong for your situation or read as a promise. Compare practitioners through our practitioner directory or firms directory.

Cost 2 — The plan contribution (what you pay creditors). This is usually the largest cost, and the one that matters most to your outcome. It's the total amount your company pays into the plan — and it's worth knowing that the practitioner's ongoing administration fee (Cost 1, second part) is deducted from this amount before the rest is distributed to creditors, rather than charged separately on top. Recently, the typical dividend to unsecured creditors under an accepted plan sits around 30 cents in the dollar, though this varies. Your figure will depend on your company's financials, its ATO compliance history, and what your creditors are prepared to accept. For a directional estimate based on your own numbers, use the debt reduction calculator.

Cost 3 — Preparation costs. Before you can propose a plan, your books need to be current and your compliance gaps closed — including bringing employee superannuation up to date. Many directors bring in their accountant or bookkeeper to help with this. These costs sit outside the practitioner's fee and vary widely depending on how much work is needed. A good practitioner will tell you upfront what preparation your company needs.

Cost 4 — Ongoing compliance costs during the plan. Your company must stay tax-compliant for the life of the plan — typically up to two years. BAS lodgements, super payments and general compliance obligations continue as normal. This isn't really an "extra" cost of SBR; it's the cost of running a compliant business. But it catches directors off guard often enough that it's worth mentioning here.

Wondering how much your company's debts could realistically be reduced? Use our free debt reduction calculator to see the numbers for your situation.

Examples of SBR Costs

Here's a handy rule of thumb: SBR plan fees are often around 20% of the payment to creditors, which equates to about 6% of the total debt. Consider that in light of the fact that an SBR often achieves a 70% reduction of the debt.

ASIC's published data (to March 2025) also provides a useful benchmark for likely costs involved in an SBR.

For finalised Small Business Restructuring appointments, the average total remuneration for the restructuring process was around $24,000, while the average unsecured debt being dealt with was approximately $427,000.

In other words, businesses using SBR were, on average, restructuring hundreds of thousands of dollars in unsecured debt for a professional cost of around $24,000.

These figures are averages, not fixed prices. A straightforward restructuring with good financial records may cost less, while a more complex business or one requiring significant investigation may cost more. The important question isn't simply what the fees are — it's whether the restructuring gives the business a realistic opportunity to survive while delivering a better outcome for creditors than the alternatives.

The Cost of Not Acting

Every cost above is real, and it's fair to weigh it carefully. But the honest comparison isn't SBR cost against zero — it's SBR cost against what happens if you don't act.

ATO debt doesn't sit still. The General Interest Charge (GIC) compounds daily on unpaid tax, so the longer a debt goes unaddressed, the larger it grows.

Director Penalty Notices (DPNs) are the other side of this. If a company has failed to report its PAYG withholding, GST or Superannuation Guarantee Charge obligations within the required timeframes, a lockdown DPN may apply. In that situation, the director's personal liability cannot be remitted by later appointing a liquidator, voluntary administrator or commencing Small Business Restructuring (SBR).

While the ATO must generally wait 21 days after issuing (a non-lockdown) DPN before taking recovery action, that period does not reverse the director's personal liability. The key is to act before the company falls into lockdown DPN territory by lodging obligations on time and seeking restructuring advice early.

And if none of these paths is taken, the alternative is often forced liquidation — a more expensive, less predictable process, where directors have little say in how things unfold.

The cost of an SBR is real. So is the cost of not doing one. A proper assessment by a registered practitioner will tell you which path makes more commercial sense for your company.

Use our free debt reduction calculator to see the numbers for your company.

Getting a Clear Answer for Your Company

The cost of a small business restructure depends on your company's specific situation — but for most directors dealing with significant ATO debt, the numbers make sense once you compare them properly. The real question isn't whether SBR costs money. It's whether it costs less than the alternative.

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