Bianca Coventry is a Registered Tax Agent specialising in small business. In this piece, she sums up the upcoming tax changes that you need to be aware of.
With the end of the financial year approaching, now is the time to prepare for upcoming tax changes and key compliance issues. From superannuation updates to GST reporting shifts, these changes could impact your business’s cash flow and compliance obligations.
Here’s what you need to know to stay compliant and avoid unexpected costs.
1. Superannuation guarantee increase
From 1 July 2025, the super guarantee (SG) rate will rise from 11.5% to 12%. This means that employers will need to contribute more to their employees’ super.
While this may not seem like a huge jump, it adds up – especially for small businesses with multiple employees. Now is the time to review payroll budgets and factor in the increased costs.
2. Payday Super: A game changer for employers
The Payday Super reform is set to begin on 1 July 2026, but it is still undergoing consultation. This reform will require businesses to pay employees’ super at the same time as wages instead of quarterly.
This major shift aims to improve retirement savings for workers, but may require cash flow adjustments for businesses. With 12-15 months to prepare, small businesses should:
- Review payroll systems to ensure compliance.
- Adjust cash flow strategies to account for more frequent super payments.
- Set aside super and PAYG withholding (PAYGW) each pay cycle to avoid shortfalls.
This good habit will help prepare you for Payday Super.
3. ATO moves non-compliant businesses to monthly GST reporting
From 1 April 2025, the ATO will require certain businesses to move from quarterly to monthly GST reporting if they have a history of:
- Late lodgments
- Unpaid GST debts
- Incorrect reporting
The ATO believes that monthly GST reporting helps businesses stay on top of their obligations. Many businesses that have voluntarily switched to monthly reporting have found it easier to manage cash flow with smaller, more frequent payments.
If your business is affected, you’ll receive a notification from the ATO. Once switched to monthly reporting, you must remain on this schedule for at least 12 months before being eligible to return to quarterly reporting.
Tip: If you’re struggling to meet BAS payments, reach out to the ATO or your accountant for cash flow management strategies.
4. Instant asset write-off: What you need to know
The government has proposed extending the $20,000 Instant Asset Write-Off (IAWO) for 2024-25, but this has not yet been legislated. We’ll have to wait for confirmation in the budget.
What businesses need to consider:
- Buy based on business needs, not just tax benefits – Ensure any purchases align with long-term goals.
- What if the law doesn’t pass? – If the extension isn’t legislated, assets over $1,000 will need to be depreciated over time instead of written off immediately. You’ll still get a tax deduction, but not the full value of the asset in one year.
- Vehicle purchases have limits – The IAWO does not apply to the full cost of passenger vehicles, which are subject to a car limit ($69,674 for 2024-25). A valid logbook is essential to claim deductions correctly.
5. Don’t rush to lodge your tax return
Every year, there’s a rush on 1 July as individuals and businesses race to lodge their tax returns and get a refund as quickly as possible. However, lodging too early can lead to errors and delays.
Employers have until 14 July to finalise payroll and submit income statements to the ATO. Other organisations – banks, health funds, investment providers, and government agencies – also submit pre-fill data during this period.
Lodging before all reporting is complete can lead to incorrect or missing data, potentially resulting in the ATO requiring amendments to your return.
Best practice: Wait until mid to late July to ensure all employer and financial institution reporting is finalised and accurate.
While tax changes can feel overwhelming, a little preparation now can save you stress, time, and money down the track. Stay informed, keep good records, and reach out to a tax professional if you need guidance.
In related news, the ATO has also just released its small-business focus areas for the next quarter – read about it here.
