EOFY Business Tax Planning Guide
FY 2026 Year-End Tax Planning Update - For Small Businesses
As the end of the financial year approaches, now is the time to review your business affairs and identify opportunities to improve cash flow, minimise tax, and ensure your compliance obligations are up to date.
This newsletter includes insights and strategies curated specifically for business owners. If you know fellow business owners (friends and family) who might find these updates helpful, please feel free to pass our newsletter along to them, to help keep them in the Loop!
In this newsletter, we have compiled the following tax related matters for small businesses to keep you in loop with common tax planning strategies.
If you have any queries in relation to the newsletter, please do not hesitate to contact our team.
Key Actions to Consider Before 30 June 2026
Many tax planning opportunities are only available before 30 June, so early planning is essential.
1. Review Your Year-to-Date Profit Position
Understanding your expected taxable profit before year-end is critical.
A review of your current financial position allows us to:
Estimate your likely tax liability
Identify tax planning opportunities
Review cash flow requirements
Avoid unexpected tax bills
If your bookkeeping is not current, now is the time to bring your records up to date.
2. Bring Forward Business Deductions
Where appropriate, consider prepaying eligible business expenses before 30 June.
Examples may include:
Business insurance premiums
Professional subscriptions and memberships
Interest expenses
Rent and lease payments
Software subscriptions
Bringing forward deductible expenses may reduce your taxable income for the current year.
Please note that specific rules apply to prepaid expenses.
3. Review Planned Asset Purchases
If your business is considering purchasing equipment or assets in the near future, timing may impact the tax outcome.
Examples include:
Computers and IT equipment
Office furniture
Machinery and tools
Manufacturing equipment
Motor vehicles
Different depreciation rules and concessions may apply depending on your circumstances.
We recommend discussing significant purchases with us before committing.
4. Review Capital Gains and Asset Sales
If your business intends to sell:
Business assets
Investments
Goodwill
Commercial property
Before proceeding, consider:
Capital gains tax implications
Availability of capital losses
Small business CGT concessions
Timing of the transaction
Early planning can significantly affect the tax outcome.
5. Trust Distribution Planning
Businesses operating through discretionary trusts should review their distribution strategy before 30 June.
Key considerations include:
Beneficiary tax positions
Distribution percentages
Family trust requirements
Asset protection objectives
Trustee resolutions generally need to be completed before 30 June.
Failure to properly document trust distributions can result in unintended tax consequences.
6. Review Director Loans and Division 7A
If funds have been withdrawn from a company by shareholders or directors, a review should be undertaken before year-end.
Areas to consider include:
Director loan account balances
Division 7A compliance
Minimum loan repayments
Loan agreements
Failure to comply with Division 7A requirements may result in loans being treated as unfranked dividends.
7. Review Payroll and Superannuation Compliance
Before year-end, ensure:
Payroll records are accurate
STP reporting is up to date
Superannuation obligations have been met
Employee entitlements are correctly recorded
Some of the key payroll matters to be be considered for FY 2026 are listed below:
Pay super by 30 June 2026 - Remember that employer super contributions must be received by the super fund before 30 June to be deductible this financial year.
Salary and wages (including director fees): Ensure PAYG withholding and reporting obligations have been met to prevent loss of deduction for non-compliant payments.
Superannuation Payments for current year: Ensure superannuation is paid by the due dates to maintain your income tax deduction. If any amounts have been paid late, ensure you have prepared and lodged the necessary superannuation guarantee charge forms with the ATO to minimise interest charges and penalties.
Single Touch Payroll (STP): Ensure year end payroll procedures have been completed and make a finalisation declaration. You must make a finalisation declaration for your employees by 14 July 2026.
Taxable Payment Annual Reports (TPAR): If you are in these following industries, you will need to prepare a TPAR:
Building and construction
Cleaning services
Courier services
Road freight services
Information technology services
Security, investigation or surveillance services
Mixed services (provides one or more of the services listed above)
Lodge the TPAR (if necessary) with the ATO by 28 August 2026.
8. Ensure Your Bookkeeping Is Up To Date
Accurate financial records improve decision-making and reduce compliance risks.
Before year-end, review:
Bank reconciliations
Loan account reconciliations
Creditor balances
Debtor balances
GST accounts
Payroll records
Complete stock take
Having the Right Accounting Software is the Key!
Keeping records current helps ensure a smoother year-end process and more accurate tax planning. Significant changes have been announced for Payday Super Regime applicable from 1 July 2026. With the ATO Small Business Superannuation Clearing House closing down, businesses must adopt an alternative, SuperStream-compliant software setup.
Payroll software is the critical engine for survival under the Payday Super regime. Because employers must pay super contributions within 7 business days of every payday (instead of quarterly), managing this manually is practically impossible. Software transforms a heavy administrative burden into a seamless, automated process.
If your business does not have an accounting and payroll software, we strongly recommend to book an appointment with our team to discuss your options as soon as possible.
Checklist for Key Year-end tax planning strategies for SBEs (Small business entities):
Accrue expenses - Ensure you accrue expenses where you have a present existing liability to pay the expense irrespective of the fact that you may receive the invoice or make the payment after year end.
Write off Bad Debts - Review your debtors listing and determine whether any debts can be written off. A written record should be kept evidencing the decision to write off the debt from the accounts.
Bonuses - If you have not paid your bonuses by 30 June, you may still be able to claim a deduction provided you have an obligation to pay this. To substantiate this, ensure the amount is quantifiable and approved (via minutes) and the staff are notified of the bonus. Note - super on bonus must be paid before 30 June 2026 to claim a deduction.
Prepay Expenses - Bring forward deductible expenses - such as rent, insurance premiums, memberships, subscriptions, by utilising the 12 month prepayment rule, in order to claim deductions early.
Pay Super for June 2026 quarter by 30 June 2026 - If you would like to claim a deduction for your superannuation guarantee accrued during the June 2026 quarter, ensure it is paid by 30 June 2026 (subject to cash flow). The amount should be received into the employee’s fund by 30 June 2026 so you may have to pay it earlier to allow for bank processing times.
Maximise depreciation claims - Leverage the $20,000 Instant Asset Write off pre 30 June 2026. Small businesses may be eligible for the instant asset write off (IAWO) on the purchase of eligible assets costing less than $20,000 for FY 2026. Any asset exceeding the $20,000 threshold can be allocated to a small business depreciation “pool” and the business can claim 15% in the year of purchase and 30% in subsequent years. If you plan on purchasing depreciating assets, ensure you have purchased and installed the asset ready to use by 30 June 2026 to claim the full amount of the depreciation in the 2025-26 financial year.
Dispose of Obsolete assets - Review your asset register and write off any assets that have been disposed or are no longer in use.
Simplified trading stock rules - If you are a small business, the simplified trading stock rules may apply. Broadly, you do not have to account for changes in trading stock for tax purposes where the difference between the value of the original opening stock and a reasonable estimate of the closing stock is $5,000 or less.
Write off obsolete closing stock - You should conduct a detailed physical stock take of all stock on 30 June. Retain your detailed stock sheets as part of your taxation records. Identigy any obsolete stock and write it off.
Business Tax Rates
Company Tax Rates – FY2026
Base Rate Entity Company - 25%
Other Companies - 30%
Individual Business Owners Tax Rates – FY2026
$0 – $18,200 - Nil
$18,201 – $45,000 - 16%
$45,001 – $135,000 - 30%
$135,001 – $190,000 - 37%
Over $190,000 - 45%
Plus Medicare Levy where applicable.
Information Required for Year-End Accounts
To assist with the preparation of your financial statements and tax returns, please provide the following where applicable:
Financial Records
Bank statements to 30 June 2026
Loan statements
Credit card statements
Finance agreements
Profit & Loss Statement
Balance sheet
Trial Balance
Business Assets
Asset purchase invoices
Motor vehicle purchase documents
Equipment finance contracts
Payroll & Super
Payroll reports, by employee
STP finalisation reports
Superannuation payment confirmations
Other Documents
Lease agreements
Significant contracts entered during the year
Legal settlement statements
Investment and dividend statements
Invoices for purchase of assets
Loan Agreement for Asset Finance
Common EOFY Mistakes We See
Waiting Until July to Start Tax Planning
Many tax planning opportunities disappear after 30 June.
Missing Trust Distribution Deadlines
Trustee resolutions generally need to be completed before year-end.
Poor Record Keeping
Missing invoices and unreconciled accounts often lead to delays and additional costs.
Division 7A Issues
Unreviewed director loans continue to be one of the most common tax compliance issues for private companies.
Incorrect Asset Treatment
Not all purchases can be immediately deducted. The correct tax treatment depends on the nature and cost of the asset.
Businesses operating without a compliant payroll and accounting software
An accounting software will become a critical engine for business survival after some of the latest changes announced for payroll and superannuation contributions. Managing a business without a proper payroll and accounting software will make a business non compliance and create additional work and fees.Correct approach is to streamline your business transactions using a cloud based software.
Need EOFY Tax Planning Assistance?
Every business is different. The most effective strategies depend on your business structure, profitability, cash flow requirements, and future plans.
If you would like to review your EOFY tax position and identify available planning opportunities, please contact our office before 30 June 2026.
Disclaimer: The information provided in this newsletter is general in nature and does not constitute specific tax or financial advice. It has been prepared without taking into account your specific objectives, financial situation, or needs. We recommend you seek professional advice from a qualified tax agent before making any decisions based on this information.
Source: NTAA and ATO