RA Business Advisors

You are here: Home / Blog Posts

2026 Minimum Wage Increase: What Australian Employers Need to Do Before Payroll Changes Take Effect 

By Leave a Comment

The Fair Work Commission has handed down its 2026 Annual Wage Review decision, and while the headline figures may seem straightforward, the real challenge for many businesses lies in ensuring payroll systems, employee classifications, and compliance obligations are updated correctly. 

As accountants who specialise heavily in payroll and business advisory services, we know that annual wage increases often create more questions than answers for employers and admin teams. 

If your business employs staff covered by a modern award, now is the time to review your payroll processes and ensure you’re prepared before the new rates take effect. 

What Has Changed? 

From the first full pay period starting on or after 1 July 2026: 

  • $26.44 per hour
  • $1,004.90 per week based on a 38-hour week 
  • Minimum award wages will increase by 4.75%.

While these changes are designed to support workers facing ongoing cost-of-living pressures, they also create additional compliance obligations for employers. 

Importantly, the increase does not necessarily apply on 1 July itself. It applies from the first full pay period that starts on or after 1 July 2026, which can create confusion for businesses operating weekly, fortnightly or monthly payroll cycles. 

Why This Matters for Employers 

Many business owners assume that payroll software will automatically update everything. While payroll platforms can assist with rate updates, they cannot determine whether an employee has been classified correctly, whether allowances are being calculated accurately, or whether your payroll settings remain compliant with Fair Work requirements. 

This is where businesses often encounter problems. 

The Payroll Compliance Checklist 

Before your first payroll run after 1 July, we recommend completing the following checks: 

  • Review Award Coverage: Identify which employees are covered by modern awards and confirm that the correct award is being applied. 
  • Verify Employee Classifications: A common compliance issue occurs when employees are placed in the wrong classification level. Even if pay rates increase correctly, an incorrect classification can still result in underpayments. 
  • Update Pay Rates: Ensure all minimum rates, casual loading calculations, penalty rates and overtime rates are updated where required. 
  • Check Allowances: Many awards include allowances that are adjusted separately from base wage rates. These are often overlooked during annual updates. 
  • Review Enterprise Agreements: Businesses operating under enterprise agreements should confirm that employees remain better off overall compared to the applicable award rates. 
  • Test Payroll Software Settings: Do not assume updates have been applied correctly. Review payroll reports and conduct sample checks before processing wages. 
  • Consider Budget Impacts: The wage increase may affect labour costs, superannuation obligations, leave accruals and future staffing budgets. Planning ahead can help avoid unexpected pressure on cash flow. 

Need Help Reviewing Your Payroll? 

With the 2026 wage increase now confirmed, there is no better time to review your payroll processes and ensure your business is meeting its obligations. If you’d like assistance reviewing employee classifications, updating payroll systems, or conducting a payroll compliance health check, our team is here to help. 

Contact us today to discuss your payroll obligations and ensure your business is ready for the first full pay period after 1 July 2026. 

Federal Budget 2026: What The New Tax Measures Mean For Australians And Businesses 

By Leave a Comment

The Federal Budget 2026 introduces significant proposed tax reforms affecting individuals, investors, discretionary trusts and businesses. Key measures include changes to capital gains tax (CGT), negative gearing, discretionary trust taxation, small business tax concessions and personal income tax relief. 

For taxpayers and business owners, understanding these proposed changes early can help with tax planning, business structuring and investment decisions. 

What Are The Major Tax Changes Announced In Federal Budget 2026? 

The Federal Budget 2026 contains several significant tax measures, including: 

  • Reform of the capital gains tax regime
  • Changes to negative gearing rules
  • A new minimum tax for discretionary trusts
  • Previously legislated personal income tax cuts in 2027 and 2028
  • A permanent $20,000 instant asset write-off
  • Reintroduction of loss carry back for companies
  • Loss refundability for eligible start-up companies
  • Additional support for the Small Business Debt Helpline
  • Changes to electric vehicle FBT concessions
  • Medicare levy threshold increases and Private Health Insurance rebate changes

These measures have different commencement dates and may affect taxpayers differently depending on their circumstances. 

How Will Capital Gains Tax And Negative Gearing Change? 

The Budget proposes significant changes to property and investment taxation from 1 July 2027. 

Under the proposed CGT reforms: 

  • The current 50% CGT discount would be replaced by cost base indexation for eligible assets held longer than 12 months 
  • A minimum 30% tax on net capital gains would apply 
  • Transitional rules would preserve the current CGT discount on gains accrued before 1 July 2027 
  • Investors in new residential properties may be able to choose between the existing discount and the new indexed approach 

The Government has also announced changes to negative gearing. 

For established residential properties acquired after 12 May 2026: 

  • Rental losses would generally only be deductible against residential rental income or residential property capital gains 
  • Excess losses would be carried forward 
  • Eligible new builds would remain exempt 
  • Existing property owners would generally be grandfathered under transitional arrangements 

Property investors should carefully review how these proposed measures may affect future investment decisions and cash flow. 

How Will The Taxation Of Discretionary Trusts Change? 

The Government proposes introducing a minimum 30% tax on discretionary trusts from 1 July 2028. 

Under the proposal: 

  • Trustees would pay a minimum tax of 30% on taxable income 
  • Individual beneficiaries would receive non-refundable tax credits 
  • Corporate beneficiaries would generally not receive credits for tax paid by trustees 
  • Certain trusts and income categories would be excluded 

The Government also proposes expanded rollover relief from 1 July 2027 for small businesses wishing to restructure from discretionary trusts into alternative entities such as companies or fixed trusts. 

Business owners operating through discretionary trusts should consider reviewing their current structures before these measures commence. 

How Will Personal Income Tax Change In 2027 And 2028? 

The Budget confirms previously legislated tax cuts. 

The personal tax rate applying to income between $18,201 and $45,000 will reduce: 

  • From 16% to 15% from 1 July 2026 
  • From 15% to 14% from 1 July 2027 

These reductions are intended to provide ongoing tax relief to Australian workers and increase disposable income. 

What Changes Apply To Medicare Levy Thresholds And Private Health Insurance Rebates? 

The Government will increase Medicare levy low-income thresholds from 1 July 2025. 

Key threshold increases include: 

  • Singles: $27,222 to $28,011 
  • Families: $45,907 to $47,238 
  • Single seniors and pensioners: $43,020 to $44,268 
  • Senior and pensioner families: $59,886 to $61,623 

These changes may reduce Medicare levy liabilities for eligible low-income Australians. 

The Budget also proposes removing the age-based uplift for the Private Health Insurance (PHI) Rebate from 1 April 2027. 

Currently, Australians aged 65 and over may qualify for a higher rebate percentage. Under the proposed changes, this age-based enhancement would cease. 

What Support Is Available For Small Businesses? 

Several measures aim to support business growth, investment and cash flow. 

What Is The Permanent $20,000 Instant Asset Write-Off? 

From 1 July 2026, the $20,000 instant asset write-off would become permanent for eligible small businesses with turnover under $10 million. 

This allows qualifying businesses to immediately deduct eligible asset purchases costing less than $20,000 rather than depreciating them over several years. 

How Will Loss Carry Back Rules Return? 

The Government proposes reintroducing loss carry back for companies from 1 July 2026. 

Eligible companies with aggregated global turnover below $1 billion would be able to: 

  • Carry back eligible revenue losses 
  • Offset losses against tax paid in the previous two years 
  • Generate cash flow benefits through tax refunds 

The measure remains subject to franking account limitations. 

What Is Loss Refundability For Start-Up Companies? 

From 1 July 2028, eligible start-up companies with turnover below $10 million may be able to convert tax losses generated during their first two years into refundable tax offsets. 

The refundable offset would be limited to the value of: 

  • Fringe Benefits Tax paid 
  • PAYG withholding tax on Australian employee wages 

This measure aims to improve early-stage business cash flow. 

How Is The Government Supporting Small Business Owners? 

The Budget provides additional funding to continue: 

  • The Small Business Debt Helpline 
  • The NewAccess for Small Business Owners mental health coaching program 

These services provide practical support for business owners facing financial pressure and operational challenges. 

How Will The Electric Vehicle FBT Concession Change? 

The Government proposes reducing the current Fringe Benefits Tax concession available for electric vehicles. 

From 1 April 2029: 

  • Eligible electric vehicles would generally receive a permanent 25% FBT discount 
  • Existing transitional arrangements would apply for vehicles provided before the commencement date Higher-value electric vehicles may receive reduced concessions compared with current settings
  • Employers considering salary packaging arrangements involving electric vehicles should monitor these changes closely. 

What Should Taxpayers And Business Owners Do Next? 

While many measures remain subject to legislation, the Federal Budget 2026 signals significant tax reform over the coming years. 

Individuals should review: 

  • Investment strategies 
  • Property ownership structures 
  • Retirement and tax planning arrangements 

Business owners should assess: 

  • Entity structures 
  • Asset acquisition plans 
  • Tax loss utilisation opportunities 
  • Cash flow forecasting 

Early planning can help minimise unexpected tax consequences and maximise available opportunities. 

How Can Professional Tax Advice Help? 

Federal Budget measures often create both risks and opportunities. 

Our experienced accountants and tax advisers can help you understand how these proposed changes may affect your personal finances, investment portfolio or business structure. We provide practical, tailored advice designed to help you remain compliant while achieving the best possible tax outcomes. 

Make an enquiry today to discuss how the Federal Budget 2026 tax changes may impact your situation and what strategies may be available to you. 

 

ATO Fuel Response Payment Plan: What Small Businesses Need to Know

By Leave a Comment

Rising fuel costs are continuing to put real pressure on small and medium businesses across Australia. From tradies and transport operators to retailers and service providers, we’re seeing the flow-on effect hit everything—supplier costs, delivery fees, and ultimately, cash flow. 

As accountants working closely with small businesses every day, we’re having more conversations about ATO debt, payment stress, and how to stay compliant while managing rising expenses. The good news? The ATO has introduced a targeted support measure, the Fuel Response Payment Plan and it may provide some breathing room if you’re feeling the squeeze. 

Here’s what you need to know. 

What is the ATO Fuel Response Payment Plan? 

The Fuel Response Payment Plan is a temporary support initiative designed to help businesses impacted by rising fuel costs manage their tax debts more effectively. 

In simple terms, eligible businesses can: 

  • Enter into a payment plan of up to 36 months 
  • Start without an upfront payment
  • Potentially receive remission of General Interest Charges (GIC) if certain conditions are met 

This is a practical option if your business is viable but currently under pressure due to increased operating costs linked to fuel. 

Who is eligible? 

From what we’re seeing, the ATO is taking a targeted but practical approach. To be eligible, your business generally needs to: 

  • Have an active ABN 
  • Be impacted by higher fuel costs—either directly (e.g. transport, machinery) or indirectly (e.g. freight, supplier increases) 
  • Have a tax debt or be struggling to meet existing ATO obligations 
  • Show that your ability to pay has been reduced specifically due to fuel-related cost increases 

This isn’t a “blanket relief” measure—it’s designed for businesses that are genuinely feeling the impact and still intend to meet their obligations over time. 

 Key deadlines and conditions 

This is not an open-ended opportunity, so timing matters. 

  • Applications are available until 30 June 2026 
  • You must keep your lodgments up to date 
  • To be considered for GIC remission, you’ll need to: 
    • Stick to the payment plan 
    • Make instalments for at least three months 

From our experience, the ATO is far more supportive when businesses are proactive and engaged early. 

 What you should do before applying 

Before jumping into a payment plan, we strongly recommend taking a step back and reviewing your position properly. This is where we add the most value for our clients. 

Here’s what we typically work through: 

  • Review your current ATO debt and outstanding lodgments 
  • Identify and document how fuel costs have impacted your business 
  • Assess your cash flow and repayment capacity 
  • Ensure payroll obligations (wages and super) are being prioritised 
  • Determine whether a payment plan is the right solution—or just a temporary fix 

Not every business should default to a payment plan. Sometimes, restructuring cash flow or adjusting pricing can be a better long-term solution. 

 Don’t overlook payroll and compliance 

One of the biggest risks we see during cash flow pressure is businesses falling behind on payroll obligations. 

Even if you’re entering into an ATO payment plan, you still need to stay on top of: 

  • Employee wages 
  • Superannuation 
  • BAS lodgments 
  • PAYG withholding 

Falling behind here can create bigger issues than the original tax debt. This is why having the right systems—and advice—in place is critical. 

 How we help our clients navigate this 

This is exactly the kind of situation we deal with every day. 

We help our clients: 

  • Assess eligibility for ATO support measures 
  • Prepare the right documentation and financial position 
  • Communicate and negotiate directly with the ATO 
  • Align payment plans with real cash flow capacity 
  • Keep payroll and compliance on track 

Most importantly, we make sure you’re not just reacting—we help you plan forward so you don’t end up in the same position again. 

 Final thoughts 

The ATO Fuel Response Payment Plan is a valuable option if your business is under pressure from rising fuel costs, but it’s not a one-size-fits-all solution. 

If you’re unsure whether this applies to you, or you’re already feeling the strain of ATO debt and cash flow issues, now is the time to act, not later. 

If you’d like help reviewing your situation or speaking to the ATO, get in touch with our team. We’ll help you find the right path forward with clarity and confidence. 

Payday Super is coming: what small businesses need to fix before 1 July 2026

By Leave a Comment

The ATO is warning small and medium businesses to be prepared to avoid seeing any confusion around the upcoming Payday Super changes. Many business owners assume it simply means “paying super more often.” That’s not quite right and misunderstanding this could lead to compliance issues, cash flow pressure, and unnecessary stress. 

From 1 July 2026, Payday Super will fundamentally change how and when superannuation must be paid. If you run a business with employees, now is the time to get ahead of it. 

 What is Payday Super? 

From 1 July 2026, employers will need to ensure that superannuation contributions are received by an employee’s super fund within 7 business days of payday. 

This is a significant shift from the current quarterly system. It’s no longer enough to calculate super correctly and pay it “eventually.” Timing, accuracy, and processing speed will all matter. 

Importantly, the obligation isn’t met when you press “pay”, it’s met when: 

  • The contribution is received by the fund, and 
  • The correct data is provided so it can be allocated to the employee’s account. 

 The biggest misconception we’re seeing 

The most common assumption we hear is, “We’ll just pay super at the same time as wages.” But the reality is more nuanced. 

The compliance clock doesn’t start when you make a payment — it starts when your STP (Single Touch Payroll) event is lodged. From that point, you have a limited window for the super to be: 

  1. Processed 
  2. Cleared through your clearing house 
  3. Received and reconciled by the employee’s fund 

That last step is critical — because if there’s an issue anywhere along the chain, the payment may be considered late. 

For businesses using manual processes or systems that don’t fully integrate payroll and super, this is where risk starts to build. 

 Where small businesses may get caught out 

From our experience working in this space, there are four key areas where businesses are most exposed: 

  1. Data accuracy and onboarding gaps
    Incorrect super fund details and incomplete employee records can delay payments and under Payday Super, delays mean non-compliance. 
  2. Cash flow timing
    You’re not paying more super overall, but you are paying it sooner and more frequently. For many businesses, this creates a shift in working capital that needs to be planned for. 
  3. Limited time to fix errors
    Seven business days is a tight turnaround. If something goes wrong, whether it’s a rejected payment or incorrect data you don’t have the buffer you once did. 
  4. Increased compliance risk
    Late payments may trigger Super Guarantee (SG) charge obligations, including interest and administrative penalties. Even small mistakes can have financial consequences.

 What you should be doing now 

Under Payday Super, payroll isn’t just about paying staff correctly, it’s about ensuring every piece of data is accurate and flows through the system smoothly. 

We’re advising clients to focus on: 

  • Employee onboarding processes (especially fund selection) 
  • Up-to-date super fund details 
  • Payroll software capability and automation 
  • Super clearing house timing and reliability 
  • Integration with Single Touch Payroll (STP) 

 How we help businesses navigate this 

This is an area we specialise in, and it’s where we see the most value for our clients. 

We’re already working with small businesses to: 

  • Review and optimise payroll systems 
  • Identify compliance risks before they become issues 
  • Improve payroll accuracy and processes 
  • Forecast and manage cash flow impacts 
  • Ensure everything is aligned well ahead of 1 July 2026 

Our role is to make sure this transition is smooth, controlled, and stress-free. 

 Don’t wait until July 2026 

The biggest mistake we’re seeing right now is businesses assuming they have time. In reality, the earlier you prepare, the easier this transition will be. 

If you’re unsure whether your payroll systems, processes or cash flow are ready, now is the time to review. 

Get in touch with our team for a Payday Super Readiness check — and make sure your business is set up properly before the rules change. 

Payday Super is coming: what small businesses need to know about Qualifying Earnings

By

 

 

If you run a small or medium business in Australia, payroll compliance is about to change again. From 1 July 2026, employers will be required to pay superannuation on payday, not quarterly. This reform known as Payday Super is designed to improve employee outcomes, but it also means tighter processes and less room for error for business owners and admin teams. 

As accountants who specialise heavily in business payroll and compliance, we’re ready to help clients prepare.  

What is Payday Super, in plain English? 

Under the current system, most employers calculate and pay superannuation quarterly. Payday Super changes that rhythm. Instead, super will be calculated and paid in line with each pay cycle—weekly, fortnightly, or monthly—through upgraded SuperStream processes. 

This means super obligations will become part of your regular payroll workflow, not a separate quarterly task. From our experience, businesses that rely on manual workarounds or loosely defined pay items will feel this change the most. 

Qualifying Earnings (QE): the new term you need to understand 

Qualifying Earnings (QE) is the new base used to calculate Super Guarantee (SG) contributions under Payday Super. 

In simple terms, QE represents the earnings that super is calculated on each pay run, rather than being reviewed in arrears at the end of a quarter. The SG amount will be calculated as 12% of qualifying earnings, paid at the same time as wages. 

According to the Australian Taxation Office, QE closely aligns with what is currently considered salary or wages for super purposes—but the difference is timing and visibility. Errors will surface immediately, not months later. 

From a compliance perspective, this makes payroll accuracy more important than ever. 

 What payments are included in Qualifying Earnings? 

While the legislation is still being finalised, the ATO has clarified that QE will generally include: 

  • Ordinary time earnings (OTE) 
  • Base salary and wages 
  • Allowances that are considered part of salary or wages 
  • Salary sacrifice amounts paid to super 

What matters most is how your payroll system classifies pay items. We often see issues where allowances, bonuses, or leave types are inconsistently set up. Under Payday Super, these misclassifications can lead to underpaid super on every pay cycle—not just once a quarter. 

The calculation itself isn’t complicated. Getting the data right is. 

 What this means for payroll and cashflow 

From a practical standpoint, Payday Super has two major implications: 

  1. Cashflow timing changes
    Super will no longer be held and paid quarterly. Businesses will need to ensure sufficient cash is available at each pay run. This doesn’t increase the total cost of super—but it does change when the cash leaves your account.
  2. Payroll processes must be tighter
    With super calculated every pay cycle, there’s less room for manual fixes. Payroll systems need to be set up correctly, staff need clear processes, and reporting needs to be consistent.

For many businesses, this is where professional support makes a real difference. 

 A practical Payday Super readiness checklist 

Based on what we’re doing with clients right now, here’s how we recommend preparing: 

  1. Review all payroll pay items and map them correctly to qualifying earnings 
  2. Confirm your payroll software will support Payday Super and SuperStream changes 
  3. Update cashflow forecasts to reflect pay-cycle super payments 
  4. Run test pay runs to confirm QE calculations and SG amounts 
  5. Document payroll processes so admin staff can apply them consistently 

The ATO has released employer resources, including checklists and fact sheets, but implementation is where most businesses need help. 

 How we help 

Payroll and super compliance is a core part of our accounting practice. We work closely with businesses to review payroll setups, correct pay item classifications, and build processes that scale as your business grows. 

If you’d like us to review your payroll and help you prepare for Payday Super well before 1 July 2026, we’d be happy to help. Getting this right early puts you in control rather than scrambling later. 

Get in touch with our team to book a Payday Super readiness review.

Inheriting Property in Australia: The Hidden Tax Traps You Need to Know 

By


As accountants we work closely with small to medium businesses every day, we often see clients inherit property and assume it’s “tax-free” or something they can deal with later. 

Unfortunately, that assumption can be costly. 

Inheriting property in Australia can sit anywhere on the spectrum from completely CGT-free to unexpectedly expensive, depending on what you do next, how the property was used, and how the estate is structured. We regularly see people fall into avoidable tax traps simply because they didn’t get advice early enough. 

Here’s what you need to know before making any decisions. 

 The biggest myth: “Inherited property isn’t taxed” 

This is one of the most common misunderstandings we hear. 

While it’s true that you don’t pay CGT just because you inherit a property, capital gains tax often becomes relevant when the property is sold, transferred, or dealt with through a trust. The outcome can vary significantly depending on timing and use. 

 The 2-year rule: where many people slip up 

If the deceased person lived in the property as their main residence and it wasn’t being rented out, the property can often be sold CGT-free — but only if it’s sold within two years of the date of death. 

This sounds straightforward, but in practice we see issues arise when: 

  • Estate administration drags on longer than expected 
  • Family members delay selling “until the market improves” 
  • The property is rented out temporarily 

Once that two-year window is missed, the CGT exemption can be lost unless special circumstances apply. While the ATO can grant extensions, they are not automatic, and relying on one is risky. 

 Renting the property can change everything 

Another common trap is renting out the inherited property without understanding the tax consequences. 

If the property was the deceased’s main residence, renting it after inheritance may reduce or eliminate the CGT exemption when it’s eventually sold. We often see clients rent the property for short-term cash flow, only to face a much larger tax bill years later. 

What looks like a sensible short-term decision can have long-term tax consequences if it’s not planned properly. 

 Trusts: where things get more complex 

If the inherited property is held in a trust, the rules change again. 

In some trust situations, transferring the property to a beneficiary can trigger a CGT event, even if the property isn’t sold. This can result in tax becoming payable before any cash is actually received — a scenario that catches many families off guard. 

This is one of the clearest examples of why estate planning and tax planning must work together. We regularly help clients navigate these scenarios to avoid unnecessary tax and cash-flow stress. 

 Why a date-of-death valuation is critical 

Whether a property is pre-CGT (before 20 September 1985) or post-CGT has a major impact on how capital gains are calculated. 

In many cases, the cost base of the property is determined by its market value at the date of death. Without a proper valuation, you may struggle to support your CGT position later — potentially costing tens of thousands of dollars. 

This is one step that should be done early and properly. It’s not something you want to try and reconstruct years down the track. 

 What we recommend before you do anything 

Before selling, renting, or transferring an inherited property, we strongly recommend: 

  • Confirming how the property is owned (individual vs trust) 
  • Understanding whether the main residence exemption applies 
  • Identifying the relevant CGT deadlines 
  • Obtaining a date-of-death valuation 
  • Planning the timing of any sale in line with your broader tax position 

At RA Business Advisors we specialise in working with our clients and help them to navigate tax issues when they arise. With the right advice, many of these tax traps can be avoided entirely. 

If you’ve inherited a property, or think you might, contact us for clear, practical guidance. One brief conversation can save you stress, time, and costly mistakes down the line. 

Division 296 Super Tax Update: What It Means For Your Business

By

As accountants who work closely with small and medium business owners, we keep a close eye on any changes in the tax and superannuation landscape that could affect you, your staff, or your business structure. The government’s latest announcement on Division 296 — highlighted by the Institute of Financial Professionals Australia (IFPA) — is one of those important updates worth understanding.

Here’s what’s changed, who’s impacted, and what you should be doing to stay ahead.

What’s Changed?

On 13 October 2025, the Treasurer confirmed major adjustments to how Division 296 will apply:

  • Only realised gains will be taxed, not unrealised gains.
  • The $3 million total super balance (TSB) threshold will now be indexed in $150,000 increments.
  • A new $10 million upper threshold will apply, also indexed in $500,000 increments.
  • The start date has been deferred to 1 July 2026, with first assessments expected for the 2027-28 financial year.
  • Defined benefit pensions will be included to ensure consistent treatment across structures.

These refinements remove some of the more contentious elements of the original proposal and provide additional planning time — a welcome move for both business owners and advisers.

Who Is Affected?

While most small business owners and employees won’t be directly impacted, the changes matter if you:

  • Have a Self-Managed Super Fund (SMSF) with significant assets;
  • Hold multiple funds or defined benefit interests; or
  • Are planning to sell or restructure assets inside super in the next few years.

For admin and payroll teams, understanding the change helps manage staff questions and internal communications — even though Super Guarantee (SG) contributions remain unaffected.

What This Means For Business Owners & Admin Teams

  1. Strategic Review
    Owners with larger balances should revisit contribution strategies and consider the timing of realising gains. Because only realised earnings are now taxed, there’s scope to plan around asset disposals more effectively.
  2. Cash-flow Planning
    Modelling your potential exposure under the new thresholds ensures your fund can handle any future liabilities. This is especially important for SMSFs with illiquid assets.
  3. Payroll & Communication
    Prepare simple talking points for staff: the change affects only high-balance members, and does not alter SG rates or processing. Clear messaging will reduce confusion and demonstrate proactive leadership.
  4. Compliance & Advisory Readiness
    Use the lead-time wisely. By the end of FY 2026, aim to have your structures reviewed, documentation ready, and reporting processes aligned with the new Division 296 framework.

Action Steps Before 30 June 2026

  • Review your total super balance and growth projections.
  • Model potential Division 296 exposure across thresholds.
  • Assess your fund’s liquidity and investment mix.
  • Communicate the key facts with your admin or payroll team.
  • Book a tax and super review meeting to finalise your position.

Final Thoughts

The Division 296 update brings welcome clarity — and time — for planning. Even if your fund isn’t immediately affected, understanding the implications now means you’ll be ready when the rules take effect.

If you’d like tailored advice or scenario modelling for your business or SMSF, contact us today for a 30-minute review and practical next steps.

AI in Accounting: Why Reports Slip-Up Matters for Your Small Business

By

As your trusted accountant, I’ve been watching closely how artificial intelligence (AI) is increasingly used across business functions — including bookkeeping, payroll, tax-planning and financial reporting. AI offers tremendous promise: faster processing, smarter insights, reduced routine labour. But a recent high-profile mis-step by a Big 4 accounting firm shows exactly how things can go wrong — and why that matters for you, especially if you’re a small or medium business owner relying on accounting and payroll advice.

In July 2025, a Big 4 accounting firm published a report for a government department which reportedly incorporated generative-AI tools. The final version was found to contain fabricated references, mis-attributed court judgments and other factual errors — prompting Deloitte to issue a refund on part of its fee.
What’s significant is not just the mistakes themselves, but the system failures behind them — weak review, over-reliance on AI drafts, lack of provenance and human oversight.
For you as a small business owner, or someone managing payroll and accounts, this isn’t just consulting-world drama. It’s a reminder: when AI enters accounting, payroll or compliance workflows, it must be handled with discipline or it becomes a risk, not simply a productivity gain.

  1. What went wrong – and why you should care

For many small businesses, the core issues here translate into real-world risks:

  • The AI-generated elements introduced hallucinations (i.e., convincing but false content) — references and quotes that didn’t exist.
  • The review process apparently failed to catch those errors — meaning that the work reaching the client (in this case the government) was compromised.
  • Deloitte’s error undermines trust; in our sector (accounting, payroll) trust equals compliance, assurance and credibility. If your accounting tool or process uses AI in a weak way, you expose yourself to flawed advice, misclassification of payroll, incorrect tax treatment or audit issues.

In short: AI isn’t a magic bullet. Just using it doesn’t guarantee accuracy or reliability. Like we always say in accounting: checks, reviews, documented rationale still matter.

  1. Six AI-risks every SME in accounting and payroll should heed

While your business might not be drafting government-reports, here are risks that do apply in the SME context:

  1. Hallucinated outputs – AI might suggest incorrect tax rulings, mis-code payroll categories, invent vendor names or dates.
  2. Data privacy & confidentiality – When staff paste sensitive payroll, tax or client-data into generic chatbots, there’s risk of leakage or misuse.
  3. Compliance drift – The law, regulation (ATO, Fair Work, Superannuation, Payroll Tax) change regularly. If AI isn’t aligned to the correct Australian rules, you might act on outdated or incorrect advice.
  4. Opaque AI vendor behaviour – Some software may leverage “AI assistance” without telling you how much, or what validation occurs.
  5. Over-automation without human oversight – If you let AI generate payroll changes, journals, reconciliations without a human review step, small errors become big issues.
  6. Accountability gaps – If an AI-tool produces guidance but no one takes ownership, then when something goes wrong, who is accountable? This is especially important for SMEs with lean teams.

These are the kind of failures exposed in this case — and we should use this as a wake-up call for our own workflows.

  1. A practical AI governance checklist for your accounting & payroll

How can you use AI safely — and still gain benefit? As your accounting partner, here’s what I recommend we implement (or check) together:

  • Define approved tools & data-use policy: Use only tools that meet Australian privacy standards, avoid pasting TFNs, bank details, personal data into unvetted chatbots.
  • Human-in-the-loop review: Every AI-assisted output (e.g., payroll suggestion, cost-centre coding, financial forecast) must be reviewed by a qualified human (you or me).
  • Source-of-truth rule: Any advice or output from AI must be checked against legislation, ATO rulings, Fair Work awards, or professional judgement — AI doesn’t replace that.
  • Traceability / audit-trail: Keep records of what was generated by AI, prompts used, who reviewed, what changes were made. Good for compliance and future proofing.
  • Vendor due diligence: If your accounting or payroll software says “AI assisted”, check how the model was validated, how often it’s updated for Australian tax/award changes, what error-rate exists.
  • Training & awareness for your team: Staff who use AI tools need to know the risks — that the tool may be wrong, that they must apply professional judgement.
  • Start small, monitor results: Use AI for low-risk tasks (first draft letters, supplier-coding suggestions) before trusting it with payroll changes or tax advice.

When these guardrails are in place, AI becomes a booster for your accounting and payroll efficiency — not a liability.

  1. Where AI does work well in SME finance

It’s not all risk — there are practical win-wins for small business:

  • Invoice-processing-tool that suggests accounting codes (human reviews afterwards).
  • Spend-analysis dashboards that flag anomalies (you still decide on action).
  • Drafting standard letters or memos (you still personalise and check).
  • Payroll-software that highlights unusual payroll entries (you still approve).

In these cases you get improved efficiency and better oversight — but the key is controlled use, not delegate-and-forget.

  1. Book a Consultation: Stay Ahead of AI Risks

If you’re unsure how AI might impact your accounting or payroll, let’s talk. The Deloitte case shows what happens when AI goes unchecked — and small businesses can’t afford those mistakes.

Book a quick consultation with us to:

  • Understand the real risks of AI in your finance systems
  • Learn how to protect your data, compliance, and payroll accuracy
  • Get practical steps to use AI safely and confidently

AI should work for your business, not against it.
Book your consultation today and let’s make sure your accounting and payroll stay secure and future-ready.

Conclusion
This case is more than just a headline — it’s a reminder that in accounting and payroll, precision, accountability and trust matter. AI can absolutely be part of your business toolkit, but only when used with professional rigour. Let’s ensure your finance processes are efficient, modern and safe.

 

ATO Releases 2025 Tax Time Toolkit: What Small Business Owners Need to Know

By

Tax time is here again, and for many small business owners, it can be overwhelming knowing what you can and can’t claim — especially when you’re trying to stay focused on running your business. Fortunately, the Australian Taxation Office (ATO) has released its 2025 Tax Time Toolkit, and it’s a resource I recommend every small business owner looks at.

We work with small to medium business clients daily, and I know from experience that confusion around deductions, record-keeping, and tax obligations can cause unnecessary stress — and mistakes. That’s why resources like the Tax Time Toolkit are so valuable.

What is the ATO’s Tax Time Toolkit?

The ATO’s 2025 Tax Time Toolkit is a set of free, downloadable resources designed to help individuals and businesses get their tax returns right. It includes clear guidance on:

  • ✅ Occupation-specific deductions
  • ✅ Common work-related expenses
  • ✅ Records you need to keep
  • ✅ Residency for tax purposes

It’s a practical tool that aims to reduce confusion and help business owners avoid common tax pitfalls. Whether you’re claiming vehicle expenses, equipment purchases, or professional development costs, the Toolkit helps clarify what you can and can’t claim.

Why This Toolkit Matters for Small Business

If you’re a small business owner, understanding your tax obligations — and your entitlements — is critical. The reality is, many small businesses miss out on deductions they’re eligible for simply because they aren’t sure what’s allowed. Others may unknowingly overclaim, which can trigger ATO scrutiny.

The Tax Time Toolkit provides much-needed clarity. It’s especially useful for industries with unique deduction rules — trades, hospitality, health services, and more. If your admin team handles parts of your tax, it’s a great reference to keep handy.

As accountants who specialise in small business, we often see how easily tax time can go off track. Using the ATO resources is a smart first step — but getting tailored advice ensures you’re compliant and maximising legitimate deductions.

Beware of Common Tax Mistakes — Especially Around CGT

The ATO has also highlighted a key area where many tax returns go wrong: Capital Gains Tax (CGT). Mistakes often occur when business owners sell assets — whether it’s property, shares, or other investments.

To avoid these errors:

  • ✔️ Make sure you’re providing your accountant with full details of any assets sold during the financial year.
  • ✔️ Use the Online Services for Agents (OSFA) pre-fill reports — a tool we use extensively to cross-check your tax information.

Missing or incorrect CGT details can lead to unnecessary tax bills or compliance issues down the track.

How We Support Small Businesses During Tax Time

Tax time doesn’t need to be stressful. Our team works closely with small and medium businesses to ensure tax obligations are met accurately — and opportunities for legitimate tax savings aren’t missed. We help you:

  • ✅ Understand and apply the ATO’s Tax Time Toolkit to your specific situation
  • ✅ Navigate CGT rules and avoid common errors
  • ✅ Keep proper records and claim eligible work-related expenses
  • ✅ Get peace of mind knowing your tax return is handled by specialists

Need Help This Tax Time?

I always tell clients — the Toolkit is a great resource, but personalised advice makes all the difference. If you’d like help navigating your tax return and ensuring you’re maximising every legitimate deduction, contact us today.

Payday Super is Coming: What Small Business Owners Must Do to Stay Compliant in 2026

By

As an accountant who works closely with small and medium-sized businesses every day, I understand how challenging it can be to keep up with changing legislation — especially when it comes to payroll and superannuation compliance. And now, there’s another big change on the horizon: Payday Super.

The Australian Government recently confirmed that, starting from 1 July 2026, employers will need to pay their employees’ super at the same time as wages. This change is being introduced to close the multi-billion dollar unpaid super gap and ensure employees receive their super entitlements promptly.

But for many small businesses, this shift is more than just a compliance tweak — it could mean major changes to how you manage your cash flow, payroll systems, and reporting processes.

What Is Payday Super and Why Is It Changing?

Right now, most businesses pay super guarantee (SG) contributions on a quarterly basis. For many of our clients, this works well — it’s predictable, easier to manage cash flow, and allows time to catch and fix errors.

But from 1 July 2026, that will change. The new system will require employers to pay SG on or before payday. The rationale behind this is understandable: the ATO wants to crack down on unpaid super and ensure that employees aren’t missing out on their retirement savings.

While the intent is positive, the implementation will create added pressure on small businesses that aren’t well-equipped to handle frequent super payments.

What This Means for Small Business Employers

This change could have a significant impact on how your business operates:

  • Cash Flow Pressure: Instead of setting aside super for quarterly payments, you’ll need to have it ready for every single pay run.
  • Payroll Software Readiness: If you’re still using manual spreadsheets or outdated systems, they won’t cut it in the new world of real-time SG payments.
  • Admin & Compliance Burden: There’ll be a greater demand for accurate, timely processing.
  • ATO Penalties: The ATO will have greater visibility through STP, making it easier to detect errors or delays.

Quick Checklist:

  • Are you using up-to-date, cloud-based payroll software?
  • Do you regularly reconcile wages and super in real-time?
  • Do your admin or payroll staff know what the 2026 changes mean?
  • Have you reviewed your cash flow cycles to account for more frequent outflows?

How to Prepare Now (and Avoid Stress in 2026)

The good news is that there’s still time to prepare — but you don’t want to leave it until the last minute.

Here’s what I recommend as a proactive accountant working in this space every day:

  • Upgrade Your Payroll Software: Tools like Xero, MYOB, or QuickBooks can automate SG payments and integrate with STP.
  • Conduct a Payroll Health Check: Review how you’re managing payroll and identify gaps.
  • Review Your Cash Flow: Adjust your payroll calendar and budgeting to account for frequent payments.
  • Train Your Admin Team: Everyone involved in payroll should understand the new rules.
  • Get Expert Support: We specialise in helping small businesses stay compliant with less stress.

Our Perspective as Payroll & Super Experts

At our firm, we specialise in supporting small and medium businesses across a wide range of industries — and payroll compliance is one of our core strengths.

We know that many business owners don’t have the time or resources to deep-dive into legislative changes. That’s where we step in. From helping you modernise your systems to training your staff and ensuring you’re ATO-ready, our job is to make sure you stay compliant without adding stress to your plate.

📞 Book a Free Business Check-Up

Let’s review your payroll systems, assess your SG compliance, and help you plan for the transition to Payday Super — before it becomes a problem.

👉 Click here to book your free business check-up