What’s Changed for Australian Businesses This Financial Year?

There have been a few changes this financial year that are worth knowing about if you run a business. Some are relatively straightforward, while others might mean changing the way you manage your payroll, cash flow or tax planning.

We also know that most business owners don't have the time (or the desire!) to keep up with every change that comes through from the ATO. You're busy actually running your business, and it's very easy for things like super changes, tax planning and ATO updates to get pushed down the list.

That's where we come in. Part of our job at Citrine is keeping on top of these changes, working out which ones actually apply to you and making sure they're taken care of properly.

So, here's a rundown of some of the things we think business owners should know about this financial year, without all the accounting jargon.

Super is now paid with your wages

One of the bigger changes for employers is Payday Super. Previously, businesses generally paid their employees throughout the quarter and then paid their super guarantee contributions quarterly. Under the new system, super now needs to be paid much more closely alongside wages.

The super guarantee rate remains at 12%, so this isn't an increase in the percentage of super you're paying. The big difference is when that money needs to leave your business.

For some businesses, that won't make a huge difference. For others, particularly those with larger payrolls, it changes the way cash moves through the business. Instead of holding that money until a quarterly super payment falls due, you now need to account for it every time you pay your staff.

It also means your payroll needs to be set up correctly to deal with the change.

If you're not sure whether yours is, please don't feel like you need to go and research Payday Super and work it all out yourself. We can look at your payroll, make sure everything is set up as it should be and talk through any impact the change might have on your cash flow.

We've also put together a more detailed guide explaining Payday Super and what changed from 1 July if you'd like to understand a little more about how it works.

If you're thinking about employing someone for the first time, it's also worth having a read of what your first employee actually costs. The wage is only part of the cost of employing someone, and knowing the real number before you hire can make planning a whole lot easier.

ATO interest is no longer tax deductible

This is an important one if your business currently owes money to the ATO.

From 1 July 2025, general interest charges and shortfall interest charges from the ATO are no longer tax deductible. In practical terms, it means carrying an ATO debt is now more expensive than it used to be.

ATO debt is something we see in businesses for all sorts of reasons, and it isn't necessarily a sign that something has gone terribly wrong. Cash flow might have been tight for a period, a BAS payment might have been larger than expected or several bills may have landed at the same time.

The important thing is not to ignore it.

If you have an outstanding ATO balance and you're not sure what to do with it, talk to us. We can look at the full picture, work out what is realistic for your business and, where appropriate, deal with the ATO on your behalf and help arrange a payment plan.

This is one of those things that is usually much easier to deal with early rather than waiting until the balance and interest have continued to grow.

What about the $20,000 instant asset write-off?

The instant asset write-off is one of those things you hear mentioned a lot around tax time, but it isn't always explained particularly well.

For eligible businesses, it can allow the business portion of certain assets under $20,000 to be claimed as an immediate tax deduction rather than depreciating the cost over a number of years.

That might include equipment, machinery, computers or other assets you need to operate your business.

What we don't want anyone to do is spend money purely because they've heard they can "write it off". A tax deduction doesn't mean you get the purchase for free, and spending $15,000 to save some tax isn't necessarily a good business decision if you didn't actually need to spend the $15,000 in the first place.

This is where talking to us before you make a significant purchase can be really useful. We can look at what you're planning to buy, how the deduction may apply, what it means for your tax position and, importantly, whether the timing makes sense for your business and its cash flow.

There can also be tax implications later if you sell an asset that has already been fully written off, so it's worth getting advice rather than assuming how it will be treated.

The ATO is looking more closely at business information

The government has committed significant additional funding to ATO compliance over the coming years, which means we're going to continue seeing more data matching, benchmarking and reviews.

The ATO now receives information from a lot of different sources, so it is much easier for them to compare what a business is reporting in one place with information being reported somewhere else.

Things like GST, PAYG withholding, payroll, trust distributions, Division 7A loans and cryptocurrency transactions are all areas that can receive additional attention.

That doesn't mean you need to be nervous every time you lodge a BAS. What it does mean is that having good records and making sure everything is being reported correctly is increasingly important.

This is also why we put so much emphasis on keeping your bookkeeping current throughout the year. When your accounts are properly reconciled, we're not working from numbers that are six or twelve months old. We can see what's happening in your business now, pick up things that don't look right and deal with them before they turn into a bigger problem.

We've written more about why doing your reconciliations every month actually matters, because they are much more than an admin job you do to keep Xero looking tidy.

If your books have fallen behind or your Xero file has become a bit messy, that's also something we can help sort out. You don't need to clean everything up before you come and see us.

June planning really shouldn't start in June

It might feel far too early to be talking about the end of the financial year, but that's actually the point.

If you operate through a trust, have a company with shareholder or director loans, or have Division 7A repayments to think about, there can be things that need to happen before 30 June.

Leaving all of those conversations until May or June can mean there are fewer options available and a lot more pressure to make decisions quickly.

We would much rather look at these things with you during the year. It gives us time to understand where your business is heading, what your tax position is likely to look like and whether there are things we should be doing now rather than trying to fix everything at the last minute.

We've written about exactly this in Planning Ahead vs Reacting in June. It's something we genuinely believe makes a big difference to the way a business manages tax.

We also have an end of financial year checklist, but despite the name, it's not something we think you should wait until the end of the financial year to read. A lot of the things on that list are much easier to deal with when there's still plenty of time before 30 June.

Where Citrine fits into all of this

One of the things we really want our clients to understand is that you don't need to know all of this yourself.

You started your business because you're good at what you do. We don't expect you to also become an expert in tax, payroll, superannuation, Division 7A, ATO payment arrangements and everything else that comes with running a business.

That's our side of things.

At Citrine Advisory, we look after accounting, tax, bookkeeping and business advisory, but we also want to be the people you can actually call when something comes up in your business and you're not sure what it means.

If you're thinking about hiring someone, talk to us. If you're about to make a large purchase, talk to us before you do it. If you've received something from the ATO that makes absolutely no sense to you, send it through. If you know your bookkeeping has fallen behind, don't spend your weekend trying to fix it before you call us. If you owe the ATO money and you're worried about it, let us help you work through it.

We would much rather be involved while there are still options available than hear about something twelve months later when we're preparing your tax return.

For us, good accounting isn't just about lodging everything on time. It's about knowing what's happening in your business throughout the year and making sure you have someone there who can take care of the financial side of things while you get on with running the business.

That's why our accounting, tax and business advisory services cover everything from bookkeeping, BAS and GST through to tax planning, cash flow forecasting, business structures and ongoing business advice. You don't need to work out which piece you need before you contact us. Tell us what's happening and we can help work that out with you.

We've also built the Citrine Knowledge Hub as somewhere business owners can go when they do want to understand something a little better. We're continuing to add practical guides that explain the things we get asked about every day, in normal language rather than accountant-speak.

And if you've read any of this and realised you're not quite sure whether something applies to you, just get in touch with us. You don't need to have all the information or even know what question you're supposed to ask.

Tell us what's going on and we'll work through it with you.

This article contains general information only and doesn't take your personal circumstances into account. For advice specific to your business, speak with a registered tax agent. Our team is available for a free no obligation discovery call.