What is Payday Super?

Under the proposed Payday Super rules, employers will be required to pay employee superannuation contributions each payday, rather than quarterly.

The changes are designed to improve the visibility and timeliness of superannuation payments for employees, while helping reduce unpaid super across Australia.

For employers

The ATO has recently started emailing employers regarding Payday Super. If you have received correspondence from the ATO, it is important not to ignore it and to start preparing now.

Holmans recommends two key actions ahead of 30 June 2026:

• Start paying superannuation each payday now — this allows time to adjust payroll systems and internal processes before the new requirements commence.
• Pay the final quarterly super payment prior to 30 June 2026 — this may help avoid mismatching superannuation payments against the relevant payroll periods as the system transitions to payday reporting.

Employers should also ensure employee superannuation details are current and accurate prior to year end.

Further information is available via the ATO Payday Super page.

For employees

For employees, Payday Super means superannuation contributions will be received more regularly instead of waiting until the end of each quarter.

This provides greater visibility over employer super obligations and allows super balances to begin earning investment returns sooner.

Your employer may contact you prior to year end to reconfirm your nominated superannuation fund details. Other than this, no action is generally required from employees.

Preparing now can make the transition easier

While Payday Super is still approaching, businesses that begin adjusting processes early are likely to experience a smoother transition when the changes take effect.

If you have questions about how Payday Super may affect your business, payroll systems or reporting obligations, please contact the team at Holmans.

Further information:

• ATO – Payday Super
• AustralianSuper – Payday Super overview

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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As you will probably have seen and heard at every possible juncture this week … The Federal Budget on the 12 May 2026 contained some of the most significant tax changes in decades.

While many measures are proposed and not yet passed into legislation, the direction of reform is clear and will have important implications for individuals, property investors, business owners and family groups.

Below is an overview of the key tax changes. Holmans have focused on 3 of the largest changes, which have had our phones and emails here running hot:

• Negative Gearing
• Capital Gains Tax – Removal of the 50% Discount
• Minimum 30% Trust Tax

Importantly, these 3 large changes are due to apply at dates in the future. So there is lots of time for water to flow under this bridge ….. and there is still plenty of time for the Government to make changes (Div 296 & Taxation of Unrealised Gains in Super anyone?). Importantly, there is nothing you need to do urgently before 30 June 2026 in relation to those announcements.

As always, the devil is in the detail, and that detail is yet to be released. So the below is our best interpretation of the proposed changes.

1. Negative Gearing Changes (applies from 1 July 2027)

Grandfathered rules and exemptions:

• Existing properties will retain the current treatment. So no change for existing properties, even post 1 July 2027.
• Superannuation Funds are not covered by these new rules.
• Applies to residential properties only, so commercial properties and share investments are exempt.

New Residential Properties/Rules:

• Negative gearing will be limited to newly constructed residential properties post budget night.
• For established residential properties, a better way to look at the changes is to think “quarantine”, rather than the gearing has being abolished:
  • Losses can no longer offset salary or other income
  • Instead, the losses are quarantined and carried forward
  • Losses can only be applied against future property income (including other rental properties) and future capital gains on property.

What happens between Budget Night and 1 July 2027:

• Normal rules until 1 July 2027.
• To avoid disappointment or regret, we strongly recommend you consult with your accountant prior to any new property purchase to confirm how it may be treated.

Implications:

• In future, more cashflow may be required to hold older residential properties because of the lost tax break along the way.
• Clients looking for negative gearing opportunities will likely focus their attention on New Developments, so increased competition for new stock is expected.
• Alternate structures and options are available, and they might be worth discussing with your Accountant.

2. Capital Gains Tax (CGT) Reform

This change has been “bundled” with the negative gearing changes above, but it actually applies to all asset types, not just property.

Replacement of the 50% CGT Discount (Applies from 1 July 2027)

• The current 50% CGT discount the capital gain amount (where you owned the asset for greater than 12mths) will be removed from 1 July 2027.
• Instead, it will be replaced with:
  • Indexation of the cost base for inflation, and
  • A minimum 30% tax on the “real” capital gain
• Applies broadly to individuals, trusts and partnerships. Does NOT apply to Superannuation Funds.
• Applies to all asset types, including businesses, property, shares, crypto and so-on.
• Transitional rules will preserve gains accrued before 1 July 2027. Valuations and ATO approved methods of calculation/apportionment, will apply to any gains that accrued pre (50% Discount method) and post 1 July 2027 (Indexation method).
• Importantly, Pre-CGT Assets will be caught in this tax change and the gain post 1 July 2027 will now be taxable.
• There is a limited exemption from the minimum 30% tax where you are on Government Benefits.

Implications:

• It is expected to increase the tax collected on investment disposals when compared to the 50% General Discount method.
• It may no longer be as important to defer CGT events to low-income periods. However, it is best to consult with your accountant first.

3. Discretionary Trust Reform – Minimum 30% Tax

This is a fundamental change in the tax and ordinary concepts associated with Family (discretionary) Trusts.

30% Minimum Tax (from 1 July 2028)

• Introduction of a 30% minimum tax on discretionary trust income
• Does not apply to Fixed Trusts, Superannuation Funds and some Special Trusts (Deceased Estate and Special Disability Trusts). Note, there is a fear it will apply to Testamentary Trusts.
• The 30% tax will be paid at the trustee (Trust) level and creates a non-refundable tax credit
• Beneficiaries are still then taxed on their gross distribution from the Trust and can apply the tax credit against any tax payable in their hands. Importantly though, it is a non-refundable offset, ensuring that a minimum of 30% tax is paid on all Trust income.
• Beneficiary companies (often referred to as Bucket Companies) are in an even worse position, and at this stage, are not entitled to a credit at all. It appears double taxation of the income will likely apply (tax of up to 51%).
• The Government will announce an expanded rollover relief from 1 July 2027 to allow Trusts to restructure (without Capital Gains tax implication) in preparation for the new rules. Whether Transfer (Stamp) Duty will apply to the restructure is still a matter for the States.

Key consequences/implications:

• Reduces effectiveness of income splitting
• Bucket Companies arrangements appear to be dead.
• If you operate your business out of a Trust, you will need to review your structure prior to 1 July 2028.
• If your family Trust owns shares in a trading company, you may still need to review your structure to prevent lost franking credits (Franking Credits now appear to convert to a non-refundable offset instead, not necessarily flow through).
• Where families have an average tax rate lower than 30% in a normal year, they may now be disadvantaged under this new Minimum Trust Tax. Wages or restructuring will be required to ensure excess tax is not paid.
• In short, if you have a trust in your Family Group, your structure needs to be reviewed prior to 1 July 2028.

There are too many possible implications to detail here. The devil will most certainly be in the detail. Holmans expect the Government will receive a lot of industry feedback prior to implementation and accordingly, there may be changes, exemptions or even extensions to this law. Regardless, it will be important to plan prior to 1 July 2028.

4. Personal Income Tax Relief

Income Tax Cuts (from 1 July 2026)

• The marginal tax rate for income between $18,201 and $45,000 reduces from 16% to 15%, and is legislated to reduce further to 14% from 1 July 2027
• Provides modest but broad-based relief across all taxpayers

$250 Working Australians Tax Offset (from 2027–28)

• A new annual tax offset of up to $250 for workers
• Applies to salary and wage earners (and includes sole traders)
• Designed to increase the effective tax-free threshold

$1,000 Instant Work-Related Deduction (from 2026–27)

• Taxpayers can claim up to $1,000 without substantiation
• Larger deductions can still be claimed under normal rules

Practical takeaway:

These measures provide modest relief and simplification, but are largely outweighed (for many clients) by changes on the investment side.

5. Business and Small Business Measures

Permanent Instant Asset Write-Off

• $20,000 write-off was made permanent, provides certainty for capital investment planning

Loss Carry-Back (Reintroduced and now permanent)

• Companies can offset current losses against prior profits

Start-Up Support

• Introduction of loss refundability for early-stage businesses

What This All Means for you

While the reforms are significant, several key points should guide you:

1. Timing Matters

• Most major changes commence from 1 July 2027 or later
• Provides a planning window of 1–3 years

2. No Immediate Action Required

• For the 2026 tax year it is business as usual, there are minimal direct impacts from the budget prior to 30 June. Of course, Holmans recommend Tax Planning every year, but there is no additional urgency because of the Budget Announcements.

3. Strategic Review Required In Future

Clients should consider reviewing their group structures and investment strategies, including but not limited to:

• Trust vs company structures
• Timing of asset disposals
• Investment strategy (property vs alternatives)
• Use of superannuation and other suitable structures as a tax shelter

4. Avoid Reactive Decisions

• Many of the announced measures lack final detail, and changes do often occur prior to becoming legislation.

See your accountant and early. Leave sufficient time for planning and any implementation. For now, watch this space.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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Many small to medium business owners managing Sunshine Coast business tax obligations are paying more than they need to — not because they’re doing anything wrong, but because they haven’t reviewed their structure, setup, or strategy recently.

If your business has grown, changed direction, or simply become busier, there’s a good chance your tax position could be improved.

Here’s a quick check to see if you might be overpaying.

1. Has your Sunshine Coast business grown in the last 12–24 months?

What worked when you first started may no longer be the most effective structure today.

If your revenue or profit has increased, staying as a sole trader (for example) could mean you’re paying more tax than necessary.

A simple review of your structure can often uncover opportunities to improve tax efficiency and protect your assets.

2. Are you just “lodging” instead of planning?

Many businesses fall into the habit of:

• Doing the books
• Lodging BAS and tax returns
• Repeating each year

Without stepping back and planning ahead.

Tax outcomes are largely determined before the financial year ends — not after.

If you’re only reacting at tax time, you’re likely missing opportunities.

3. Are you clear on what you can actually claim?

Uncertainty around deductions often leads to one of two outcomes:

• Overclaiming (which carries risk)
• Underclaiming (which costs money)

Common areas of confusion include:

• Vehicle use
• Home office expenses
• Equipment and asset purchases
• Travel and mixed-use expenses

Clarity here can make a meaningful difference.

4. Is your bookkeeping up to date?

Outdated or inconsistent bookkeeping makes it difficult to:

• Track profitability
• Make informed decisions
• Identify tax-saving opportunities

More importantly, it often leads to rushed decisions later on.

Good data = better outcomes.

5. Are you surprised by your tax bill each year?

If your tax bill catches you off guard, it’s usually a sign that:

• There’s no forward planning in place
• Cash flow and tax haven’t been aligned
• You’re operating reactively instead of proactively

A clear tax strategy should remove surprises.

For further guidance on deductions and compliance, the Australian Taxation Office (ATO) provides up-to-date information for businesses.

6. Have you reviewed your setup recently?

Things change:

• Business income increases
• New revenue streams appear
• Personal circumstances shift

If you haven’t reviewed your setup in a while, there’s a good chance it’s no longer optimised.

Why this matters for Sunshine Coast businesses

Many local businesses experience steady growth without revisiting how they’re structured or managed from a tax perspective.

Over time, this can quietly lead to unnecessary tax being paid year after year.

Final thought

Paying tax is part of doing business — but paying more than you need to shouldn’t be.

A simple review can often highlight opportunities to improve your position without adding complexity.

Want a second opinion?

If you’d like a clear view of where your business stands, the team at Holmans can review your current setup and identify any opportunities to improve your tax position.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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Act Now to Prepare for Payday Super

While Payday Super is due to officially commence on 1 July 2026, employers affected by the new rules should begin preparing now.

Holmans recommends that all employers start applying the new Payday Super approach before 1 July 2026 so that any systems, processes and cash-flow impacts can be managed well before the rules become mandatory.

What is changing?

Payday Super changes how and when employers must pay employee superannuation guarantee contributions.

From 1 July 2026, employers will be required to pay employees’ super guarantee on payday, rather than quarterly.

This means super contributions must be paid whenever employees are paid — whether that is weekly, fortnightly or monthly.

Under the new rules:

• Super guarantee will be calculated at 12% of an employee’s qualifying earnings (QE).
• Qualifying earnings bring together ordinary time earnings (OTE) and certain other payments into a single definition.
• Super contributions must be paid to the employee’s super fund on payday.
• The contribution must be received by the super fund within 7 business days of the pay run, unless an extended timeframe applies (for example for new employees).

Closure of the ATO Superannuation Clearing House

The ATO Small Business Superannuation Clearing House will close on 30 June 2026.

Employers currently using the ATO clearing house will therefore need to transition to an alternative clearing house provider.

More information about the closure can be found here:
ATO Small Business Superannuation Clearing House

What employers should do now

Holmans recommends that businesses begin preparing now by taking the following steps:

• Check employee superannuation details
  Ensure each employee’s superannuation fund details are current and recorded correctly.
• Confirm your payroll software is compliant
  Check that your payroll or accounting software is STP and SuperStream compliant and that it will support Payday Super requirements. If unsure, speak with your bookkeeper or software provider.
• Choose a new clearing house if required
  If you are currently using the ATO clearing house, you will need to move to an alternative provider.
• Begin paying super each pay run
  Holmans recommends transitioning to Payday Super payments before 30 June 2026. This allows your business time to understand the cash-flow impact, ensure payroll systems are working correctly and resolve any administrative issues before penalties apply.
• Ensure super details are obtained for new employees
  Employers should ensure they have valid superannuation fund details on file for all new employees. Where employees do not provide fund details, a Stapled Super Fund may need to be used. Holmans’ general preference is to ensure super details are provided before employment commences where possible.

A list of SuperStream-certified clearing houses can be found here:
SuperStream Certified Product Register

What happens if employers do not comply?

The consequences of failing to comply with Payday Super requirements can be complex and costly.

These changes have been introduced to ensure that employees receive their superannuation contributions on time.

The ATO will use Payday Super reporting data to identify non-compliance quickly and move into review and enforcement where required.

For most businesses, it will be far simpler to prepare early and ensure systems are ready before 1 July 2026.

Where can I find more information?

• ATO Payday Super overview
  ATO Payday Super Overview
• ATO employer preparation checklist
  ATO Payday Super Checklist for Employers
• Xero Payday Super resources
  Xero Payday Super Information

You can also speak with your bookkeeper, payroll provider or software provider.

Need help preparing for Payday Super?

If you would like assistance reviewing your payroll systems, clearing house arrangements or superannuation processes, Holmans can help.

Please contact the Holmans team to discuss how your business can prepare for Payday Super before the 1 July 2026 deadline.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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Dual cab utes continue to cause confusion for small businesses when it comes to fringe benefits tax. A common belief is that heavy-duty work vehicles are automatically exempt from FBT, regardless of how they are used.

The reality is more nuanced. The Australian Taxation Office has made it clear that FBT can apply to the private use of dual cab utes, even where the vehicle is capable of carrying significant loads.

Why dual cab utes attract ATO attention

Vehicles provided to employees, directors, or business owners can give rise to fringe benefits tax when they are used for private purposes. This includes dual cab utes supplied as part of a work arrangement.

While certain exemptions exist, the ATO is concerned that many businesses focus only on whether a vehicle can carry a load of one tonne or more, without properly considering how often the vehicle is used for personal trips.

Regular private use — such as school drop-offs, shopping, or recreational travel — may result in FBT applying, even where the vehicle is primarily used for work.

When a dual cab ute may be exempt from FBT

A dual cab ute may be exempt from fringe benefits tax where it is designed to carry loads of one tonne or more, is not primarily used to carry passengers, and any private use is minor, infrequent, and irregular.

This exemption depends not only on the design of the vehicle, but also on how the vehicle is actually used in practice throughout the year.

What counts as minor and infrequent private use

The ATO provides specific guidance on what qualifies as minor and infrequent private use. For journeys undertaken for a wholly private purpose (other than travel between home and place of work), the exemption will generally apply only where:

• The employee does not use the vehicle to travel more than 1,000 kilometres in total for private purposes during the FBT year, and
• No single private return journey exceeds 200 kilometres.

If either of these thresholds is exceeded, the private use may no longer be considered minor and infrequent, and FBT may apply to the dual cab ute.

Further detail on this guidance is available in the ATO’s practical compliance guidance on minor and infrequent private use of vehicles.

Why record-keeping matters

To apply the correct FBT treatment, businesses must understand how their vehicles are being used. This involves identifying the type of vehicle provided, distinguishing between work and private use, and keeping accurate records.

• Odometer readings
• Logbooks or trip records
• Clear internal vehicle use policies

Strong record-keeping can help support a business’s position if the ATO reviews its FBT obligations. More general guidance on vehicle fringe benefits can be found on the ATO’s FBT and cars page.

FBT reporting and compliance obligations

Where a fringe benefit arises, employers must calculate the taxable value of the benefit and pay any FBT owed by the relevant lodgement date. In some cases, the benefit may also need to be reported through Single Touch Payroll.

The ATO has identified FBT compliance as an ongoing focus area for small businesses, supported by data-matching systems designed to identify employers who may be understating their obligations.

Reviewing your vehicle arrangements

The rules around FBT on dual cab utes are often misunderstood. What appears to be minor private use can quickly fall outside the exemption if usage patterns change or records are incomplete.

Regularly reviewing vehicle arrangements as part of your broader accounting and tax management can help reduce the risk of unexpected liabilities. Businesses with company vehicles may also benefit from reviewing their overall fringe benefits tax position to ensure the correct treatment is being applied.

Unsure whether FBT applies to your dual cab ute?

Holmans works closely with business owners and employers to assess vehicle use, apply the correct FBT treatment, and ensure records align with ATO guidance. Get in touch to review your vehicle arrangements and avoid unexpected FBT liabilities.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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As we move into 2026, many Sunshine Coast small businesses are refining their budgets, reassessing their financial goals, and planning for the year ahead. This Sunshine Coast budgeting 2026 approach is especially important as businesses prepare for a new financial cycle. Whether you’re running a café in Noosa, a trades business in Maroochydore, a medical practice, or a boutique accommodation property, a clear, well-structured budget is one of the strongest tools you have for building profitability and reducing financial stress.

Below is a practical, accountant-approved budgeting guide to help Sunshine Coast business owners start 2026 with clarity, confidence, and a plan for growth.

1. Review Last Year’s Numbers First

Budgeting starts with hindsight. Before projecting forward, take a close look at 2025:

• What were your biggest income months?
• When did cashflow tighten? (Common on the Coast: Feb–Mar, and post-winter.)
• Which expenses blew out unexpectedly?
• Did labour, rent, supplies, or utilities increase?
• Were there any one-off costs that won’t repeat?

For Sunshine Coast operators, seasonal patterns matter. Tourism cycles, holiday peaks, school terms, weather patterns, and local events all shape income and demand. Knowing these patterns helps create a realistic budget instead of wishful thinking.

2. Set Clear, Realistic Revenue Targets

Revenue forecasting for 2026 should bridge two realities:

• What your business historically earns
• What is reasonably achievable in changing market conditions

To build accurate targets, consider:

• Expected client demand
• Local economic conditions
• Industry-specific seasonal factors
• Planned expansions or new services
• Pricing adjustments or cost-of-living impacts

On the Sunshine Coast, population growth and ongoing construction activity mean many industries continue to expand. Businesses in trades, health, tourism, and retail should build targets that reflect this opportunity—without overextending.

3. Plan for Increased Costs (They’re Coming)

Operating costs have been rising across the Coast, particularly in:

• wages (due to award increases)
• insurance
• materials and supplies
• rent and commercial leases
• utilities
• software subscriptions
• compliance requirements

Your 2026 budget should build in realistic cost increases rather than relying on 2025 figures. A small buffer of 5–10% for variable expenses can help prevent shortfalls.

4. Reassess Your Pricing Strategy

Many business owners hesitate to adjust prices—but failing to increase prices while costs rise will erode profit.

Key considerations:

• When was your last price review?
• Are your margins still healthy?
• Are competitors on the Coast charging more?
• Have clients increased expectations for service, speed, or quality?

Sunshine Coast customers are value-driven, not necessarily bargain-driven. Transparent, modest price increases are accepted when communicated well.

5. Build a Strong Cashflow Forecast

Cashflow challenges are one of the most common issues we see at Holmans.

For 2026, your cashflow plan should include:

• Expected income by month
• BAS and tax instalments
• Super payments
• ATO obligations
• Loan repayments
• Quarterly/annual bills
• Seasonal dips in revenue
• Busy periods requiring more staffing or stock

Businesses on the Coast can often experience slower winters and strong summers—your forecasting should reflect this rhythm.

For general guidance on business budgeting, you can also refer to the Australian Government’s business.gov.au budgeting resources.

6. Prepare for Your 2026 Tax Obligations

Many Sunshine Coast businesses are caught off guard by tax bills because budgeting didn’t account for:

• tax instalments (PAYG)
• GST fluctuations
• superannuation guarantee increases
• deductions timing
• asset purchases
• changes to instant asset write-off thresholds

Early planning avoids end-of-year cash stress. A quarterly review with your accountant helps keep tax obligations predictable and manageable.

7. Review Your Business Structure

A new year is the perfect time to check whether your business structure still suits your income, risk level, and growth.

Consider a review if:

• profit has increased significantly
• you’re taking on employees
• you’re adding a second business
• you now own valuable assets
• you’re exposed to greater risk
• you’re paying more tax than necessary

The right structure can improve tax efficiency, asset protection, and succession planning—especially important for family-run Sunshine Coast businesses.

8. Update Your Payroll & Staffing Plan

Labour shortages remain a consistent challenge across the Coast.

Your 2026 budget should include:

• award updates
• minimum wage increases
• recruitment expectations
• holiday loading
• overtime
• training requirements
• additional staff for peak seasons

A good staffing plan protects service quality during busy tourism periods and reduces overspending during quieter months.

For up-to-date information on pay rates, minimum wages and award changes, visit the Fair Work Ombudsman’s pay and wages guide.

9. Review Subscriptions, Overheads & Hidden Costs

Every small business has recurring expenses that quietly grow over time.

Do a 2026 audit of:

• software subscriptions
• merchant fees and bank charges
• phone & internet plans
• insurance policies
• unused tools or services

Many Sunshine Coast businesses save thousands each year simply by trimming unused or overpriced services.

10. Set Clear Profit Goals for 2026 as Part of Your Sunshine Coast Budgeting Strategy

Finally, budgeting isn’t just about controlling expenses—you can’t cut your way to growth, so it is more about planning for profit.

Define:

• a target profit margin
• personal income goals
• money to reinvest in the business
• funds for tax and savings
• buffers for quiet months
• goals for debt reduction

Turning profit into an intentional, planned number—rather than something you “hope” happens—is the biggest shift that separates growing businesses from stagnant ones.

Final Thoughts

A strong, well-built 2026 budget gives Sunshine Coast business owners confidence, stability, and a roadmap for growth. Whether you’re adjusting for rising costs, planning for expansion, or preparing for seasonal shifts, taking the time to structure your financial year now will pay dividends all year long. A well-planned Sunshine Coast budgeting 2026 strategy helps businesses stay resilient and focused throughout the year.

Need help building a 2026 budget for your business?

Holmans specialises in supporting Sunshine Coast business owners with budgeting, forecasting, tax planning, and personalised accounting advice. Get in touch to start 2026 with clarity and confidence.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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No one enjoys the idea of an Australian Taxation Office (ATO) audit — but it’s a reality that individuals, investors, and business owners should understand and prepare for. The good news is that most ATO audits are triggered for specific reasons. With accurate reporting and open communication with your accountant, you can reduce the risk — and the stress — of an ATO review.

How often does the ATO conduct audits?

While not every taxpayer will face an audit, the ATO conducts thousands of reviews and audits every year across Australia. These are often targeted at industries or activities where discrepancies are more common, such as:

• Cash-based businesses (cafés, salons, trades, hospitality).
• High-value property or capital gains transactions.
• Unusually large deductions or expenses compared to similar taxpayers.

With increasingly sophisticated data-matching technology, the ATO automatically cross-checks information from banks, employers, superannuation funds, land titles offices and even digital platforms like Airbnb, Uber and eBay. If something doesn’t match what you’ve lodged, the ATO can quickly flag it for review.

Who might be audited by the ATO?

The ATO uses data analytics to identify potential red flags in tax returns and BAS statements. Common audit triggers include:

• Income that doesn’t match employer, bank or third-party data.
• Deductions that are unusually high for your occupation or industry.
• Sudden changes in income or expenses without a clear explanation.
• Failure to lodge tax returns or BAS on time.
• Being involved in arrangements that appear to artificially reduce tax.

Even when your records are accurate, you can still be selected for a random review — which is why keeping your documentation up to date is so important.

Why full disclosure to your accountant matters

Your accountant can only prepare accurate and compliant returns based on the information you provide. If income, expenses, assets or business activities are withheld, forgotten or misrepresented — even unintentionally — the risk of an issue during an ATO audit increases.

It’s also worth noting that your accountant generally cannot be held responsible for errors or penalties that arise because the information supplied by the client was incomplete or incorrect.

By being fully transparent, you allow your accountant to:

• Ensure your returns comply with current tax law.
• Claim all legitimate deductions — but not the risky ones.
• Prepare supporting documentation in advance.
• Defend your position more effectively if the ATO asks questions.

At Holmans, we always encourage clients to tell us everything upfront — prevention is far cheaper than responding to an audit.

The real cost of an ATO audit

An audit isn’t just inconvenient — it can be costly. Depending on the scope of the review, you may face:

• Professional fees for responding to ATO queries.
• Time spent locating and providing records.
• Interest and penalties if tax has been underpaid.
• Repayments that can stretch back several years.

Because of this, some businesses and high-risk industries choose to take out audit insurance to cover the professional costs of dealing with an ATO review. If you’re unsure whether this is appropriate for you, speak with us and we can outline the pros and cons.

How to stay on the safe side

You can’t completely remove the possibility of an audit, but you can make yourself far less likely to be targeted — and far easier to defend — by following some good practices:

• Keep thorough records — invoices, receipts, bank statements, logbooks.
• Lodge on time — late lodgements are a simple audit trigger.
• Be consistent from year to year, especially with deductions.
• Ask before you claim — get advice before making unusual or large claims.
• Respond to ATO correspondence quickly — never ignore a letter.

Good record-keeping plus an active relationship with your accountant is still the best defence.

Need help reducing your audit risk?

An ATO audit doesn’t have to be a nightmare. With transparency, solid documentation, and the right advice, you can get through it — or better still, avoid it.

Holmans helps clients across the Sunshine Coast and throughout Australia to stay compliant, minimise audit risk and understand exactly what the ATO is looking for.

Contact Holmans today to talk about ATO audit risk, audit insurance, or tax compliance for your business.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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ATO Targets Tradies and Professional Services

The Australian Taxation Office (ATO) has flagged the construction industry and the professional services sector for closer review. Here’s what small businesses should know.

Industries Under the Microscope

• Construction and professional services
  These sectors (tradespersons and professional services such as engineers, consultants, and accountants) are seeing recurring compliance issues with reporting and record keeping.

Common Tax Issues

• Incorrect income reporting
  Omitting sales or under-declaring income in BAS and tax returns remains a frequent error.
• Overclaimed expenses
  Private or personal costs are being claimed as business deductions when they shouldn’t be.
• GST mistakes
  Businesses are missing GST registration when required, or overclaiming GST credits.
• R&D Tax Incentive (R&DTI) errors
  Claims are being made for activities that don’t meet eligibility criteria or lack proper documentation.

Key ATO Warnings

• Closer monitoring
  The ATO is watching closely and will apply penalties and interest where errors are found.
• Amendments and audits
  You may be asked to amend returns or face an audit if reporting doesn’t align with records.
• Seek help early
  If you’re struggling to meet obligations, get assistance from a registered tax agent, a business adviser, or the ATO.

What the ATO Expects

• Report all business income
  Ensure no jobs, invoices, or deposits are left out of BAS and tax returns.
• Claim only legitimate business expenses
  Keep personal and business costs separate and substantiate deductions.
• Maintain complete records
  Keep full and accurate documentation, especially for R&D activities and expenses.
• Register for GST when required
  Register once your turnover exceeds the $75,000 threshold (or earlier if applicable).

Small Business Growth and Complexity

• Obligations increase as you grow
  Tax and super become more complex, particularly for businesses with $1 million–$10 million turnover.
• Accuracy matters
  Take extra care with income, deductions and offsets as your operations expand.

In Short

• Now is the time to review
  Double-check your reporting, record keeping and R&D claims—the ATO is paying attention, and strong documentation is your best defence.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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ATO payday super SBSCH closure 2026 – what employers need to know

The ATO payday super SBSCH closure 2026 is approaching. Small businesses that use the Small Business Superannuation Clearing House (SBSCH) should prepare now. The free service ends on 1 July 2026. In addition, new registrations close on 1 October 2025.

The SBSCH lets employers make one quarterly super payment, and it then distributes funds to each employee’s super fund. However, payday super will align contributions with wages. As a result, payments will be more frequent and the SBSCH model will no longer fit.

Why the SBSCH is closing

Payday super aims to reduce unpaid and late super. Therefore, employers will be required to pay super at the same time as wages. This shift moves SG from quarterly batching to pay-cycle payments. Consequently, the SBSCH becomes redundant, and the ATO payday super SBSCH closure 2026 will take effect.

What changes on 1 July 2026

• Employers will have seven days after each payday to ensure SG contributions reach the nominated super fund.
• Quarterly batching through the SBSCH will cease. This means super payments will be tied directly to pay runs.
• Payments will move into payroll software, commercial clearing houses, or services offered by super funds. As a result, payroll systems will become central to SG compliance.

Industry concerns and timing

Many support the reform because it can improve retirement outcomes. Even so, business and accounting groups have raised timing issues. Weekends, public holidays, and clearing house processing may tighten the seven-day window. For this reason, some suggest a phased approach to help small businesses adapt before the full effect of the ATO payday super SBSCH closure 2026. In contrast, superannuation industry groups argue the sooner it starts, the sooner employees benefit.

How to prepare now

• Review your current SG workflow and note what must change when payday super starts. This step ensures you can act early rather than rush at the deadline.
• Confirm your payroll software can calculate and pay SG each pay run, and check how it remits to funds. Many software packages will still be working on their solution at the moment.
• Compare commercial clearing houses and super fund payment services for cost, integration, and processing times. Choose the most efficient option for your business.
• Closer to the effective time, update payroll calendars, cut-off times, and approvals so contributions are initiated within seven days. In addition, factor in public holidays and weekends when scheduling pay runs. Holmans would recommend payment on the same day as wages with little or no delay.
• Brief your payroll team and bookkeeper. Also, update procedures, checklists, and reminder tasks to reinforce the new requirements.
• Monitor cash flow carefully. Since you will be paying per pay cycle rather than quarterly, this will change the timing of outgoings.

Key dates at a glance

• 1 October 2025: New registrations for the SBSCH close. Therefore, no new users will be able to access the system from this date.
• 1 July 2026: SBSCH closes and payday super begins. Consequently, SG must be paid within seven days of each payday.

Need help with compliance and setup?

The ATO payday super SBSCH closure 2026 will arrive faster than you think. Don’t wait until the deadline to find out your systems aren’t ready. Of course, our team at Holmans can guide you through every step — from planning your transition and configuring payroll software to implementing efficient, compliant payment workflows. Contact us today to ensure your business is ready to meet the new superannuation guarantee obligations from day one.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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Maximising Rental Property Deductions:
What You Can (and Can’t) Claim

Owning a rental property can be a great way to build wealth, but it also comes with a range of tax responsibilities. As a landlord, understanding what you can and can’t claim as a deduction is key to maximising your return while staying on the right side of the ATO.

The Australian Taxation Office (ATO) has clear guidelines around rental income and allowable deductions. Here’s what you need to know.

Declare All Rental Income

Before diving into deductions, it’s important to understand that all rental-related income must be declared. This includes:

• Rent received from tenants
• Rental bond money retained (e.g. for damage or unpaid rent)
• Insurance payouts related to the rental
• Reimbursements for expenses (like water or electricity)
• Government rebates or grants
• Income from short-term rental platforms (such as Airbnb or Stayz)

Whether you’re renting out a property long-term or casually letting it during holidays, income must be reported in your tax return for the year it was received.

What Can You Claim as a Deduction?

Here are some of the most common deductible expenses landlords can claim:

1. Interest on Loans – You can claim the portion of interest paid on your loan used to purchase, renovate, or maintain the property (but not the principal).
2. Council Rates and Water Charges – If you pay these costs as the landlord, they are deductible.
3. Repairs and Maintenance – Costs for fixing damage or wear and tear from tenants are deductible. However, improvements or renovations are treated differently.
4. Property Management Fees – Including agent commissions, advertising for tenants, and legal expenses related to leases.
5. Depreciation – On eligible assets like appliances, carpets, and hot water systems, using a quantity surveyor’s depreciation schedule.
6. Insurance Premiums – Including building, contents, and landlord insurance.
7. Travel Costs – If you incur travel costs for inspections or maintenance, these are no longer deductible for most individuals from 1 July 2017 (with some exceptions for corporate landlords).
8. Pest Control, Cleaning, and Gardening – Necessary upkeep expenses can be claimed, provided they are directly related to the property’s rental.

Be Careful with Capital Works and Improvements

It’s important to distinguish between repairs and capital improvements. While repairs can be claimed immediately, improvements—like replacing a kitchen or adding a deck—must be claimed over several years through capital works deductions. This is a common area where landlords get tripped up.

Part-Year or Private Use? Adjust Accordingly

If the property was only rented for part of the year or used personally at any time, you can only claim deductions for the portion of the expenses that relate to the rental period. Likewise, if you rent out part of your home (e.g. a room or granny flat), you must apportion expenses fairly.

Keep Records

To back up your claims, keep detailed records of all income, expenses, contracts, and receipts. The ATO requires records to be kept for at least five years, and being able to substantiate claims is crucial in the event of an audit.

By understanding your obligations and entitlements, you can make your investment work harder for you—both at tax time and over the long term.

Speak to your accountant to ensure your rental property deductions are accurate, compliant, and fully optimised.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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