The start of a new financial year brings a range of important legislative and regulatory changes that may impact businesses, employers, taxpayers and superannuation members. From permanent tax concessions for small businesses to changes in superannuation contribution rules and personal income tax cuts, it is important to understand how these updates may affect your planning and compliance obligations.
Commencing 1 July 2026, here is a snapshot of some of the key changes across business, tax and superannuation that you should be aware of.
Business Changes
Instant Asset Write-Off Made Permanent
The $20,000 instant asset write-off is now a permanent feature for eligible small businesses, rather than a measure that requires annual renewal. This provides greater certainty for businesses planning capital purchases and managing cash flow. However, eligibility requirements and asset purchase timing should still be carefully reviewed before making investment decisions.
Loss Carry-Back Extended
Small businesses with turnover below $1 billion can continue to access the loss carry-back measure, allowing tax losses to be applied against profits from earlier income years. This may provide faster access to tax refunds during challenging trading periods.
Importantly, the measure is not automatic. Businesses can choose whether to carry losses back or carry them forward, depending on their individual circumstances and tax strategy.
Minimum Wage Increase
The National Minimum Wage has increased to $26.44 per hour, effective from 1 July 2026. Employers should ensure payroll systems have been updated accordingly and review any employment arrangements impacted by the increase.
Payday Super Commences
The introduction of Payday Super represents one of the most significant payroll changes in recent years. Employers are now required to pay superannuation contributions at the same time as wages, with contributions needing to reach an employee’s nominated superannuation fund within seven business days of payday. These rules also apply to contractors where the business is required to pay superannuation for them under the existing super guarantee rules, such as where they are paid mainly for their labour. If a contractor is paid by invoice, the payday is generally the date the invoice is paid.
The previous quarterly contribution cycle has been abolished, along with the Small Business Superannuation Clearing House. Businesses should ensure payroll processes and cash flow management practices are updated to meet these new requirements.
Tax Changes
Personal Income Tax Rate Cut
The marginal tax rate applying to income between $18,201 and $45,000 has reduced from 16% to 15%, delivering tax savings of up to $268 per year for eligible taxpayers.
Employers should ensure their payroll systems and PAYG withholding tables have been updated to reflect the new tax rates.
New $1,000 Standard Deduction
From the 2026-27 income year, employees will be able to claim a $1,000 standard deduction for work-related expenses without the need to retain receipts. This replaces the previous $300 receipt-free threshold.
It is important to note that this measure applies to 2026-27 tax returns lodged from July 2027 onwards, and not to 2025-26 tax returns lodged during 2026.
Superannuation Changes
Division 296 Tax Begins
A new Division 296 tax has been introduced for individuals with large superannuation balances. The measure applies a 15% tax on the proportion of earnings attributable to a total superannuation balance exceeding $3 million, with an additional 10% applying to balances above the very large super balance threshold (effectively balances exceeding $10 million).
For the 2026-27 financial year, the tax will apply where an individual’s total superannuation balance exceeds $3 million at 30 June 2027.
End to Super Fund Borrowing for Residential Property
Legislation has been passed to end the use of Limited Recourse Borrowing Arrangements (LRBAs) for the purchase of residential property through Self-Managed Superannuation Funds (SMSFs).
Existing borrowing arrangements can continue; however, new LRBAs for residential property acquisitions will no longer be permitted from 10 August 2026.
Contribution Caps Increased
Several superannuation contribution limits have increased from 1 July 2026:
- Concessional contribution cap: $30,000 to $32,500
- Non-concessional contribution cap: $120,000 to $130,000
- Bring-forward cap: $360,000 to $390,000
- General Transfer Balance Cap: $2.0 million to $2.1 million
Note: Individuals who have already triggered the bring-forward rule will remain subject to the existing $360,000 cap until their bring-forward period expires.
What Should You Do Next?
The 2026-27 financial year introduces several significant changes that may create both opportunities and compliance obligations for businesses and individuals. Whether it is reviewing payroll systems for Payday Super, reassessing asset purchases, considering superannuation contribution strategies, or understanding the impact of new tax measures, now is a good time to ensure your arrangements remain appropriate and up to date.
