2026 EOFY Tax Planning and Key Tasks
As 30 June approaches, it’s worth reviewing both tax planning opportunities and essential EOFY tasks. The goal isn’t just to reduce tax, but to manage cash flow, timing, and compliance in a way that suits your business.
Important Disclaimer – Australian tax legislation contains specific anti-avoidance provisions which target schemes entered into with the dominant purpose of tax avoidance. It is essential that you consider your specific circumstances before proceeding with any tax planning ideas to ensure these rules do not apply. While legally minimising tax should always be a consideration, it should not be the main driver in any transaction. The tax planning ideas contained in this summary are of general nature only and have been provided to assist you as business owners with some general ideas in relation to your tax affairs. The ideas should not be relied upon without seeking professional advice in relation to your own circumstances.
Tax Planning Opportunities
Managing the timing of income
The timing of when income is recognised can directly impact how much tax you pay this year versus next year. In some cases, simply shifting income by a few days can defer tax by 12 months.
Things to consider:
- Delaying invoicing until after 30 June may push income into next year
- Review how your business recognises income (cash vs accrual accounting)
- Only defer income where it makes commercial sense, cash flow still comes first
Bringing forward deductible expenses
Expenses are generally deductible in the year they are incurred or paid. Bringing forward costs into this financial year can reduce your taxable income now.
Things to consider:
- Prepaying expenses like rent, insurance or subscriptions (often up to 12 months deductible upfront)
- Paying supplier invoices before 30 June rather than in July
- Bringing forward planned business spending where it aligns with your cash position
Purchasing assets before year end
Buying business assets before 30 June may allow you to claim an immediate deduction or accelerate depreciation, reducing your tax bill.
Things to consider:
- Assets must be installed and ready for use before 30 June
- Consider timing of vehicle or equipment purchases already planned
- Ensure the purchase is commercially driven, not just for tax
Tax Tip: Instant Asset Write-Off (Current $20,000 Threshold)
Small businesses may be able to immediately deduct the full cost of eligible assets costing less than $20,000, rather than depreciating them over several years.
This can provide a significant upfront tax benefit, especially where asset purchases were already planned.
Key points:
- Applies on a per asset basis (multiple assets under $20,000 can be claimed)
- The asset must be installed and ready for use before 30 June
- Available to businesses with turnover under the relevant threshold
- The $20,000 limit is subject to change, so timing is important
Superannuation contributions
Super contributions can be a tax-effective way to reduce taxable income while building retirement savings. However, timing is critical.
Things to consider:
- Contributions must be received by the super fund before 30 June to claim a deduction this year
- Be mindful of contribution caps to avoid excess tax (info on super caps here)
- Allow time for clearing houses or bank delays
Tax Tip: Carry Forward Super Contributions
If your total super balance is below $500,000, you may be able to use unused concessional contribution caps from the past five financial years to make larger deductible contributions.
This can be a powerful strategy in a higher-income year, allowing you to “catch up” on super contributions and potentially reduce your taxable income more than usual.
Key points:
- Available if your total super balance is under $500,000 at the previous 30 June
- Unused caps can be carried forward for up to five years
- Particularly useful if your income has increased this year
- Contributions must still be received by your super fund before 30 June
Capital gains and losses
The timing of asset sales can significantly impact your tax outcome, particularly if you have capital gains or losses.
Things to consider:
- Deferring a sale delays the tax payable
- Bringing forward a capital loss can offset gains this year
- Small business CGT concessions may reduce or eliminate tax on eligible assets
Writing off bad debts
If income has previously been recognised but is no longer collectible, writing it off ensures you’re not paying tax on money you’ll never receive.
Things to consider:
- The debt must be genuinely unrecoverable
- It must be written off in your accounts before 30 June
- Keep evidence of attempts to recover the debt
Trading stock valuation
The value of your closing stock affects your taxable profit. Choosing an appropriate valuation method can reduce taxable income.
Things to consider:
- Conduct a stocktake before year end
- Stock can be valued at cost, market selling value, or replacement value
- Using a lower value can legitimately reduce profit
Reviewing PAYG instalments
PAYG instalments are based on prior year profits, which may not reflect your current year. Adjusting them can help manage cash flow.
Things to consider:
- Vary instalments if your income has changed significantly
- Avoid overpaying tax during the year
- Be cautious, underestimating can lead to ATO penalties
Important EOFY Tasks
Division 7A loan compliance
Loans from private companies to shareholders or associates can trigger tax if not managed correctly. Meeting minimum repayments avoids these being treated as dividends.
Things to consider:
- Make minimum yearly repayments before 30 June
- Ensure loan agreements are in place and compliant
- Review loan balances and interest calculations
Bonuses and director fees
Bonuses can be deductible this year if they are properly committed to before 30 June, even if paid shortly after.
Things to consider:
- Ensure bonuses are documented (e.g. board minutes) before year end
- Confirm the amount is determined and not discretionary after 30 June
- Consider cash flow impact when payment is due
Private use of business assets
Many business expenses have a private component. Accurately accounting for this ensures your deductions are correct and reduces ATO risk.
Things to consider:
- Update vehicle logbooks where required
- Review home office and mixed-use expenses
- Adjust for private use in your accounts
Trust distribution resolutions
If you operate through a trust, income must be distributed before 30 June to be taxed correctly. Missing this step can result in unintended tax outcomes.
Things to consider:
- Resolutions must be prepared and signed before 30 June
- Ensure distributions align with current tax rules and guidance
- Review which beneficiaries are appropriate each year
- Desborough will be in touch with clients with discretionary trusts to assist with this process during May/June 2026.
Important: ATO Focus on Trust Income Splitting
The ATO has increased its focus on how income is distributed from trusts, particularly where income is being split between family members. Recent guidance makes it clear that, in many cases, income should be taxed in the hands of the individual who actually earned or generated it.
This is especially relevant for professional services, consulting, and contractor-type businesses, even where you believe you are operating as a personal services business (PSB).
Why this matters:
- The ATO is targeting arrangements where income is diverted to lower-tax family members
- Simply operating through a trust does not automatically allow income splitting
- Even if you have multiple clients, the way income is generated and controlled is critical
Things to consider:
- Who is actually performing the work and generating the income?
- Are distributions aligned with commercial reality and contributions?
- Are there agreements or structures in place to support how income is allocated?
- Have you reviewed your position against recent ATO guidance?
What you should do:
- Review your current trust distribution approach before 30 June
- Be cautious about continuing historical income splitting arrangements without review
- Seek advice if your structure involves one main income earner and multiple beneficiaries
Super guarantee obligations
Super for employees is only deductible when paid, not when accrued. Timing can affect your tax position.
Things to consider:
- Ensure all required super is paid on time
- Consider paying June quarter super early to bring forward the deduction
- Be mindful of cash flow and compliance deadlines
Important: Payday Super Coming from 1 July 2026
From 1 July 2026, employers will be required to pay employee super at the same time as payroll is processed, rather than quarterly.
This is a significant change and will impact cash flow, payroll processes, and systems, so it’s important to start preparing now.
Key points:
- Super will need to be paid each pay cycle (e.g. weekly, fortnightly, monthly)
- This replaces the current quarterly super payment system
- Businesses will need to ensure payroll and accounting systems can handle more frequent payments
- Cash flow planning will be critical, as super will be paid earlier than under current rules
- Penalties may apply for late payments, so processes will need to be tight and automated where possible
What you should do now:
- Review your payroll software and processes
- Factor the change into your cash flow planning for next financial year
- Consider aligning super payments with each pay run ahead of time to get into the habit
Review Employee Pay Rates
EOFY is a good time to review employee pay rates to ensure they remain compliant with current award requirements. Many modern awards are updated each year, with changes typically taking effect from 1 July.
Missing these updates can lead to underpayments, backpay obligations, and potential penalties, so a quick review now can prevent issues later.
Things to consider:
- Are your employees covered by an award, and if so, which one?
- Have there been recent or upcoming increases to minimum pay rates?
- Are allowances, overtime, and penalty rates being applied correctly?
- Have employee classifications or duties changed over time?
What you should do:
- Review pay rates ahead of 1 July to ensure compliance with updated awards
- Check payroll settings to ensure increases are applied from the correct date
- Keep records of any changes made and how rates were determined
- Seek advice if you’re unsure which award or classification applies
Fringe Benefits Tax (FBT) review
If you provide benefits like vehicles, FBT may apply. Ensuring records are in order helps minimise risk and potential tax.
Things to consider:
- Confirm whether an FBT return is required
- Ensure logbooks and employee declarations are up to date
- Review how benefits are being provided and reported
General housekeeping
Good records and clean accounts make EOFY smoother and reduce the risk of errors or missed deductions.
Things to consider:
- Reconcile bank accounts and key balances
- Ensure all income and expenses are recorded
- Review inter-entity balances and loan accounts
Final thoughts
EOFY planning is about being proactive, not reactive. Small timing decisions and good documentation can make a meaningful difference to your tax position and reduce stress at year end.
If you’d like help reviewing your situation before 30 June, it’s best to start early so we can make the most of the opportunities available.
