Client – August 2026

Newsletter

Newslettter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 29 July 2026.

Are your financial goals still realistic? – Even if you decide your goals don’t need to change, revisiting them means a chance to confirm whether your current financial arrangements are still working in the right direction.

Take care when claiming occupancy expenses for work from home – The ATO’s found that some taxpayers are incorrectly claiming rent, mortgage interest and other occupancy costs as part of their working from home expenses.

ASIC report suggests it’s time to check on your mortgage offset account – ASIC’s review of eight major lenders has identified weaknesses in how offset accounts are opened, linked, monitored and managed.

Paid parental leave super contributions have started – Eligible parents who received government-funded parental leave pay for a child born or adopted from 1 July 2025 will now begin receiving their government-funded super payments.

Division 296 tax on large super balances – From 2026–2027, Divison 296 tax applies to you if you have a large total superannuation balance.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Single Touch Payroll, it’s time to get ready – From 1 July 2018, if you have 20 or more employees, you need to use Single Touch Payroll enabled software to report your tax and super information to the ATO. Please contact us if you need help.

Audit Insurance – Whilst historically, Tax Audits were targeted at big business and the wealthy, this has changed. Increasingly the ATO are turning their attention to both small to medium businesses and individuals. Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs. Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Are your financial goals still realistic?

Life rarely stands still. Career changes, growing families, property decisions and shifting personal priorities can quietly reshape what matters most to you financially. A goal that felt urgent five years ago may now be less relevant, while something that barely registered back then may have moved to the top of the list. That’s why a periodic check-in is worthwhile. Even if you decide your goals don’t need to change, revisiting them means a chance to confirm whether your current financial arrangements are still working in the right direction.

It can help to group your goals by thinking about what you want to achieve, how much money you’ll need and how long you have to get there. Consider:

short-term goals, such as building an emergency fund or saving for a holiday;
medium-term goals, such as paying down debt or renovating; and
long-term goals, such as building wealth for retirement.

Your investments should reflect three things working together: your goals, your investment timeframe (how long before you need the money) and your risk tolerance (how comfortable you are with ups and downs in value).

All three can shift. Someone with fewer financial obligations may accept more short-term volatility than someone closely approaching a property purchase or retirement. Health changes, job changes and family responsibilities can also affect how much risk feels appropriate at any given time.

Retirement planning benefits from the same kind of review. The lifestyle you pictured years ago, whether that involved travel, downsizing, helping family or working part-time, may look different today.

Thinking through the kind of life you want after work, what it might cost and where the income will come from helps keep your retirement plan connected to reality. Remember, a review doesn’t always have to mean big changes. Often it simply confirms you’re on track or highlights small adjustments that could be worth making now rather than later.

You don’t need to make spreadsheets or major decisions to start. Taking a few minutes to compare where you are now with where you want to be is often the most useful step.

Take care when claiming occupancy expenses for work from home

The ATO has found that some taxpayers are incorrectly claiming rent, mortgage interest and other occupancy costs as part of their working from home expenses. The key to getting it right is understanding the difference between running expenses and occupancy expenses, and what you’re eligible to claim.

Running expenses are the extra costs you incur working from home. These can include costs for heating, cooling or lighting; internet or data; phone costs; stationery; computer consumables; and the decline in value of office furniture or equipment not provided by your employer. You can’t claim expenses that have been reimbursed by your employer.

Occupancy expenses are the costs of owning or renting your home. These include mortgage interest, rent, council and water rates, land tax and house insurance premiums.

Employees can generally claim running expenses if they work from home to perform their substantive employment duties (not just answering a few emails or taking phone calls), incur additional costs as a result, and keep records to support the claim. There are two ways to calculate the deduction: the fixed rate method and the actual cost method.

Occupancy expenses are rarely deductible for employees. To claim occupancy expenses, you generally need to show that your homework area has the character of a place of business.

If you’re eligible to claim occupancy expenses, you must apportion them (which means calculating amounts related to private use versus work use) and only claim the work portion. This is generally based on the floor area used for work; the period the area was used for work; and your ownership or share, if the property’s jointly owned or the rent’s shared. There may also be capital gains tax consequences for occupancy expenses when using part of your home as a business premises.

ASIC report suggests it’s time to check on your mortgage offset account

You set up your offset account expecting it to reduce the interest charged on your home loan. But what if it’s not linked correctly, or isn’t operating as intended? ASIC has released a report examining how major lenders manage mortgage offset accounts. The review covered eight banks representing more than 70 per cent of Australia’s home loan market.

While practices varied across the banks, ASIC identified weaknesses at each lender in how offset accounts were opened, linked, monitored and managed. In some cases, customers missed out on the interest savings they were entitled to receive.

Offset accounts are marketed as an easy way to reduce interest across the life of a loan, yet the review found this promise isn’t always delivered. Loan repayments can stay the same while customers unknowingly pay more interest and take longer to repay their loan.

Among the failure types identified across the 204,000 loans reviewed, 55% involved an offset account that had been opened but not linked to the home loan, while 22% involved an account that hadn’t been opened. Other issues stemmed from system errors, process gaps and poor record keeping. In some cases, banks couldn’t even confirm whether a customer had originally asked for an offset account.

Given ASIC’s findings, you may wish to check that your offset arrangement is operating as intended:

log in to your online banking or mobile app and confirm the offset is linked to your home loan;
check whether the balance is being applied to the correct loan and at the applicable offset percentage provided under your loan terms;
review recent loan statements for anything that looks inconsistent; and
if you’ve refinanced or switched loan products, ask your bank whether the offset needs to be re-linked.

If the information is not available, raise it with your bank.

Paid parental leave super contributions have started

Welcoming a new child is a huge milestone, but taking time out of the workforce can also mean a pause in super contributions. From July 2026, that gap starts to narrow for eligible parents who received government-funded Parental Leave Pay (PLP) for a child born or adopted from 1 July 2025.

The Paid Parental Leave Superannuation Contribution (PPLSC) is a government-funded super payment for eligible parents who receive PLP and is intended to help reduce the long-term superannuation gap that can arise when a person takes time out of the workforce to care for a child.

Under the scheme, the ATO pays the contribution into your super fund as a lump sum after the end of the financial year in which you received PLP. There’s no need to make a separate application to receive the PPLSC.

The first PPLSC recipients will be individuals who received government-funded PLP in 2025–2026 for children born or adopted from 1 July 2025. Calculation and payment of PPLSCs by the ATO will begin from the start of the 2026–2027 financial year. For PLP received in 2026–2027, the related PPLSC will generally be paid after the end of that financial year.

The PPLSC is calculated by applying the superannuation guarantee rate of 12% to the PLP paid to you, and also includes a nominal interest component designed to compensate for the time between the original PLP being paid and the later ATO payment of the PPLSC.

The contribution is taxed at 15% in the super fund and counts towards your concessional contributions cap. If you also make salary sacrifice or personal deductible contributions, the PPLSC may need to be considered in your contribution planning for the year the lump sum is received.

In most cases, the ATO will pay the contribution to the fund that currently receives your super contributions. To help avoid delays, check that: your personal details are up to date with the ATO, Services Australia and your super fund; and your name and address match across your ATO, Services Australia and super fund records.

If PLP was shared, each person receives a contribution based on their share of the PLP taken. This makes it especially important that all details are up to date.

Division 296 tax on large super balances

If your total superannuation balance is above $3 million, a new layer of tax may apply to certain earnings attributable to the portion above that threshold. Division (Div) 296 tax applies from the 2026–2027 income year, with assessments expected after the relevant earnings information has been reported to the ATO.

Div 296 tax is levied directly on the individual and is separate from personal income tax and superannuation fund tax. The ATO issues the assessment, and payment is generally due within 84 days of the notice. Div 296 tax is in addition to the (up to) 15% tax that super funds pay on fund earnings in the accumulation phase.

From 2026–2027, Div 296 tax applies to you if you have a large total superannuation balances (TSB) as follows:

TSB up to $3 million: no Div 296 tax;
TSB above $3 million: 15% Div 296 tax on earnings attributable to super balances over $3 million; and
TSB above $10 million: a further 10% Div 296 tax on earnings attributable to super balances over $10 million.

These thresholds are indexed to the Consumer Price Index.

Unlike the tax on earnings paid by super funds, Div 296 tax applies to large super balances in the retirement phase as well as the accumulation phase.

You may be liable for Div 296 tax if your total superannuation balance just before the start of the year, or at year end, is above $3 million and your total superannuation earnings for the year are greater than nil (although for the first year of this new tax the ATO will only look at your TSB on 30 June 2027). Your TSB generally includes Australian super interests in APRA-regulated funds, SMSFs and relevant public sector schemes, subject to valuation rules and exclusions. Foreign super interests are excluded.

Certain individuals are excluded, including child recipients of a super income stream and individuals for whom a structured settlement contribution has been made in the relevant income year or any earlier income year.

The Div 296 tax calculation includes three broad steps:

your super fund calculates its Div 296 fund earnings for the whole fund for the year;
the fund attributes a share of those earnings to your interest in the fund and reports the amount to the ATO; and
the ATO applies a formula to work out the proportion of your TSB above each threshold and calculates the tax.

Div 296 fund earnings for APRA-regulated superannuation funds are attributed by the fund trustee on a fair and reasonable basis. However, small funds, including SMSFs, must use a specific formula to calculate the member’s share of earnings, based on the average value of their interest in the fund over the year. Trustees of defined benefit and certain other superannuation interests that don’t have an account balance attributable to the beneficiary (e.g. lifetime income streams) use an alternative method to attribute your earnings that’s more appropriate for those particular types of superannuation interests.

You can pay Div 296 tax personally, elect to release the amount from your super, or use a combination. If electing release, your application generally must be lodged within 60 days of the assessment notice. Tax attributable to a defined benefit interest is generally deferred until benefits become payable.

Explanatory Memorandum

Client – JULY 2026

Newsletter

Newslettter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 22 June 2026.

Don’t rush to lodge too early this tax time! – The ATO has a clear message this year: slow down and get your return right the first time.

Tax hacks, half-truths and what the ATO’s watching – The ATO is urging the community to be wary of incorrect or misleading information, particularly claims promising bigger refunds, shortcuts or tax time hacks.

Juggling multiple jobs without a tax time shock – If you don’t plan ahead, the way tax is withheld when you’re paid by multiple employers can lead to a surprise when you lodge your tax return.

What to check with your employer and payslips as payday super begins – The first time you’re paid after 1 July 2026, you should see super listed on your payslip alongside your wages.

Fixing rejected payday super contributions from 1 July 2026 – The much tighter window for contributions to reach your employees’ funds under payday super means knowing how to spot and fix a rejected contribution quickly is essential.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Don’t rush to lodge too early this tax time!

You may be tempted to lodge your tax return on 1 July to tick that job off the list, or to chase a refund to help with cost of living pressures. However, the ATO has a clear message this year: slow down and get it right. Early lodgers are far more likely to make mistakes, but patience and taking time to get all your financial information together usually leads to a smoother result.

The ATO automatically pre-fills information from your employer, banks, government agencies and health funds into your tax return to help you get it right the first time. While some pre-fill data trickles through from 1 July, most reporting and information is finalised later in the month.

If you wait until late July to lodge, most pre-fill information about your wages, bank interest, government payments and private health insurance details will be pre-filled. You can (and should!) still check it against your own records, add anything that is missing and include any deductions or offsets you’re eligible for.

While you wait for pre-fill to be complete:

check your contact details and bank account information are up to date, so corrections after lodgment don’t delay your refund;
collect receipts, logbooks and any private health insurance details so you have them ready to check against pre-filled information;
review the ATO’s occupation guides to confirm which deductions apply to your line of work; and
download or check the ATO app to track employment income, store your expense records and receive ATO account notifications.

Once pre-filled data is available, don’t just accept it on face value. Cross-check the figures against your own records, particularly for bank interest, dividends and government payments. If something looks wrong, contact the provider so corrections can flow through to the ATO.

If you realise after lodgment that something’s missing or incorrect, you can fix it through the ATO online amendment process via myGov once the original return has been processed, or by speaking with your registered tax agent.

Tax hacks, half-truths and what the ATO’s watching

Scrolling social media for a quick tax win? You’re not alone, but you may be heading for trouble. Incorrect claims are firmly on the ATO’s radar this tax time, and it’s outlined the key areas it’ll be watching when returns start landing.

The ATO is urging the community to be wary of incorrect or misleading information, particularly claims promising bigger refunds, shortcuts or hacks. A lot of the bad advice doing the rounds is coming from third-party sources: AI tools, social media “finfluencers”, and even well-meaning family and friends, who may unintentionally pass on information that simply doesn’t apply to your circumstances.

The key is, you remain responsible for what’s on your return. Taxpayers are accountable for ensuring the information they or their agents give the ATO is accurate, regardless of whether it came from a mate, a website or a chatbot. Penalties and interest can apply where claims can’t be substantiated.

Focus area 1: work-related expenses

Overclaimed work-related deductions are once again under the microscope. Every work-related claim must meet three tests:

the expense must directly relate to earning your income;
you must have paid for it yourself and not been reimbursed; and
you must have a record, such as a receipt, invoice or logbook, to back it up.

If you work from home, the fixed rate method lets you claim 70 cents for every hour worked from home, which already covers running costs such as internet, phone usage, electricity and stationery. A common mistake is “double-dipping” – using the fixed rate and then separately claiming items it already includes. Keeping a clear record of your hours worked from home throughout the year will make this far easier to substantiate.

Focus area 2: omitted income

The ATO is also reminding taxpayers to declare all sources of income on their return, including side-hustles, cash jobs, interest and rental income. With extensive data matching now in place across banks, sharing economy platforms and property managers, undeclared income is far more visible to the ATO than many people realise.

The flip side is that legitimate deductions are often broader than expected. The ATO’s occupation and industry specific guides – or a quick chat with your registered tax professional – can help you identify everything you’re properly entitled to claim.

Juggling multiple jobs without a tax time shock

Picking up a second job, holding multiple part-time roles, or doing gig work is now part of everyday life. But the way tax is withheld across multiple payers can lead to a surprise when you lodge your tax return. Making a plan can help avoid a lump sum bill later.

As an Australian resident for tax purposes, you’re generally entitled to the $18,200 tax-free threshold. This means you can earn up to $18,200 in an income year before paying income tax. Income from employers, taxable government payments, sole trader or contractor work under an Australian Business Number (ABN), gig work and some investment income can all count towards your total taxable income.

If you have more than one payer or employer at a time, you can generally only claim the tax-free threshold from one payer. Usually, this is the payer who pays you the highest salary or wage. If you’re certain your total combined income from all sources will be $18,200 or less, you can choose to claim the tax-free threshold from each payer.

A common mistake is claiming the tax-free threshold from every employer or payer. Each employer or payer then calculates your tax to be withheld on the basis that the tax-free threshold applies. At tax time, the ATO combines your income from all sources to work out how much tax you owe and if not enough tax has been withheld, you may receive a tax bill.

If you have more than one job and expect to earn more than $18,200 in total income, you should ask your other employers or payers to withhold tax at the higher “no tax-free threshold” rate.

If you drive for a ride-share platform, deliver food, earn gig economy income, rent out assets or run a side business, tax may not be automatically withheld from this income.

If you’re eligible, voluntary pay as you go (PAYG) instalments or tax prepayments can help you prepay your tax in manageable chunks throughout the year. This can also help you manage cash flow for extra tax liabilities like the Medicare levy or compulsory study loan repayments. If PAYG instalments are not available or suitable for you, set aside a portion of your income in advance to help meet your liabilities.

If you have a study or training support loan (e.g. HECS/HELP), take extra care. Your compulsory repayments are based on your total repayment income, not just your main wage. Earning income from additional jobs, self-employment, side hustles or investments can increase your repayment. Tell each employer or payer about your loan so they withhold the right amounts.

What to check with your employer and payslips as payday super begins

Payday super is now law and, from 1 July 2026, employers must pay super at the same time as wages. Contributions your employer makes will generally need to reach your fund within seven business days of each payday.

Payday super doesn’t change how often you’re paid wages. Payday frequency is still set by employment contracts, awards or enterprise agreements. What changes is when your super must be paid. If you’re paid weekly, super is paid weekly. If you’re paid fortnightly, super is paid fortnightly.

In the lead-up to payday super, your employer may ask you to confirm your super fund details. This gives them a chance to update their records and reduces the risk of contributions being sent to the wrong place once the new rules begin. If you’ve changed super funds recently, or are thinking about it, now’s the time to make sure your employer has the correct fund details on file.

The first time you’re paid after 1 July 2026, you should see super listed on your payslip alongside your wages. Shortly after, check your super fund account to confirm the contribution has been received and allocated.

Employers generally need pay contributions in time for them to be received by your fund within seven business days of payday. However, funds may have their own processing time before amounts appear in your member account.

A few simple habits will help you stay across your entitlements:

check that each payslip shows a super amount;
log in to your super fund and confirm contributions are arriving regularly;
compare the amount received against the amount shown on your payslip; and
watch for any unexplained gaps between pay cycles.

If you decide to change super funds, tell your employer promptly. A delay in passing on new fund details could lead to a contribution being missed, delayed or sent to an old account by mistake.

If super isn’t showing on your payslip, or hasn’t landed in your fund, start by speaking with your employer. Useful questions include:

which fund the contribution was sent to;
what date the payment was made; and
whether any error messages came back from the fund.

If you don’t get a clear answer, or the issue isn’t resolved, you can raise it with the ATO. Under payday super, the ATO will have earlier visibility of unpaid or late super, so issues can be identified and corrected sooner.

Fixing rejected payday super contributions from 1 July 2026

From 1 July 2026, when you’re required to pay your employees’ superannuation will change. Under the new payday super rules, super guarantee (SG) contributions must reach your employees’ funds within seven business days of each payday. With this much tighter window, knowing how to spot and fix a rejected contribution quickly is essential to avoid penalties.

The key change is speed. If a super fund rejects your contribution through SuperStream, it will generally need to allocate or return the payment within three business days. A rejection doesn’t by itself satisfy the seven-business-day receipt requirement; you need to resolve issues and resubmit in time for the fund to receive the contribution by the original due date, unless an extended timeframe applies.

Most rejections come down to data quality. The ATO and SuperStream identify incorrect fund details, unique superannuation identifiers (USIs), member numbers or tax file numbers (TFNs) as frequent culprits. Where SuperStream’s used (as is generally required for employer contributions), your clearing house or digital service provider should provide clearer error messaging from 1 July 2026 under the SuperStream v3 upgrade.

If a contribution bounces back, you should:

check the error message from your clearing house or digital service provider straight away;
review and correct employee data such as TFNs, names and fund details;
use a member verification request (MVR) to confirm fund details before resubmitting;
resubmit the contribution within the original seven business day window; and
if the stapled fund rejects the payment, follow ATO choice-of-fund rules and pay to an eligible alternative fund.

Extended 20-business-day timeframes apply in some specific circumstances, such as where you’re changing the fund you contribute to for an employee.

If the seven-business day window closes before the contribution lands, the super guarantee charge (SGC) begins to apply. The SGC now includes the shortfall, daily compounding notional earnings, and an administrative uplift amount of up to 60% (subject to reductions for voluntary disclosure). The good news is the SGC is tax deductible from 1 July 2026 (although penalty and ATO general interest charges on unpaid amounts remain non-deductible).

You should still pay the late contribution directly to the employee’s super fund before the ATO issues an assessment, as this can reduce (but not eliminate) the SGC.

The ATO’s signalled a risk-based, facilitative approach during 2026–2027 for employers making genuine efforts to comply. Occasional late payments arising from rejected funds or incorrect details, where promptly fixed, are likely to be treated as low risk under this approach. Deliberate or serious non-compliance, however, will attract firmer action.

Explanatory Memorandum

Client – JUNE 2026

Newsletter

Newslettter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 25 May 2026.

Budget offers personal tax relief but leaves super largely untouched – The Federal Budget’s headline personal tax-related measures will reshape financial planning strategies from 2027.

Business tax relief package announced for immediate support – The Federal Budget announcements include a comprehensive business tax relief package designed to support companies through economic uncertainty while encouraging investment and innovation.

What’s the difference between tax deductions and tax offsets? – While both can reduce how much tax you pay, they work in quite different ways, and understanding this can help you make better decisions about your tax planning.

Navigating financial advice in the social media age – ASIC has long had concerns about unlawful financial promotion on social media platforms for several years, and recently issued warning notices to four social media influencers suspected of providing unlicensed financial advice, including making claims about guaranteed returns.

Why your super insurance might not cover what you expect – Almost 10 million super accounts have insurance attached to them, but many members can’t say what they’re covered for, how much it costs or whether it actually suits their needs.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following day:

Monday 8^th June – Public Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Budget offers personal tax relief but super largely untouched

The 2026–2027 Federal Budget’s headline personal tax measures will reshape financial planning strategies from 2027. A new $250 working Australians tax offset (WATO) will apply from 1 July 2027, effectively increasing the tax-free threshold for work income to $19,985. Combined with the previously announced $1,000 standard deduction for work-related expenses, workers could see substantial tax savings. The government confirmed existing modest tax rate reductions will proceed, with the 16% rate dropping to 15% in 2026–2027 and 14% in 2027–2028 for income between $18,201 and $45,000.

From 1 July 2027, the 50% capital gains tax discount will be replaced with inflation-adjusted indexation, accompanied by a minimum 30% tax rate on realised gains. This affects all assets held by individuals, trusts and partnerships for more than 12 months, including pre-1985 assets. The changes include transitional arrangements so only gains arising after 1 July 2027 face the new rules.

Complying super funds, including SMSFs, will continue receiving their existing one-third capital gains tax discount, so super funds will maintain their 10% effective tax rate on capital gains for assets held longer than 12 months. This makes superannuation even more attractive relative to personal investments, particularly given the new minimum 30% tax rate applying outside super.

From 1 July 2028, discretionary trusts will face a minimum 30% tax rate on taxable income. Beneficiaries will receive non-refundable credits for tax paid by trustees, but this could result in higher effective tax rates for lower-income beneficiaries who would normally pay less than 30%. The government will provide expanded rollover relief for three years from 1 July 2027.

Investment property strategies will change from 1 July 2027, with negative gearing limited to newly constructed dwellings. Losses from established residential properties will only be deductible against rental income or capital gains from residential properties. Properties owned at Budget time remain exempt until sold.

Business tax relief package for immediate support

The Federal Budget announcements include a comprehensive business tax relief package designed to support companies and encourage investment and innovation.

Small businesses can breathe easier with the permanent extension of the $20,000 instant asset write-off for businesses with turnover up to $10 million. This measure was set to revert to $1,000 on 30 June 2026 but now provides ongoing certainty for equipment purchases and business expansion plans.

Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool, with deductions of 15% in the first year and 30% thereafter. The provisions preventing businesses from re-entering the simplified depreciation regime for five years after opting out remain suspended until 30 June 2027.

From 1 July 2026, companies with aggregated annual global turnover below $1 billion will again be able to carry back tax losses and offset them against tax paid up to two years earlier. This applies to revenue losses only and remains limited by a company’s franking account balance.

The Budget confirmed the proposed changes to the FBT exemption for electric vehicles (EVs). The changes will be phased in over the next three years until a permanent 25% discount is operating from 1 April 2029 for all eligible EVs. There will be no changes in the current FBT year. Further, for EVs costing less than $75,000, there will be no changes until 1 April 2029.

The Research and Development Tax Incentive faces major reforms from 1 July 2028. Core research and development offset rates will increase by 4.5 percentage points, while the intensity threshold drops from 2% to 1.5%.

The turnover threshold for the highest offset rate increases from $20 million to $50 million, and the maximum expenditure threshold rises from $150 million to $200 million. However, supporting research and development expenditure will lose eligibility, and the minimum expenditure threshold increases from $20,000 to $50,000.

From 1 July 2027, small and medium businesses can opt into monthly PAYG instalment reporting and payments. This system will use ATO-approved calculations embedded in accounting software to better reflect real-time business activity.

What’s the difference between tax deductions and tax offsets?

With the 2026–2027 Federal Budget announcing a new $1,000 standard work-related expenses deduction and a $250 working Australians tax offset (WATO) for future financial years, you might be wondering about the difference between these two types of tax benefits. Both deductions and offsets can reduce how much tax you pay, but they work in quite different ways. Tax deductions reduce your taxable income before your tax is calculated. Common deductions you might already claim include:

work-related expenses like uniforms or tools;
gifts and donations to registered charities;
investment property expenses; and
costs of managing your tax affairs, such as tax agent fees.

For example, if you earn $60,000 and claim $2,000 in work-related deductions, your taxable income becomes $58,000. You then pay tax on this reduced amount.

The value of a deduction depends on your marginal tax rate. For example, a $1,000 deduction may save a resident taxpayer around $300 if their marginal tax rate is 30%, or $160 if their marginal tax rate is 16%, ignoring Medicare levy and other factors.

Tax offsets work differently: they directly reduce the actual tax you owe, dollar for dollar. They’re applied after your tax has been calculated on your taxable income. You might already receive offsets such as the:

low-income tax offset (LITO) of up to $700 for those with taxable income under $66,667;
seniors and pensioners tax offset (SAPTO) for eligible pensioners;
private health insurance rebate (a rebate is the same as an offset); or
spouse superannuation contribution offset.

So, if you have taxable income of $30,000 and owe $1,888 in tax, then receive a $700 LITO, your final tax bill becomes $1,188.

Understanding this distinction can help you prioritise your tax planning strategies. A $1,000 offset is always worth exactly $1,000 off your tax bill (if you have at least $1,000 of income to absorb it). A $1,000 deduction might save you anywhere from $160 to $450 in income tax, depending on your tax bracket.

This is why the government’s Budget announcement of both types of measure is significant.

There’s another important point to note: most tax offsets can only reduce your tax to zero, not below. If you don’t owe any tax, you typically won’t receive the offset as a cash payment. However, some offsets like the private health insurance rebate are refundable.

Planning ahead

While the newly announced measures won’t apply to 2025–2026 tax returns, it’s worth reviewing your current deductions and offsets. Are you claiming all the deductions you’re entitled to? Are you receiving all available offsets? The ATO automatically calculates some offsets like LITO when you lodge, but others need to be claimed in the offsets section of your tax return.

Navigating financial advice in the social media age

Social media has transformed how we access information, including financial guidance. With the Australian Securities and Investments Commission (ASIC) recently taking regulatory action to warn “finfluencers” against acting illegally, it’s worth understanding how to evaluate the financial content you encounter online, so you can protect yourself against acting on unlicensed advice that could risk your money.

Research shows 63% of Gen Z Australians use social media for financial information, with over half expressing trust in content from financial influencers. In April, ASIC issued warning notices to four social media influencers suspected of providing unlicensed financial advice, including making claims about guaranteed returns.

Understanding the difference between general information and personal advice helps you evaluate online content appropriately. Licensed financial advisers can provide recommendations tailored to your specific circumstances, goals and risk tolerance. They’re required to act in your best interests and maintain professional standards.

Social media content creators can share factual information about financial products and general educational content. They can’t legally provide specific recommendations about what you should buy, sell or invest in unless they hold appropriate licences or operate under the supervision of a licensed entity.

Certain content characteristics should prompt you to stop and evaluate carefully, including:

promises of guaranteed returns for your money, or risk-free investments;
pressure to act quickly on investment opportunities;
claims about easy money or get-rich-quick schemes;
specific product recommendations given without understanding your circumstances; and
content that downplays or ignores investment risks.

Legitimate investments carry risk, and higher potential returns typically involve higher risk levels. Anyone promising otherwise may be providing misleading information.

Social media algorithms prioritise content engagement over accuracy. Content designed to generate views, comments and active sharing may not represent balanced or comprehensive financial guidance. Sensational claims often perform better algorithmically than measured, educational content, so the financial content you see may be skewed toward attention-grabbing rather than genuinely helpful information.

Financial strategies can’t be one-size-fits-all. Your age, income, family situation, risk tolerance, existing assets and future goals all influence what approaches might work for your circumstances. What works brilliantly for one person could be entirely inappropriate for another.

Before acting on financial guidance from any source, verify the person’s qualifications and licensing status using ASIC’s professional registers. Licensed professionals are subject to ongoing education requirements, professional standards and regulatory oversight. They have professional indemnity insurance and must operate within established complaint resolution frameworks.

Why your super insurance might not cover what you expect

If you have a superannuation account, there’s a reasonable chance you also hold life insurance through it, possibly without realising. Almost 10 million super accounts have insurance attached to them, but many people can’t say what they’re covered for, how much it costs or whether it suits their needs. Before assuming your default cover has you sorted, it’s worth unpacking some common misconceptions.

“Everyone gets cover automatically”

Insurance through super doesn’t start automatically if you’re a new member aged under 25 or your balance is under $6,000, unless you contact your fund and ask for it, or you work in a dangerous job where your fund gives you automatic cover. If you’re younger or just starting out, you may have no safety net at all unless you opt in.

“Default cover will be enough”

Default cover is a starting point, not a tailored solution. Default cover may be lower than, or different from, cover available outside super; eligibility rules and exclusions can apply; and cover can stop if your account becomes inactive, your balance is too low, you change funds (unless arrangements are made to transfer or replace it) or you reach an age limit.

When reviewing your insurance, check whether there are exclusions or whether you’re paying a loading – this is a percentage increase on the standard premium, charged to higher-risk people who have high-risk jobs, pre-existing medical conditions, or classified as smokers. If your fund has classified you incorrectly, you may be paying more than necessary.

“My cover follows me when I switch funds”

Often, cover won’t follow you. If you switch superannuation funds, your insurance policy may not be portable, meaning the cover you had can lapse once you’re no longer a member. Some funds allow you to transfer your policy to personal ownership, but this may require health checks and the insurer could charge more to continue the cover. Consolidating accounts can also unintentionally cancel valuable cover, so always check before you act.

“If I stop contributing, nothing changes”

Cover can change if your account isn’t active. By law, super funds cancel insurance on accounts with no contributions for at least 16 months. Some funds have their own rules and cancel insurance if your balance is too low. Your fund will typically attempt to notify you before changes happen, so it’s important to keep your contact details updated.

“More accounts means more protection”

Holding multiple super accounts may simply mean multiple premiums quietly draining your retirement savings. If you have more than one super account, you may be paying premiums on more than one insurance policy, which reduces your retirement savings. Claim outcomes can vary between policies, and benefits aren’t always cumulative. Consider whether you need more than one policy, or whether you can get cover through one fund.

“It’s always the cheapest option”

Premiums may be lower because super funds buy cover in bulk, but that doesn’t always translate to the best value. Cover may not be enough, or may change over time, and it also may not be cheaper than insurance you can buy elsewhere.

Where to from here?

Superannuation and insurance can be complex. Before you assume your default cover’s doing the job, speak with your professional adviser to review your policy, premiums and any gaps, so you know exactly what you’re paying for and whether it still fits your circumstances.

Explanatory Memorandum

Client – May 2026

Newsletter

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 27 April 2026.

Will the proposed $1,000 instant tax deduction benefit you? – The Federal Government has released draft legislation for a new standard tax deduction that would allow claiming work-related expenses at tax time without receipts.
ASIC launches new range of tools and resources for retirement planning – ASIC commissioned research that surveyed 2,065 Australians to understand retirement planning and readiness gaps, and has developed new resources in response to the results.
Young adult workers win equal pay rights – The Fair Work Commission has delivered a landmark decision that will significantly impact junior wage rates across three major industries, with changes set to begin in December 2026.
Payday super changeover requires careful cash flow planning – The transition to payday super is just months away, and employers need to prepare for a complex changeover period that could significantly impact cash flow during July 2026.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following day:

Friday 22^nd May – Jewish Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Will the proposed $1,000 instant tax deduction benefit you?

The Federal Government has released draft legislation for a new “instant” standard tax deduction that would allow eligible taxpayers to claim work-related expenses at tax time without receipts. This would replace the current $300 no-receipt immediate deduction limit.

However, this is still just a proposal. The draft legislation’s been released for comment, so isn’t before Parliament yet. If passed in its current form, the changes would apply from the 2026–2027 financial year. This means it won’t help with your 2025–2026 return, but could be available next year.

It’s important to understand that a tax deduction doesn’t simply put a cash amount back in your pocket. Instead, deducting it offsets the tax you pay, so the actual benefit depends on your tax rate. For someone on the 32.5% tax rate, a $1,000 deduction would reduce their tax by about $325. Higher income earners could save up to $450 (or $470 including Medicare levy).

The government estimates about 6.2 million taxpayers could benefit, with average savings of around $205.

Here’s a key point, though: if you already claim more than $1,000 in work-related expenses, you may be better off sticking with keeping receipts and claiming your actual expenses. The ATO says the average Australian claims $2,739 in work-related expenses, and the median claim is $1,338. This means many taxpayers already claim more than the proposed $1,000 and wouldn’t financially benefit from the change.

However, people whose claims are usually close to $1,000 or who like the idea of a predictable deduction may find it saves some record-keeping effort.

The standard deduction would cover typical work expenses like:

home office costs;
work clothing and uniforms;
tools and equipment;
car expenses for work travel; and
stationery and work supplies.

Certain deductions would be claimable on top of the $1,000, including charitable donations, union fees, income protection insurance, and investment-related expenses.

From 2026–2027, you also wouldn’t be able to add new work equipment costing between $300 and $1,000 to a “low-value pool” for depreciation purposes. This could slow down tax deductions for items like computers or tools, reducing the benefit you receive in earlier years.

What should you do?

First, remember this is still just a proposed change to the law. Second, consider whether you typically claim more or less than $1,000 in work-related expenses. If you claim more, the change likely won’t help you.

However, changes like this can have unexpected consequences, so third, consider seeking professional advice at tax time. If you want to optimise your deduction strategy, contact our office to discuss your circumstances and ensure you’re maximising your legitimate tax benefits.

ASIC launches new range of tools and resources for retirement planning

National research carried out by the Australian Securities and Investments Commission (ASIC) has shown that many pre-retirees are worried that they won’t have enough money in retirement, report low financial literacy and have low confidence in managing their retirement finances.

ASIC commissioned research that surveyed 2,065 Australians aged 45–75 to understand retirement planning and any readiness gaps. Focusing on the 50–66 age group, covering a range of retirement stages including respondents with retirement over 10 years away, nearing retirement (within nine years), and fully retired, the research showed that 48% of respondents were worried they’d run out of money in retirement; 32% felt they were already behind in retirement planning; and only 18% had a clear retirement plan in place.

Only a third of the pre-retirees in the age group felt confident that they would be financially comfortable in retirement, with female pre-retirees and renters in particular reporting low confidence in their ability to manage their finances or live comfortably in retirement.

Financial literacy and low confidence in managing retirement income was also a concern for 46% of the age group. Nearly 60% reported that they wanted to learn more about super and retirement.

In response, ASIC has developed practical tools, calculators and guidance to support financial literacy and retirement planning in a new Retirement Hub on Moneysmart. The launch offers a great opportunity to review your understanding before seeking advice about what will suit your circumstances.

The resources are available in segments reflecting the key questions uncovered in the research:

How much will I need? – covers retirement costs, retiring with debt, planning retirement goals and lifestyle and working out your living expenses.
How can I make my money last? – budgeting, understanding different sources of income (eg super, Age Pension, account-based pensions or annuities), government benefits and how to decide what to do with your super.
How do I stay on track? – how to check and keep track of your super and insurance, tackle debt, and stay aware of scams.

An upgraded Retirement Planner is designed to walk you through where your super is at, project how much income you could have in retirement, work out how much you’ll need based on your goals or lifestyle choices, and allow you to review your options and test different scenarios to assess if you’re on track to reach your financial goals.

Young adult workers win equal pay rights

The Fair Work Commission has delivered a landmark decision that will significantly impact junior wage rates across three major industries, with changes set to begin in December 2026.

On 31 March 2026, a Full Bench of the Fair Work Commission handed down its decision in response to an application by the Shop, Distributive and Allied Employees’ Association. The decision affects junior employees under the General Retail Industry Award 2020, Fast Food Industry Award 2020 and Pharmacy Industry Award 2020.

The key change is that junior employees aged 18 and over who have been employed by their current employer for more than six months will eventually receive the full adult minimum wage rate. This represents a significant departure from the current system, where these employees receive between 70% and 90% of the adult rate depending on their age.

The changes will apply to employees in general retail, fast food and community pharmacy industries. However, the decision creates different outcomes for different age groups:

employees aged under 18 will see no changes to their current rates;
employees aged 18–20 with less than six months’ experience with their current employer will continue to receive their current percentage rates; and
employees aged 18–20 with more than six months’ experience will gradually move to full adult rates through a phased implementation.

The provisional implementation schedule begins 1 December 2026, phasing the changes in across two and a half years:

18-year-olds will move from 70% to full adult rates by July 2029;
19-year-olds will reach full adult rates by July 2028; and
20-year-olds will achieve full adult rates by July 2027.

The rates will increase incrementally every six months during this transition period.

The Commission considered extensive evidence from 87 witnesses, including witnesses who shared their workplace experiences and expert economists who analysed potential impacts. The Commission found that for adult junior employees, the variation was justified for work value reasons, considering the nature of work, skills, responsibility and working conditions.

Fairness to junior employees weighed heavily in the decision. The Commission took into account factors such as the value of junior employees’ work and young people’s labour market disadvantage. However, it also considered fairness to employers and likely business impacts.

Importantly, the Commission maintained current rates for employees under 18, recognising factors such as employment restrictions, availability constraints, and differences in maturity and work experience.

This decision will have significant cost implications for businesses in the affected industries. The phased implementation provides time to adjust business models and budgets, but employers should begin planning now for the increased wage costs.

The Commission will issue further directions soon, providing additional opportunities for parties to be heard regarding the implementation details.

Next steps

If your business employs junior staff in retail, fast food or pharmacy industries, this decision will likely affect your wage costs and workforce planning. The complexity of the new age- and experience-based criteria means careful attention to payroll systems and employee records will be essential. Given the significant financial implications and implementation complexities, consider seeking our advice to understand how these changes will specifically impact your business and ensure your compliance with the new requirements.

Payday super changeover requires careful cash flow planning

The transition to payday super is just months away, and employers need to prepare for a complex changeover period that could significantly impact cash flow during July 2026.

From 1 July 2026, employers must pay superannuation guarantee each payday instead of quarterly. Super payments must reach employees’ funds within seven business days after payday, marking the end of the current quarterly system that’s operated for decades.

July 2026 presents unique cash flow pressures as employers navigate dual payment obligations. You’ll need to make your final quarterly payment for the April to June period by 28 July, while simultaneously beginning payday super payments for July pay runs.

The timing is important. Super payments for July paydays may be due before the final quarterly payment deadline of 28 July.

Any contributions received on or before 28 July will first reduce amounts owing for the June quarter, with remainders then applied under payday super rules.

The final quarterly payment for the June quarter must reach employees’ super accounts by 28 July 2026. Missing this deadline triggers super guarantee charge obligations, with statements due by 28 August. Importantly, the late payment offset won’t be available for this final quarterly payment. For tax deductibility, any superannuation guarantee contributions must be received by the fund by 30 June 2026 if you want them to be tax deductible in the 2025–

Explanatory Memorandum

Client – March 2026

Newsletter

NEWSLETTER

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 23 February 2026.

Investment properties: tax return errors that trigger ATO follow-up – Each year the ATO uses third-party data and targeted reviews to identify common mistakes made by landlords.

Is your business misreporting FBT on work vehicles? – If your business provides work vehicles to your employees, the ATO wants to ensure you’re meeting your fringe benefits tax obligations.

Time’s running out for small business super clearing house users – The SBSCH closure is part of the government’s payday super reforms, which aim to modernise how employers pay superannuation.

Superannuation changes proposed for high balances and low-income earners – The government has introduced a Bill proposing changes to the super system that could reshape retirement savings for millions of Australians.

Choosing the right trustee structure for your SMSF – When setting up your self managed super fund, one of the most important decisions you’ll make is choosing your trustee structure..

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

————
Office Hours

Our office will be closed from 5pm Wednesday, 1st of April 2026 and will re-open at 9.00am on Friday, 10th April 2026.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

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Investment properties: tax return errors that trigger ATO follow-up

Owning an investment property can be tax-effective, but it’s also one of the ATO’s most closely monitored areas. Here are five errors that most often trigger ATO follow-up, and the related issues to keep in mind.

Over-claiming repairs that should be capital works

Repairs and maintenance can be claimed for work that remedies or prevents defects, damage or deterioration arising from using the property to earn income. These expenses are generally deductible in the year they are incurred. By contrast, capital works are structural improvements, alterations or extensions that go beyond merely fixing wear and tear. If the work improves the function or value of the property, it’s likely to be capital in nature. Capital works are usually claimed at 2.5% over 40 years (subject to specific exceptions).

Claiming incorrect interest deductions

If a loan’s used for both private purposes and rental property expenses, the interest must be apportioned. You can only claim the portion that relates to the rental property. This applies whether the mixed use occurs when the loan is first taken out, or arises later through refinancing or redraws. Apportioning of interest must continue over the life of the loan, and interest on amounts used for private purposes is never deductible.

Claiming deductions during private use periods

You can’t claim deductions for interest or other expenses for periods when a holiday home or mixed-use property is used privately, even if the private use is brief. To legitimately claim deductions, the property must be rented or genuinely available for rent. A property may not be considered genuinely available if it’s advertised only through limited channels, offered only during periods of very low demand, or subject to unreasonable conditions such as above-market rent or overly restrictive tenant requirements.

Repeatedly refusing suitable tenants without valid reasons can also indicate the property is being held for personal use rather than income producing purposes.

Poor record keeping and lack of substantiation

You must keep records of your rental income and expenses for at least five years from the date you lodge your tax return. If a dispute with the ATO arises during that period, you must retain relevant records until the dispute is resolved.

Not reporting all rental-related income

Rental-related income includes more than just rent. It can also include bond money retained for unpaid rent or damage, letting or booking fees from cancelled reservations, and insurance payouts, whether for property damage or loss of rent. Disaster relief payments received in relation to a rental property may also be assessable. The ATO now cross-checks data from banks, state land registries, insurers, rental bond authorities and digital platforms, making errors easier to detect than ever.

Is your business misreporting FBT on work vehicles?

If your business provides work vehicles to your employees, the ATO wants to ensure you’re meeting your fringe benefits tax obligations.The ATO has identified that many businesses are failing to meet their FBT obligations when providing work vehicles for private use.

This isn’t just about paperwork. Failing to report, or incorrectly reporting, fringe benefits undermines fairness for employers and can create compliance issues for employees. Getting it right ensures a level playing field and helps your employees meet their tax obligations.

The ATO has identified several practices that can lead to audits, penalties and interest charges:

failing to lodge an FBT return when required;
assuming private use of a dual cab ute is automatically exempt;
incorrectly claiming vehicle exemptions;
avoiding apportioning private and business use; and
not keeping adequate records, such as valid logbooks.

These mistakes can also damage your business reputation, making it crucial to stay on top of your obligations.

If you make a vehicle available to your employees, or their family members or associates, for private use, it may be subject to FBT. This means you may need to lodge an FBT return and pay FBT.

The key is understanding when a work vehicle becomes a fringe benefit. Simply providing a vehicle for work purposes doesn’t automatically trigger FBT, but allowing private use generally does.

The ATO uses sophisticated data and analytics to identify businesses that aren’t meeting their obligations. Their compliance teams are actively contacting employers who fail to comply or deliberately avoid FBT.

Time’s running out for small business super clearing house users

If you’re one of the thousands of small businesses using the Small Business Superannuation Clearing House (SBSCH), you need to act now. The service will permanently close on 1 July 2026. From that date, the SBSCH will no longer process payments or allow access to historical records. The closure is part of the government’s payday super reforms, which aim to modernise how employers pay superannuation.

The ATO recommends making the January to March 2026 quarter your last quarter using the SBSCH, giving you a buffer to establish your new process.

Your immediate priorities should be:

Choosing your alternative payment method: Check if your existing payroll software already includes super payment functions. Many modern payroll systems offer integrated superannuation payments that meet SuperStream requirements. Alternatively, you can use commercial clearing houses or online payment services offered by some large super funds.
Downloading your records before 1 July 2026: This is crucial, because once the service closes, your transaction history and employee details will be permanently inaccessible. You’ll need these records for future audits and employee queries.
Switching early to avoid problems: By transitioning before the deadline, you’ll have an established process in place and reduce the risk of late payments for the April to June 2026 quarter.

The ATO’s SuperStream Product register lists certified payroll software and service providers that can handle your super payments. Many offer additional features like automated calculations, compliance reporting and integration with your existing accounting systems. Large super funds also often provide online payment portals, and commercial clearing houses offer similar services to the SBSCH but with enhanced features and ongoing support.

Choosing the right super payment solution depends on your business size, payroll complexity and existing systems. The transition also presents an opportunity to review your entire payroll and super compliance processes.

Superannuation changes proposed for high balances and low-income earners

The government has introduced legislation that proposes significant changes to Australia’s superannuation system that could reshape retirement savings for millions of Australians. It targets both ends of the income spectrum, applying higher tax for those with very large super balances while boosting support for low-income earners.

The Bill proposes a tiered Division 296 tax system for superannuation earnings on balances exceeding $3 million, commencing 1 July 2026:

the current 15% tax rate would remain for earnings on balances up to $3 million;
earnings on the super portion between $3 million and $10 million would be taxed at an effective 30% rate; and
earnings on amounts above $10 million would face a 40% effective tax rate.

These thresholds will be indexed to keep pace with inflation. The new tax would apply only to future realised earnings, not unrealised capital gains on unsold assets.

This change would affect fewer than 0.5% of current superannuation members – approximately 80,000 Australians with extremely large super balances. For the vast majority, superannuation tax arrangements would remain unchanged.

The low-income superannuation tax offset (LISTO) is proposed to receive a significant boost from 1 July 2027: the eligibility threshold would increase from $37,000 to $45,000; the maximum payment would rise from $500 to $810; and automatic indexation would tie future adjustments to tax thresholds and superannuation guarantee rates.

The government says these changes will benefit over 1.3 million Australians, with around 60% being women. Treasury estimates eligible workers could see an average retirement benefit equivalent to an extra $15,000.

If you have a large superannuation balance, the changes could significantly impact your retirement planning strategy. The proposed tax increases represent a substantial shift in how high-balance superannuation is treated.

For low-income earners, the enhanced LISTO could provide meaningful support. The higher threshold would mean more workers qualify for the offset, while the increased payment amount means better tax outcomes on superannuation contributions.

Remember, this is proposed legislation that must pass Parliament before becoming law. The Bill may be amended during the parliamentary process, and implementation details are still being finalised.

Choosing the right trustee structure for your SMSF

Setting up a self-managed super fund (SMSF) is an exciting step towards taking control of your retirement savings, but one of the most important decisions you’ll make is choosing your trustee structure. This choice will affect how your fund operates and your ongoing compliance obligations.

You have two main trustee structure options for your SMSF:

individual trustees – where each member of the fund acts as a trustee; or
corporate trustee – where a company acts as the trustee of the fund.

With individual trustees, each member of your SMSF must be a trustee. This means if you have a two-member fund, both members must be trustees.

The main advantages of individual trustees include:

lower setup costs as you don’t need to establish a company;
simpler initial structure; and
no annual fees to pay to the Australian Securities and Investments Commission (ASIC) for maintaining a company.

However, there are some drawbacks:

all trustees must sign fund documents, which can be cumbersome;
any penalties for legal or regulatory breaches are imposed on each individual trustee (costing more in fines); if a trustee dies, assets may need to be transferred; and
changes to membership require updating legal documents.

A corporate trustee structure uses a company as the trustee of your SMSF. The members of the fund become directors of the company, giving them control over fund decisions.

The benefits of a corporate trustee include:

continuity – the company continues even if directors change;
easier administration when members join or leave;
assets are held in the company name, reducing paperwork when membership changes;
any penalties for legal or regulatory breaches constitute a single fine (where directors share the cost); and
only one signature may be required for fund documents (depending on the company’s constitution).

The main disadvantages are:

higher setup costs to establish the company;
annual ASIC fees; and
additional compliance obligations for the company.

The right choice depends on your circumstances. Consider factors such as:

the number of members in your fund;
whether you expect membership to change over time;
your tolerance for ongoing costs versus convenience;
the value of assets you plan to hold in the SMSF; and
your long-term plans for the fund.

For funds with multiple members or those planning to hold significant property investments, a corporate trustee often provides greater flexibility and easier administration over time. Single-member funds may find individual trustees simpler initially, though the benefits of corporate trustees often outweigh the costs as the fund grows.

Remember that changing trustee structures later can be complex and costly. You may need to transfer assets and update legal documents. Choosing your SMSF trustee structure is a crucial decision that will impact your fund’s operation for years to come. The choice between individual and corporate trustees involves weighing up costs, convenience and your long-term plans.thout our prior approval.

Explanatory Memorandum

Client – February 2026

Newsletter

NEWSLETTER

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 27 January 2026.

Support for rebuilding after natural disasters – There’s help available if you’ve lost your home, property or business to a natural disaster.

Student loan debts: what you need to know about the latest changes – For the more than three million Australians with a student loan, there’s welcome news that could significantly lighten your financial load.

Beware of pump and dump investment schemes – If you’ve been active in the markets recently, particularly with small-cap stocks, you need to be aware of these increasingly clever scams that could cost you thousands.

Don’t miss out this year: GST credits, fuel tax credits and your BAS – As 2026 kicks off, it’s a good time to make sure your business isn’t missing out on valuable GST and fuel tax credits.

The ATO’s latest playbook for SMSF education directions – Running an SMSF means you’re responsible for following complex rules. Education directions are an increasingly important part of the ATO’s approach when things go wrong.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

Support for rebuilding after natural disasters

If you’ve lost your home, property or business to a natural disaster, knowing what to do next can be daunting. The good news is there’s help available to help you navigate the recovery process.

The Federal Government and state and territory governments work together to provide support where natural disasters have been declared. Visit the National Emergency Management Agency website for links to state or territory disaster recovery websites.

Disaster assistance payments may be available in officially declared disaster events. The Australian Government Disaster Recovery Payment (AGDRP) is a one-off non-means tested payment of $1,000 per eligible adult and $400 per child, while the Disaster Recovery Allowance (DRA) provides short-term income support for up to 13 weeks to eligible individuals.

Contact your insurance company as soon as you can, ideally within 24 hours. Most insurers have emergency hotlines and may offer emergency cash advances within days or temporary accommodation funds if your home is uninhabitable. If you’ve lost your policy documents, the Insurance Council of Australia can help you identify them.

Major Australian banks have hardship teams that can pause loan repayments, waive fees or temporarily extend credit. Don’t wait until you’ve missed a payment – early communication protects your credit rating and opens doors to assistance.

Don’t fall prey to disaster chasers

“Disaster chasers” are individuals or companies who target areas hit by natural disasters. They typically approach through unsolicited door knocks, phone calls, text messages, letterbox drops or targeted online advertisements, claiming to offer quicker, cheaper or specialised repair services. While some offers may be legitimate, be wary of anyone who offers “today-only” deals, demands money upfront or immediate contract signing, asks you to sign anything that prevents direct communication with your insurer, or claims to be from your insurance company without prior notification.

Beware of donation scams

If you’re looking to help those affected, only make donations for disaster relief to reputable charities. For example, some state governments partner with organisations like GIVIT to support affected communities. Scammers often impersonate well-known charities through door-knocking or cold-calling and create fake websites and social media pages to deceive you in the wake of a disaster. You can verify a charity’s registration on the Australian Charities and Not-for-profits Commission website, and report suspected scams to Scamwatch.

Student loan debts: what you need to know about the latest changes

If you’re among the more than three million Australians with a student loan, there’s welcome news that could significantly lighten your financial load. The Australian Government’s legislation to reduce student loan debt by 20% is now being applied. The ATO applies the 20% reduction to your student debt balance as at 1 June 2025, before indexation was applied, with the 2025 indexation recalculated on the reduced debt amount.

You don’t need to take any action. Most people were due to receive their reduction before the end of 2025, and more complex reductions are being processed by the ATO in early 2026. The ATO will notify you via SMS, email or your myGov inbox when your reduction has been applied.

If your loan account’s in credit after the reduction is applied, you may receive a refund – although, if you have outstanding tax or other Commonwealth debts, the ATO will apply your credit to these debts first.

Changes to repayment thresholds

From 1 July 2025, the minimum repayment income needed to make a compulsory repayment has increased to $67,000 for the 2025–2026 income year. Compulsory repayments have also moved to a marginal repayment system, meaning they’re only calculated on the part of your income above $67,000 (instead of your total repayment income). This will reduce annual repayments for most people.

If your repayment income is $179,286 or more, your compulsory repayment will continue to be 10% of your total repayment income, meaning you won’t be worse off because of the shift to marginal rates.

These changes may have important tax implications for you. Speak with your professional tax adviser to understand the full impact on your financial position.

Beware of pump and dump investment schemes

Late 2025 saw a concerning surge in “pump and dump” schemes targeting Australian investors, with ASIC reporting a notable rise in complaints to the regulator. If you’ve been active in the markets recently, particularly with small-cap stocks, you need to be aware of these increasingly clever scams that could cost you thousands.

Pump and dump operators artificially inflate share prices through false rumours and misleading information, then sell their own holdings at the peak, leaving unsuspecting investors with worthless shares. These schemes specifically target small-cap securities with low liquidity because even minor announcements can dramatically impact their share prices.

Scammers typically identify thinly traded stocks, then flood social media platforms, online forums and messaging apps with false information designed to create excitement and urgency around the investment. They might use fake celebrity endorsements, paid advertisements that appear high in search results, or coordinate multiple “finfluencer” endorsements to create the illusion of genuine market buzz.

Warning signs to watch for

Several red flags should immediately raise your suspicions:

unsolicited marketing creating urgency around specific investments;
sudden rushes of commentary about little-known investments across multiple forums;
social media advertisements directing you to private chat groups;
fake celebrity endorsements or testimonials;
strange market behaviour, such as sudden price spikes in typically stable investments; and
claims of “inside information” or “guaranteed returns”.

Before making any investment decision, especially in small-cap stocks, take time to verify the information independently. Check the company’s official announcements, research its financial position and be particularly wary of investments promoted through social media or unsolicited communications.

If you suspect you’ve encountered a pump and dump scheme, report it immediately to Scamwatch, the ATO or ReportCyber. Quick reporting can help protect other investors and assist authorities in their investigations.

Don’t miss out this year: GST credits, fuel tax credits and your BAS

As 2026 kicks off, it’s a good time to make sure your business isn’t missing out on valuable GST and fuel tax credits.

GST credits

GST credits (input tax credits) are GST amounts you’ve paid on business purchases that you can get back, as long as you meet the requirements. If you buy something for your business and it includes GST, you can claim a credit on your BAS for that GST to reduce the amount owed to the ATO.

Only GST-registered businesses can claim GST credits, and you can only claim credits for goods or services used in running your business (not for personal expenses). The supplier must have charged you GST as part of the purchase price, and for purchases over $82.50 (including GST) you need a valid tax invoice.

Importantly, there’s a time limit for claiming GST credits. Credits expire four years after the BAS due date for the period when you first could’ve claimed them. After that you miss out, so remember to review older expenses within the four-year window.

Fuel tax credits

Fuel tax credits are another way to put money back into your business. When your business uses eligible fuel in certain vehicles, machinery or equipment for work, you can claim a credit on your BAS for the fuel tax (excise) already built into the fuel price.

You need to register for fuel tax credits (as well as registering for GST). Fuel tax credit rates are indexed twice a year, and different activities have different rates.

Not all fuel use is eligible, and vehicle and machinery types matter. For example, fuel used in passenger cars or light vehicles on public roads doesn’t qualify for credits, because the government already reduces that excise with a road-user charge.

Fuel tax credits also have a four-year time limit from the BAS due date for the period when you could first have claimed them.

Your tax agent can help you assess whether fuel used in your business equipment or heavy vehicles is eligible for fuel tax credits, what rates apply, and whether you should claim by correcting a past BAS or including missed credits in your next BAS.

Don’t wait until the last minute to sort out credits or lodge returns. Starting the year right will save you headaches later, and you can unlock some business cash flow in the process.

The ATO’s latest playbook for SMSF education directions

Running a self-managed superannuation fund (SMSF) gives you control over your retirement savings, but it also means you’re responsible for following complex rules. When things go wrong, education directions are becoming an increasingly important part of the ATO’s approach.

An education direction is essentially the ATO’s way of sending you “back to school” when you’ve broken superannuation rules. Instead of immediately hitting you with heavy penalties, the ATO can require you to complete an approved course about your trustee responsibilities.

The newly published Practice Statement PS LA 2026/1 clarifies when the ATO will use this tool.

You might receive an education direction if:

your SMSF has breached superannuation rules;
the ATO believes your lack of knowledge contributed to the mistake;
the breach wasn’t malicious or fraudulent; and
you haven’t received an education direction before.

Common contraventions that might trigger an education direction include making loans to members, accessing super early, exceeding investment limits or failing to separate your personal assets and fund assets.

If you receive an education direction, you must complete the specified course within the given timeframe, provide evidence of completion to the ATO and sign or re-sign your trustee declaration within 21 days. Failing to comply results in penalties of up to 10 penalty units (potentially thousands of dollars in fines) and could lead to more serious consequences like trustee disqualification.

The ATO won’t offer education directions in all situations. If you’re a repeat offender or an experienced professional who should know better, or if the breach is serious or deliberate, you’ll likely face harsher penalties instead.

Even if you weren’t directly involved in the breach, you can still receive an education direction if you were a trustee when it occurred. All SMSF trustees are jointly responsible for compliance.

If you’re running an SMSF, don’t wait for problems to arise. Take advantage of the ATO’s online education modules to understand your responsibilities; stay informed about rule changes; and maintain good records.

Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore, it should be regarded as confidential and not be made available to any person without our prior approval.

Explanatory Memorandum

Client – December 2025

Newsletter

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 24 November 2025.

Heading overseas? Centrelink and the ATO might need to know – Especially if you currently receive Centrelink or other government payments, a little prep will help you enjoy your overseas trip without payment surprises or tax headaches.

The ATO’s new draft rules could change your holiday home tax claims – Do you own a holiday home that you sometimes rent out? The ATO is targeting situations where properties are used mainly for personal holidays but owners still claim substantial tax deductions.

FBT and tax considerations for end-of-year parties and gifts in your business – The end-of-year season is a great time to celebrate with your employees and show appreciation for their hard work, but it’s essential to understand the tax implications of hosting work parties and giving gifts.

Payday superannuation is law: make sure you’re ready – From 1 July 2026, employers must pay their employees’ super contributions within seven business days of payday, replacing the quarterly system.

Super on government-funded paid parental leave: year-end planning – The government will start paying super from 1 July 2026 for people who take government-funded paid parental leave from 1 July 2025. Employers won’t fund or process these contributions, but they may still affect business planning.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

OFFICE HOURS

Our office will be closed from 5pm Tuesday 23^rd December 2025 and will re-open at 9.00am on Monday, 12^th January 2026.

Contacts for Partners: –

Andrew Goldberger Mobile No. 0419 155 373

Mory Kalkopf Mobile No. 0405 642 458

Abraham Paluch Mobile No. 0418 542 606

Boruch Baker Mobile No. 0418 333 922

Sebastien Lan Mobile No. 0405 559 230

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic, 3161

(03) 9509 7033

info@guests.com.au

KEYLINKS

Heading overseas? Centrelink and the ATO might need to know

If you’re planning an overseas holiday, especially if you currently receive Centrelink or other government payments, a little prep will help you enjoy your trip without payment surprises or tax headaches.

Different government payments have their own rules about whether, and for how long, they’re paid while you’re outside Australia. Short trips for most families are usually fine, but longer absences can reduce, pause or stop certain payments. You must also keep meeting the usual eligibility tests (residency, income and assets) while you’re away.

For instance:

Age Pension: There may be changes to your payment rate after six weeks and after 26 weeks abroad.
Disability Support Pension (DSP): You can receive DSP for up to 28 days in a 12-month period overseas. Extended stays may require special approval.
Family Tax Benefit: Payments usually stop after six weeks overseas.
JobSeeker and Youth Allowance: These typically stop as soon as you leave Australia, unless you have an approved reason. Youth Allowance or Austudy may continue if the time overseas is an approved part of your Australian course.

Tell Services Australia about your travel plans. Use myGov, the app, the relevant phone line or a service centre visit to share your dates, destination and reasons for travel.

Australia’s border movement data is shared with Services Australia, so unreported travel changes can trigger a review or overpayment.

When you get home, check that any paused payments restart and your rates look right.

The tax side is simpler. A short holiday doesn’t usually change your Australian tax residency, so nothing special happens to your tax just because you travelled. Centrelink payments are taxed the same way they are at home, and you’ll lodge your next tax return as usual. There’s no extra “travel tax”, and if a payment pauses while you’re overseas, you’ll just have less taxable income for that period.

Longer absences are different: if you’re going to be overseas for many months or moving, talk to us about residency, reporting arrangements and student loan obligations.

The ATO’s new draft rules could change your holiday home tax claims

Do you own a holiday home that you sometimes rent out? The ATO has just released draft guidance that could change how you claim your holiday home rental income and expenses. The updates specifically target situations where properties are used mainly for personal holidays, but owners still claim substantial tax deductions.

The tax law contains an “integrity rule” that stops you from deducting expenses for a property that’s essentially for your personal use. The new draft guidance clarifies how to work out if your property’s considered a holiday home under this rule, and how much you can legitimately claim.

The draft guidance also explains how you should declare rental income and claim deductions for rental properties, including holiday homes, addresses when a property is a “holiday home” for tax purposes and considers common scenarios like renting to family or friends at reduced rates. It outlines what the ATO considers fair and reasonable methods to split expenses between income-producing use and private use; for example, if your holiday homes rented out half the year and you use it for the other half, you can claim roughly 50% of general costs like interest, utilities and insurance as deductions.

Finally, the guidance introduces a traffic-light system of risk zones. “Amber” covers medium-risk scenarios where you rent the property but also use it personally for a significant part of the year. “Red” covers high-risk arrangements where the property’s mostly used by you or your family, with infrequent or non-commercial rentals. If you’re in the red, the ATO will suspect the property’s mainly a lifestyle asset rather than a genuine income-producing investment and will be more likely to investigate or challenge your claims.

While these rules are drafts right now, the ATO plans to apply them retrospectively once they’re finalised, with a transitional compliance approach for arrangements in place before 12 November 2025.

Take an honest look at your holiday home usage and review your past claims. Improve your record-keeping by maintaining a log of rental periods, vacant periods and personal use dates. We can help assess how the rules might affect your specific circumstances and ensure you’re maximising your legitimate deductions while staying compliant with the ATO’s expectations.

FBT and tax considerations for end-of-year parties and gifts in your business

As the end-of-year season approaches, it’s a great time to celebrate with your employees and show appreciation for their hard work throughout the year. However, it’s essential to understand the potential tax implications, particularly concerning fringe benefits tax (FBT), when planning holiday entertainment or gifts for employees.

Here are some key points to consider when planning a festive work gathering:

Location and attendees: If your party’s held on business premises during a working day and is only for current employees, you generally won’t have to pay FBT on food and drinks. If the event is off-site or includes employees’ associates, you might need to consider FBT, unless the cost per person is under $300 and deemed a minor benefit.
Entertainment and gifts: If you provide gifts alongside the party, remember that gifts under $300 per person can also qualify as minor benefits, exempting them from FBT. If gifts exceed this amount, FBT may apply.
Including your clients: Costs related to clients attending your event are not subject to FBT. This means you can invite clients without worrying about FBT implications for their expenses.

When it comes to calculating FBT on entertainment-related benefits, you have a few options:

Actual value method: This involves calculating the actual cost of the entertainment provided to employees and their associates. If non-employees are involved, you need to apportion the costs accordingly. For example, for a dinner where employees and clients are present, only the employee-related portion is considered for FBT.
50:50 split method: If you hire or lease entertainment facilities (like a function room), this method allows you to allocate 50% of the total entertainment leasing expenses to FBT, regardless of whether it’s for employees, clients or others. This can simplify calculations but might not always be the most cost-effective approach.

Meal entertainment valuation: If the entertainment involves meals without recreational activities, you can use meal entertainment valuation methods. Options include the 50:50 split or the 12-week method, where you track meal costs over a period and determine the taxable portion related to employees. Both of these are based on your expenditure on all meal entertainment for all people during the FBT year.

Important considerations

Recordkeeping: Maintain accurate records of all entertainment expenses, including costs (total and per-person), recipients and the calculation methods you’ve used. This documentation supports your FBT calculations and ensures compliance.
Tax deductions and GST credits: Generally, if your event’s exempt from FBT, you can’t claim income tax deductions or GST credits for the associated costs.
Gifts to clients: Gifts to clients aren’t typically subject to FBT. However, you may be able to claim a tax deduction for them, as long as they aren’t classified as entertainment.

Payday superannuation is law: make sure you’re ready

The “payday super” legislation, now passed by Parliament, significantly changes how superannuation will be paid. From 1 July 2026, employers must pay their employees’ super contributions within seven business days of payday, replacing the quarterly system.

Employers

Up to 30 June 2026, the existing super guarantee framework with quarterly due dates continues to apply. But from the first payday on or after 1 July 2026, each pay run carries a super obligation that must be met. Contributions will be considered “on time only” if the fund receives them within seven business days of the wage payment (an extended timeframe of 20 business days applies for some specific situations). Waiting until the end of the month or end of the quarter to “catch up” will no longer be within the law.

When errors occur, whether because of a missed pay cycle, incorrect fund details or a processing failure, the updated super guarantee charge rules will generally apply more quickly.

Small businesses using the Small Business Superannuation Clearing House will also need to choose and implement an alternative arrangement before that service closes altogether on 1 July 2026.

Otherwise, the super guarantee rate (12%) and many basic coverage rules aren’t changing. The real shift is timing and ATO enforcement.

As an employer, if you haven’t started reviewing your technology and processes in anticipation, now’s the time to start. Software providers, payment intermediaries and super funds will all face challenges.

A useful question is, “If you had to pay super every pay cycle tomorrow, could your current processes cope?” If the answer is no (or not without manual workarounds), there’s work to do. That may include confirming your payroll software calculates super correctly on each pay and whether it can generate SuperStream‑compliant payment files or connect directly to a clearing house and deciding when in the pay cycle super payments will be initiated.

Cash flow is another aspect to consider. Under payday super, many businesses will move from paying four large super instalments per year to paying many smaller instalments. Businesses with tight or seasonal cash flow may need to revisit their planning.

Employees

From 1 July 2026, employees should start seeing super contributions credited to their accounts after each pay rather than quarterly. Payslips will continue to show super guarantee amounts, and it will be easier for employees to compare payslip amounts with what appears in their super fund or myGov.

Employees will still need to keep their super fund details up to date with their employers, particularly when starting a new role, and periodically check their super statements. Beyond that, it will be up to employers to comply with payday super.

Super on government-funded paid parental leave: year-end planning

The Australian Government will begin paying superannuation contributions from 1 July 2026 for people who receive government-funded paid parental leave from 1 July 2025. This aims to improve retirement outcomes for parents, particularly women, who often experience reduced superannuation growth when they take time out of the workforce for parenting.

Paid parental leave super applies for parents of children born or adopted on or after 1 July 2025. The government contributes superannuation to the employee’s nominated fund at the superannuation guarantee rate of 12% (plus an interest component).

These super contributions aren’t paid at the same time as the paid parental leave income. The ATO will pay them after the end of the financial year when the parent received paid parental leave income. The first contributions are expected from July 2026, covering paid parental leave received during 2025–2026.

The contributions are taxed within the fund at 15% and count towards the individual’s concessional contributions cap, in the same way as employer superannuation guarantee contributions.

Employers aren’t required to fund or process these super contributions, but they may still affect financial and workforce planning.

Workforce costs and retention planning

Government-funded paid parental leave super doesn’t appear in your payroll costs, but some employers may choose to pay super on employer-funded parental leave or expand existing entitlements to stay competitive. These decisions can influence remuneration strategy and budgets for 2026–2027.

Attracting and retaining employees

Paid parental leave benefits – including how employers top up or complement the government scheme – are increasingly visible to job seekers and staff. As you review year-end HR reports, check whether your parental leave offering remains competitive and clearly communicated.

Staff planning and communication

Employees who’ve taken or planned paid parental leave during 2025–2026 may ask whether they’ll receive super, when it will be paid and how it interacts with their existing super and caps. Clear internal guidance helps managers and HR answer questions confidently and plan for staffing and backfill arrangements.

Compliance clarity

There’s potential for confusion between employer-funded super (currently paid at least quarterly and not compulsory on employer-funded parental leave) and government-funded paid parental leave super paid annually by the ATO. Ensuring your policies and communications clearly distinguish between these two streams can help reduce misunderstandings.

Explanatory Memorandum

Client – November 2025

Newsletter

NEWSLETTER

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 24 October 2025.

What’s the difference between the Medicare levy and the Medicare levy surcharge? – Many people getting their tax notice of assessment wonder why they see amounts for the Medicare levy and Medicare levy surcharge.

Family Tax Benefit and your tax return: common misunderstandings – Despite its name, Family Tax Benefit isn’t a tax refund or tax deduction, but a social security benefit to help with everyday costs like food, education, clothing and other child-rearing expenses.

Start your year-end payroll, tax and employee leave planning now – Whether you’re gearing up for a rush or planning a shutdown, early planning for the upcoming end-of-year holiday period is key.

The truth about FBT and your business’s work ute – You may have heard that providing a dual cab ute for employees to use in their work duties is automatically exempt from FBT, but believing this myth could leave you with an unexpected tax bill.

Next step for payday super: legislation introduced to Parliament – The new laws still need to pass through the House of Representatives and the Senate, but you shouldn’t wait to start planning for payday super.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic, 3161

(03) 9509 7033

info@guests.com.au

What’s the difference between the Medicare levy and the Medicare levy surcharge?

Many people getting their tax notice of assessment wonder why they see amounts for the Medicare levy and Medicare levy surcharge. Here’s how it works.

Medicare levy

The Medicare levy’s a compulsory charge that helps fund Australia’s public healthcare system. Almost all Australians pay this levy, which is 2% of your taxable income. The levy’s generally withheld from your pay by your employer throughout the year, so you may not notice it until tax time.

It’s important to note that having private health insurance doesn’t exempt you from paying the Medicare levy; it only affects your liability for the Medicare levy surcharge.

In certain limited cases, such as if you’re a low-income earner, a foreign resident or have a medical exemption, you may qualify for a reduced rate or full exemption.

Medicare levy surcharge

The Medicare levy surcharge (MLS) is an additional charge designed to encourage higher-income earners to take out private hospital insurance, reducing the strain on the public healthcare system. The MLS isn’t automatically withheld from your income but is calculated when you lodge your tax return.

You may be liable for the MLS if your income exceeds the MLS threshold and you, your spouse and your dependent children don’t all have an appropriate level of private patient hospital cover for the entire income year. The surcharge rates vary based on your income tier, beginning at 1% for singles with 2025–2026 income over $101,000 and families with income over $202,000.

Your income for MLS purposes includes several components beyond your taxable income, like reportable fringe benefits, total net investment losses and reportable super contributions. If you have a spouse, their income’s also considered.

Private health insurance

To avoid the MLS when your income’s over the threshold, you need an appropriate level of private patient hospital cover. Singles need a policy with an excess of $750 or less, and couples or families need a policy with an excess of $1,500 or less. Your policy must cover you, your spouse and all dependents for the full income year to avoid the surcharge.

Keep in mind that extras-only cover (such as for dental or optical) and travel insurance don’t qualify as private patient hospital cover for MLS purposes.

Family Tax Benefit and your tax return: common misunderstandings

Family Tax Benefit (FTB) is a government payment to help families with the cost of raising children. Despite its name, it’s not a tax refund or tax deduction – it’s a social security benefit to help with everyday costs like food, education, clothing and other child-rearing expenses.

FTB has two parts. Part A is the main payment available to most eligible families, and Part B is an extra payment for single parents or certain single-income families (usually where one parent stays home or works part-time). Importantly, FTB is paid by Services Australia (through Centrelink), not the ATO.

To be eligible, you must have at least one dependent child in your care aged 0–15 years, or a full-time secondary student aged 16–19. Your child must be an Australian resident, and you must meet certain residency rules.

FTB is means-tested, and there are income tests for both Part A and Part B payments.

FTB isn’t a tax refund

A tax refund is money the ATO gives back if you’ve overpaid tax during the year, but FTB is a government benefit, separate from the tax system. You don’t automatically receive FTB by lodging a tax return, and it’s not calculated in your tax assessment. Think of FTB as a family assistance payment like the Parenting Payment or Child Care Subsidy, rather than a tax refund or rebate.

How do you claim FTB?

To get FTB, you need to claim it through Services Australia. You can do this online via your myGov account, phone the Centrelink Families line or visit a service centre.

You’ll have a choice in how you receive FTB:

Fortnightly payments: Most families opt to get FTB every two weeks along with any other Centrelink payments. You estimate your family’s income and get payments, and Centrelink balances the payments against your actual income at year-end.
Annual lump sum: Alternatively, you can get FTB as an end-of-financial-year lump sum by waiting until after 30 June and submitting a claim for the year. This way you use the actual income from your tax return and avoid any overpayment. You must claim within one year after the financial year ends – so for 2024–2025 you have until 30 June 2026.

All communication about FTB will come from Services Australia (in your Centrelink online account or mailed letters), not in your tax return paperwork. For instance, if you get a lump-sum FTB payment, it will be deposited to your bank account by Centrelink after processing, entirely separate from any refund the ATO might send for your income tax.

If your circumstances change (like your income or care arrangements), remember to inform Centrelink, as it could affect your FTB rate. This will help avoid surprises after the end-of-year balancing calculations.

Start your year-end payroll, tax and employee leave planning now

The end-of-year holiday period can be make or break for your business. Whether you’re gearing up for a rush or planning a shutdown, the key is early planning for payroll, tax and super, alongside careful compliance with workplace laws.

Start by checking whether any year-end payday will fall on public holidays or during your closure. If so, you’ll need to bring the pay run forward so staff are paid before bank cut offs and tell employees about any temporary date changes in writing. While the ATO generally allows lodgment and payment on the next business day when a due date falls on a weekend or public holiday, that doesn’t extend to paying wages late. Report each pay run through Single Touch Payroll (STP) on or before payday, including any brought forward payments you’re processing before year-end closure.

Keep your PAYG withholding and BAS lodgments on track. If you have difficulty meeting due dates, contact your tax adviser and the ATO early to discuss options.

Don’t overlook super guarantee (SG) contributions on wages and paid leave taken over the break; annual leave and public holiday pay are part of ordinary time earnings for SG purposes. October to December quarter super must be received by employees’ funds by 28 January, so pay early to allow for bank processing times and so you don’t trigger the SG charge, interest, penalties and loss of deductibility.

If you provide year-end bonuses or staff gifts, process bonuses through payroll and withhold tax, and consider whether FBT applies to functions or presents. The minor benefits exemption may cover low cost, infrequent items, but good records are essential.

Remember that full-time and part-time employees who would normally work on a public holiday are entitled to their base rate for ordinary hours if they don’t work. You can ask employees to work public holidays, but requests must be reasonable, and employees can refuse on reasonable grounds. If they do work, apply the correct penalty rates or time off in lieu under their award or agreement. Where a public holiday happens during an employee’s annual leave, it counts as a public holiday, not a leave day.

For holiday shutdowns, you can only direct employees to take annual leave if an applicable award or registered agreement allows it, usually with advance written notice. Where staff don’t have enough leave, many awards allow leave in advance or unpaid leave by agreement; make sure to document any agreement in writing. Check whether leave loading applies to annual leave taken over this period and ensure your payroll system calculates it correctly.

The truth about FBT and your business’s work ute

If your business provides vehicles for employees to use in their work duties, you may have heard that providing a dual cab ute is automatically exempt from fringe benefits tax (FBT). Unfortunately, that’s not quite right, and believing the myth could leave you with an unexpected tax bill.

While dual cab utes can be exempt from FBT, they need to meet specific conditions, and employees’ personal use of work vehicles is an important factor.

Fringe benefits tax is what you pay as an employer when you provide benefits to your employees or their families, like allowing them to use a work vehicle for personal trips. It’s separate from income tax and is your responsibility, not your employees’. For a ute to be exempt from FBT, it must satisfy two conditions.

Exemption condition one: must be an eligible vehicle

Your dual cab ute needs to be designed to carry a load of one tonne or more; or more than eight passengers (including the driver); or a load under one tonne but not primarily designed for carrying passengers.

Most dual cab utes on Australian roads do meet this first condition, but this alone doesn’t guarantee an exemption.

Exemption condition two: private use must be limited

This is where many businesses trip up. Even if your dual cab ute qualifies as an eligible vehicle, any personal use must be minor, infrequent and irregular (according to ATO definitions of these terms).

What does this mean in practice? Think occasional trips to the tip or helping a mate move house once in a blue moon. Travel between home and work is allowed, as is incidental travel while undertaking work duties.

If your employee uses the work ute as the family car for weekend getaways, school runs or regular shopping trips, FBT applies even where the vehicle is a dual cab ute.

When FBT kicks in

If your employees’ personal use exceeds the limited private use threshold, you’ll need to calculate the taxable value of the fringe benefit, work out your FBT liability, lodge an FBT return and pay what you owe, and report the reportable fringe benefits on your employee’s income statement or payment summary.

The taxable value calculation depends on the type of vehicle and how it’s used. You might use the operating cost method or the cents per kilometer method, depending on your circumstances.

Record keeping

Even if you believe your dual cab ute qualifies for the FBT exemption, you need to keep records that demonstrate the limited private use condition is met. You don’t need to maintain a formal logbook for exempt vehicles, but you should have some way to show that private use remains minor, infrequent and irregular. This could mean regularly checking odometer readings and comparing them with expected work-related travel.

Next step for payday super: legislation introduced to Parliament

The government’s payday super reforms have taken another step towards implementation with the introduction of legislation to Parliament. Requiring employers to pay employee super contributions on payday, the reforms are designed to ensure that employees benefit from more frequent and earlier super contributions that grow and compound over their working life and reduce instances of unpaid super.

The newly introduced legislation includes some changes from the earlier drafts released for consultation in March. Contribution timeframes are now measured in “business days” rather than “calendar days”, and employers will have 20 business days (previously 21 calendar days) to make contributions for new employees. The additional time will also apply to contributions for existing employees who’ve changed to a new fund.

The legislation still needs to pass through both the House of Representatives and the Senate before it becomes law, but you shouldn’t wait to start planning.

Recognising that employers need time to deploy, test and embed changes in their payroll systems and business processes, the ATO has released a new draft Practical Compliance Guideline that outlines its proposed compliance approach for the first year of payday super (starting 1 July 2026). It plans to use a risk-based framework where employers will be categorised as at low risk, medium risk or high risk of not meeting their payday super obligations.

What’s next?

Start preparing now. Review your payroll systems and processes to ensure they’re ready for payday super by 1 July 2026; consider whether more frequent super payments could have cash flow implications for your business that you need to act on; and look for alternatives if you use the SBSCH, as it will be closed from 1 July 2026. Planning ahead will help you be compliant with the law and make a smooth transition.

Keep an eye on developments as the legislation progresses through Parliament and as the ATO finalises its compliance guideline. Changes could still be made before the reforms take effect.

Explanatory Memorandum

Client – October 2025

Newsletter

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 22 September 2025.

Make managing your tax less intimidating with the ATO’s free tools and services – If you’ve ever felt unsure about doing your tax online, or you’re helping someone who is, there are safe, simple ways to learn how it all works.

Deeming rate changes from 20 September: will your pension be affected? – Deeming rates are part of how the government calculates Age Pension and other social security payment entitlements.

Vouchers and GST in your business – If your business sells or buys vouchers, it’s essential to understand how to account for and report GST correctly.

$20,000 instant asset write-off due for extension to 30 June 2026 – This measure was announced by the Treasurer as an election commitment in April, and a Bill has been introduced to Parliament.

Unlock the benefits of downsizer super contributions – If you’re aged over 55, you and your partner may be eligible to contribute up to $300,000 each from the sale of your home into super.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following days:

Tuesday 14^th October – Jewish Holiday

Wednesday 15^th October – Jewish Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vi:c., 3161

(03) 9509 7033

info@guests.com.au

https://www.guests.com.au

GUESTS ACCOUNTING

Tax & Accounting Focused on your future

client alert

Make managing your tax less intimidating with the ATO’s free tools and services

If you’ve ever felt unsure about doing your tax online – or you’re helping someone who is – there are safe, simple ways to learn how it all works. The ATO offers practical tools to help you explore myTax and ATO online services, understand what information’s needed, and access free support if you’re eligible.

ATO Online Services Simulator

The ATO Online Services Simulator is an online training ground. It lets you explore myTax and other ATO online services without any risk or commitment. You can’t accidentally submit a real tax return or make actual payments – it’s purely for learning.

The simulator features eight different scenarios, each representing common Australian tax situations. You practise by acting as the “client” user and clicking through the same style of screens you’d see in real tax records in your MyGov account – entering details, reviewing typical pre-fill information and stepping through lodgment-style workflows.

Because the simulator uses mock data, you can try things out without affecting any real records. If you’re demonstrating for someone else – such as a student, a relative or a person you care for – taking them through the simulator first helps make the real system feel familiar.

To try the simulator, visit www.ato.gov.au and search for “Online Services Simulator” using the search bar at the top of the page.

Free support when you need it

If you earn $70,000 or less and have straightforward tax affairs, the Tax Help program offers free assistance from July to October each year. Accredited volunteers can help you lodge your tax return online, create a myGov account, lodge amendments or determine if you need to lodge a return at all.

You can access Tax Help support online, by phone, or in person at centres across Australia. The Tax Help volunteers understand that many people feel uncertain about digital tax processes and are specifically trained to provide patient, supportive guidance.

If your income exceeds $70,000 or you have more complex tax affairs – such as running a business, owning rental properties, or dealing with capital gains tax – the National Tax Clinic program might be suitable. This government-funded initiative operates through universities across Australia, where tax students provide free advice under the supervision of qualified professionals.

Deeming rate changes from 20 September: will your pension be affected?

If you’re receiving the Age Pension or other social security payments, you’ve likely heard about changes to “deeming rates” taking effect on 20 September 2025.

Deeming rates are part of how the government calculates your Age Pension and other social security payment entitlements. When you have financial assets like savings accounts, term deposits, shares or managed funds, the government and Services Australia don’t assess your actual investment returns for pension purposes. Instead, they assume (or “deem”) that your investments earn a set rate of return, regardless of what they actually earn.

There are two deeming rates: a lower rate that applies to the first $64,200 of your financial assets if you’re single (the first $106,200 for couples), and an upper rate that applies to amounts above that threshold.

From 20 September 2025, these rates each increase by 0.5%: the lower deeming rate will rise from 0.25% to 0.75%, and the upper rate from 2.25% to 2.75%. This marks the end of a freeze that’s been in place since May 2020, when rates were reduced as an emergency COVID-19 measure.

Not everyone will see changes to their pension payments. You’ll only be affected if you’re currently receiving an income-tested rate of pension (rather than an assets-tested rate) and your total income exceeds the income-free area for your payment type.

And here’s some good news: the deeming rate increases coincide with the regular indexation of pension payments on 20 September. Indexation typically increases payment rates to keep pace with cost-of-living changes.

Most people affected by the deeming rate changes won’t actually see their fortnightly payments decrease when both changes are considered together – many will still see a net increase in their payments due to indexation being larger than the deeming rate impact. For example, a single Age Pension recipient with $200,000 in financial assets and no other income will receive the full indexation increase of $29.70 per fortnight, because the deeming rate change won’t affect their payment rate at this asset level.

If you’re concerned about how these changes might affect you, consider speaking with Services Australia or your financial adviser. Remember, if your investments are earning more than the deeming rates, any excess returns don’t count as income for pension purposes, which is an incentive to seek reasonable returns on your investments.

Vouchers and GST in your business

If your business sells or buys vouchers, it’s essential to understand how to account for and report GST correctly.

A voucher is a document or an electronic record that represents a right to receive goods or services. This includes physical gift cards, digital vouchers and even prepaid phone cards. When your business sells a voucher, you’re essentially providing the recipient with a promise to supply goods or services in the future, and it’s at this future point that the GST implications come into play.

The ATO recognises two distinct types of vouchers.

Face value vouchers

Face value vouchers can be redeemed for a reasonable choice of goods and services – for example, a $50 supermarket gift card that works across all store locations. The voucher sale isn’t considered a GST taxable supply, so you don’t charge GST at the point when you sell the voucher. Instead, you account for GST when the voucher’s redeemed and the goods or services are supplied. For instance, if you sell that $50 gift card, you don’t charge GST on the gift card sale, but when the gift card’s redeemed to purchase goods worth $50, you charge GST on the supply of those goods.

There’s one exception: if you sell a face value voucher for more than its face value, you must account for GST on the excess amount immediately.

Non-face value vouchers

Non-face value vouchers are restricted to specific goods or services – like a voucher specifically for a spa treatment, purchased for $100. With these, you account for GST (eg on the $100 price) at the time of sale, but only if the voucher is redeemable for taxable supplies.

If the voucher is only redeemable for GST-free or input-taxed supplies, there’s no GST to account for.

Note on expired vouchers

Here’s something business owners often overlook: if you’ve sold face value vouchers that expire or remain unredeemed, and you write back the unused amount to your current income for accounting purposes, you need to make an “increasing adjustment” on your Business Activity Statement (BAS). This adjustment is 1/11th of the unredeemed balance.

Buying vouchers for your business

If your business buys vouchers, you may be able to claim a GST credit – but timing matters. For face value vouchers, you claim the credit when you redeem the voucher, not when you buy it. For non-face value vouchers, you claim the credit when you purchase the voucher. Remember, you can only claim credits for GST-inclusive purchases used in your business.

Keep accurate records

To account for GST on vouchers you sell, you need to keep accurate records including dates of sale, redemption and/or expiration, and the amounts of GST payable. Importantly, specific rules and exceptions apply to certain types of vouchers. For example, if you sell vouchers that can be redeemed for a combination of goods and services, you need to apportion the GST accordingly. You may also need to issue a tax invoice to the customer when a voucher’s redeemed, and keep a copy of this invoice for your records. And finally, of course, you need to report GST on vouchers in your BAS in accordance with ATO guidelines.

$20,000 instant asset write-off due for extension to 30 June 2026

Are you a small business owner planning to invest in new equipment or technology? The government is planning to extend the $20,000 instant asset write-off by a further 12 months until 30 June 2026.

This measure was announced by the Treasurer as an election commitment on 4 April 2025 and is contained in a recently introduced Bill, so It’s not yet law.

Once this Bill is passed, the $20,000 threshold will apply until 30 June 2026. Without this amendment, the threshold would have dropped back to the ongoing legislated level of $1,000 from 1 July 2025.

The extension would apply to eligible depreciating assets costing less than $20,000 each; eligible amounts included in the second element of an asset’s cost (cost additions); and general small business pools (enabling full write-off where the pool balance is below $20,000 at year end).

Small businesses that use the simplified depreciation rules and have an aggregated turnover of less than $10 million can continue to immediately deduct the business portion of the cost of eligible assets first used or installed ready for use by 30 June 2026. The write-off can apply to multiple assets, provided each individual asset is under the $20,000 limit.

Unlock the benefits of downsizer super contributions

If you’re nearing retirement and looking for ways to boost your superannuation savings, downsizer super contributions might be the perfect solution for you. These allow eligible Australians aged 55 and over to contribute proceeds from selling their home into their superannuation fund.

In the 2024–2025 financial year alone, 15,800 individuals took advantage of this strategy, contributing a total of $4.165 billion to their superannuation funds.

A downsizer contribution allows an eligible individual to contribute an amount equal to all or part of the sale proceeds (up to $300,000 each) from the sale of their home into their superannuation fund. The contribution must not exceed the sale proceeds of the home.

The great advantage is that downsizer contributions aren’t restricted by any other contribution caps or your total superannuation balance; there are no work tests; and there’s no upper age limit. It’s one of the rare ways you can contribute large amounts to your super even after the age of 75.

Downsizer contributions can also be used alongside other strategies. For example, someone under age 75 can potentially combine the following three strategies to contribute up to $690,000 to super in a single year, if eligible and if timed correctly:

a $300,000 downsizer contribution; and
up to $360,000 of personal after-tax contributions under the “bring-forward rule”; and
up to $30,000 of personal deductible contributions.

Eligibility

To make a downsizer contribution, you must:

be 55 years or older at the time of contribution;
have owned the home for 10 years or more (the owner can be you or your spouse);
sell your home that is in Australia and is not a caravan, houseboat or mobile home;
ensure the sale is exempt or partially exempt from CGT for you under the main residence exemption;
make the contribution within 90 days of receiving the sale proceeds (usually settlement date);
not have made a downsizer contribution previously from another home; and
provide your super fund with the Downsizer contribution into super form (NAT 75073) either before or at the time of making the contribution.

Failure to submit the Downsizer contribution into super form on time may result in your fund rejecting the contribution or treating it as a standard non-concessional contribution, which could have adverse tax implications.

The 90-day deadline from the date of settlement is also strict. If you need more time (eg due to delays in purchasing a new home), you must apply to the ATO for an extension. Extensions are granted only in limited circumstances, such as settlement delays due to council approvals.

Explanatory Memorandum

Client – Spetember 2025

Newsletter

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 25 August 2025.

Understanding the new 20% student loan reduction – If you’re one of more than three million Australians who have a student loan, you’re probably wondering when you’ll see the benefits.

Productivity Commission recommends business tax reform – As part of a major review to find ways to boost Australia’s productivity and economic resilience, the Productivity Commission has released an interim report that recommends company tax reform.

Your guide to the ATO super clearing house closure – The government has announced that the Small Business Superannuation Clearing House will shut down as part of payday super.

Looking to invest ethically? There’s a lot to think about – How can you tell if a company or super fund’s strategy genuinely lives up to what they’re promising?

Timing’s everything: SMSFs and minimum pension payments – As an SMSF trustee, it’s your responsibility to ensure that all members receiving an account-based pension are paid their minimum pension amounts by 30 June each financial year.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following days:

Tuesday 23^rd September – Jewish Holiday

Wednesday 24^th September – Jewish Holiday

Friday 26^th September – AFL Grand Final Public Holiday

Thursday 2^nd October – Jewish Holiday

Tuesday 7^th October – Jewish Holiday

Wednesday 8^th October – Jewish Holiday

Tuesday 14^th October – Jewish Holiday

Wednesday 15^th October – Jewish Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vi:c., 3161

(03) 9509 7033

info@guests.com.au

https://www.guests.com.au

GUESTS ACCOUNTING

Tax & Accounting Focused on your future

client alert

Understanding the new 20% student loan reduction

The Australian government’s promise to cut student loan debts by 20% has now become law. If you’re one of more than three million Australians who have a student loan, you’re probably wondering what this means for you and when you’ll see the benefits.

The change applies to all types of student loans, including VET Student Loans, Australian Apprenticeship Support Loans, and even older schemes like the Student Financial Supplement Scheme.

If you had an outstanding student loan debt on 1 June 2025, you’re eligible. The reduction is calculated on your debt balance as at that date, before the annual indexation was applied. Even if you’ve made payments since June or completely paid off your loan after that date, you’ll still receive the full 20% reduction based on what you owed on 1 June.

If you’ve already paid off your loan since 1 June, the reduction might actually put your ATO account into credit, potentially resulting in a refund to your bank account (as long as you don’t have tax debts owing).

If you’d already paid off your student loan completely before 1 June 2025, unfortunately you won’t benefit from the 20% reduction. The relief only applies to debts that existed on that date.

The ATO’s responsible for applying the change, and is currently updating its systems to process these reductions. Most people should see their 20% reduction applied before the end of 2025.

You don’t need to do anything to receive the reduction – it will be applied automatically. The ATO will notify you when it’s been processed, and you’ll be able to see your new lower balance through your myGov account or the ATO app.

Don’t delay lodging your tax return while you wait for your changed loan balance to appear in your MyGov account. There’s no benefit in waiting, and you should continue with your normal tax obligations.

Remember to update your bank details with the ATO if you’re expecting a potential refund, and if your loan gets paid off completely, don’t forget to tell your employer to stop withholding additional amounts from your pay.

Productivity Commission recommends business tax reform

As part of a major review requested by the government to find ways to boost Australia’s productivity and economic resilience, the Productivity Commission has released an interim report that recommends company tax reform aimed at encouraging businesses to invest more and help the economy grow.

The report notes that Australia has a relatively high company tax rate compared to similar countries, and suggests that the current system makes it harder for new and smaller businesses to compete with large established firms. Tax rules on claiming deductions for investments (like equipment or buildings) are complicated, making investment less attractive, and the system tends to favour companies that borrow (use debt) over those that raise money from investors (equity), which can disadvantage smaller businesses.

The Commission’s interim report recommends a new approach to company tax, including:

lowering the company tax rate for most businesses from the current 25% (for most small to medium businesses) or 30% (for larger companies) to 20% for all companies with annual revenue below $1 billion – only the largest companies (with over $1 billion in revenue) would stay on the 30% rate; and
introducing a new net cashflow tax (NCT) of 5% on company profits; and
allowing businesses to immediately deduct the full cost of investments (like equipment, technology or buildings) in the year they buy them, rather than spreading deductions over several years.

Importantly, these are only draft recommendations in an interim report. The Productivity Commission is seeking public feedback until 15 September 2025 and will produce a final report with more refined recommendations by the end of the year.

The government would then need to consider, accept and legislate any changes. If adopted, reform measures could be phased in or introduced at once. So, there’s currently no fixed date for when changes would take effect; at the earliest it could be sometime in 2026, depending on government decisions.

Since the report’s release, the government has responded cautiously. Treasurer Jim Chalmers acknowledged the tax reform proposals as “an important input” into policy discussions that would feed into the Economic Reform Roundtable in late August 2025, but hasn’t endorsed or rejected the specific recommendations.

Your guide to the ATO super clearing house closure

If you’re a small business owner who’s been using the ATO’s Small Business Superannuation Clearing House (SBSCH) to pay your employees’ super, we’ve got some news that might make you reach for another coffee. The free service that’s been making your life easier is closing down, and you’ll need to find an alternative before July 2026.

The government has announced that the SBSCH will be shutting down as part of the new “payday super” reforms. Here are the key dates:

1 October 2025: no new businesses can register for the SBSCH;
30 June 2026: last day existing users can use the service; and
1 July 2026: the SBSCH closes completely.

The closure coincides with new legislation that will require employers to pay super contributions at the same time as wages (payday super), rather than using the current quarterly system. Under these new rules, super contributions must reach your employees’ funds within seven days of each payday.

The ATO is pulling the plug because the SBSCH was designed for the old quarterly super payment system, and it simply doesn’t fit with the new payday super world we’re heading into.

If you’re one of the over 200,000 small businesses currently using the SBSCH, this change will impact you in several ways:

You’ll need to find a new solution before the June 2026 deadline.
Costs might increase – the SBSCH is free to use, but many alternative solutions charge fees.
Timeframes will be tighter – under the new rules from 1 July 2026, super contributions must reach funds within seven days of payday.
Your processes will change because you’ll need to integrate super payments into every pay run.

If you’re already using payroll software for wages, payroll software with built-in super payments might be your easiest transition. Many popular accounting packages now include super payment features that let you pay contributions directly through the same system you use for payroll. The beauty of these integrated solutions is that once you’ve run payroll, paying super can be as simple as clicking a button.

Most super funds also offer free clearing house services to employers. These typically require you to register as an employer with that fund, but then you can manage contributions to multiple funds in one place. The main trade-off is that you’ll need to use a separate web portal and either upload data from your payroll system or enter it manually.

There are also independent commercial providers. These tend to offer more sophisticated features and can handle high volumes of transactions. Commercial providers often charge fees, but they typically offer robust compliance features and reliable processing.

The ATO recommends starting your transition early – don’t wait until 2026. This gives you time to test your new process and iron out any issues before the deadline.

Looking to invest ethically? There’s a lot to think about

If you’re considering investing your money or your super in line with your values, you’re certainly not alone. A growing number of Australians want their investment to reflect what matters to them, and the marketplace is responding with “socially aware”, “responsible”, “sustainable” or “ethical” options. But with so many choices and claims out there, how can you tell if a company or super fund’s strategy genuinely lives up to what they’re promising?

When researching ethical investments, you’ll often come across the abbreviation “ESG”. ESG means “environmental, social and governance”, but different funds and companies may define ESG differently, and the term can cover a wide range of factors:

“Environmental” may include pollution control, biodiversity protection, carbon emissions reduction, or sustainable agriculture.
“Social” encompasses gambling exclusions, labour standards, diversity and inclusion, human rights, or military contracting policies.
“Governance” often covers board diversity, business ethics, whistleblower protection schemes and anti-bribery and corruption measures.

Because ESG can mean different things to different organisations, you’ll need to very carefully examine each fund’s investment strategy and product descriptions to understand the claims they are making and how their business practices align with those claims.

Think hard about what you personally want to achieve with your investments. What ESG factors are most important to you? How much weight do you want to give those factors? This will give you a solid foundation to work from when you’re comparing different products.

Look for clear, specific claims rather than vague, overarching statements. Check company reports, market announcements or their website for information.

Be wary of vague terms like “green”, “eco-friendly”, “zero emissions” or “carbon neutral” without supporting details. Do you understand the ESG or sustainability-related terms the fund or company are using? Are they backed up with evidence?

You may have heard about “greenwashing” in the news. Greenwashing (or greenhushing) describes false or misleading claims made by companies or products to make them seem more environmentally friendly, sustainable or ethical than they are. Sometimes, information about specific investments that don’t align with the expectations of ethically minded investors might be omitted or obscured.

Every fund operates differently. Some funds may exclude products that don’t meet certain ESG criteria (negative screening) or seek products that do meet a set ESG criteria (positive screening). Look for clear and detailed information about revenue thresholds, investment selection methodology, and which sectors or themes the investments are focused on.

Higher fees may be charged for management of ESG investments when compared to traditional options, so make sure you understand the full fee structure.

Timing’s everything: SMSFs and minimum pension payments

As an SMSF trustee, it’s your responsibility to ensure that all members receiving an account-based pension are paid their minimum pension amounts by 30 June each financial year. If you don’t meet the minimum pension payment amounts in full and on time, this could result in adverse tax consequences for the member.

The minimum pension payment amount is calculated using a formula that takes into account the member’s age, their account balance, and the start date of the pension:

Minimum payment amount = account balance × percentage factor

The percentage factor is set according to your age on 1 July in the financial year the pension amount is to be paid. Once an income stream is started, minimum annual payments are calculated using your account balance on 1 July each year, multiplied by a percentage factor that increases as you age.

To ensure the minimum pension standards are met, you must ensure that the minimum payment is received before the financial year ends. You must make payments at least once per financial year, and the first payment must be made no later than the end of the financial year in which the pension commences.

Failing to meet the minimum pension standards means the income stream will be taken to have ceased at the start of the year for income tax purposes; payments made during the year will be considered to be super lump sums for both income tax and super purposes and taxed accordingly; the fund won’t be able to claim exempt current pension income (ECPI) for that year or subsequent years; and there will be transfer balance account consequences for the member.

To restart a member’s payments, a new income stream will need to be recommenced, requiring asset revaluations, recalculations of the minimum pension payment, recalculation of the tax-free and taxable components of the new income stream, and new transfer balance account reporting.

Explanatory Memorandum

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Client – August 2026

Newsletter Newslettter We are pleased to supply you with the latest edition of Client Alert, which...