A refresher on Medicare levy and Medicare levy surcharge.

The Medicare levy’s a compulsory charge of 2% on taxable income, which helps fund Australia’s public healthcare system.

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This is withheld usually by your employer. Only 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.

The Medicare levy surcharge (MLS) is an additional charge designed to encourage higher-income earners to take out private hospital insurance. 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 and 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.

Also note that income for MLS purposes includes other components, such as reportable fringe benefits, total net investment losses and reportable super contributions. If you have a spouse, their incomes also considered.

To avoid the MLS when your incomes 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.

Be aware that extras-only cover, travel insurance and don’t qualify as private patient hospital cover for MLS purposes.

Acctweb

Payday Super part 1: understanding the new law

Passage of the Payday Super reforms by parliament this week has cleared the way for employee superannuation to be paid by employers more frequently. In the first of a two-part series, this article explains the myriad elements of the new law.

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This article is the first in a two-part series that explains the new Payday Super (PDS) law and the work that is needed to implement the reforms.

In writing this article, the author has extensively used acronyms for brevity. To assist readers, a list of these acronyms and terms is provided at the end of the article.

The problem is getting bigger

Not paying superannuation for employees is like not paying wages; it’s theft. Wage theft, which includes failing to pay superannuation, became a federal criminal offence on 1 January 2025. Non-payment of superannuation has been an issue for years, and the problem is getting bigger.

The Australian Taxation Office’s (ATO) Superannuation Guarantee (SG) gap data shows that, in 2017–18, unpaid employee superannuation exceeded $3.6 billion. This shortfall has increased by over 70 per cent to $6.2 billion in 2022–23. While the ATO’s gap data shows that 94 per cent of SG is being paid – that is, the vast majority of employers are currently doing the right thing – this still leaves one-in-four workers out of pocket for their retirement, according to the Super Members Council. Its August 2024 report, Fixing unpaid super: Making super fairer for workers and employers alike, suggests this can equate to up to $30,000 less in retirement.

Small business employers are most likely to have unpaid SG. According to the Australian National Audit Office’s 2022 report, Addressing Superannuation Guarantee Non-Compliance, 92 per cent of the businesses audited by the ATO for unpaid SG had a turnover of less than $10 million.

Employees being deprived of their superannuation entitlements was clearly the main driver for the Government’s PDS reforms, first announced in May 2023. But here was a rare opportunity to finally reform the draconian rules that have disincentivised employers from coming forward to report and make good past SG shortfalls.

The PDS reforms, which are about to become law, start on 1 July 2026 and will require employers to pay their employees’ superannuation at the same time as salary and wages, instead of quarterly. Small business employers are most likely to find the cash flow challenges associated with PDS harder to navigate. With less than eight months to go, the race is on to get systems and employers ready for the most substantial change to superannuation in more than 30 years.

Recap of current law

A brief recap of the current law is helpful before we examine the new law. Under the Superannuation Guarantee (Administration) Act 1992 (SGAA), employers are liable for the SG charge if they do not pay the minimum amount of SG contributions for their eligible employees to the correct fund within 28 days of the end of each quarter. Paying 12 per cent of employees’ ordinary time earnings (OTE) to the correct fund by the due date satisfies the employer’s obligation.

Employers who fail to make the minimum contributions for a quarter have a shortfall and must lodge an SG statement and pay the SG charge to the ATO by the 28th day of the second month following the end of that quarter.

The current three components of the SG charge are as follows:

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  SG shortfall – calculated as 12 per cent of total salaries and wages (instead of OTE, had the amount been fully paid on time);

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  Interest component – charged at 10 per cent, accruing from the start of the relevant quarter to the later of the quarterly due date or when the ATO receives the quarterly SG statement, which can be years later; and

•  

  Quarterly administration fee of $20 per employee.

The SG charge is specifically non-deductible under section 26-95 of the Income Tax Assessment Act 1997 (ITAA 1997). Notably, superannuation is not non-deductible merely because it is paid late. In other words, an employer cannot absolve their obligation to report and pay the SG charge by treating a late payment as non-deductible for income tax purposes.

Further to the above, an employer who fails to provide an SG statement by the due date is liable to pay an additional SG charge under Part 7 of the SGAA, equal to double the amount (200 per cent) of the SG charge. The ATO has a remission power, but not below 100 per cent of the SG charge for quarters from 1 July 1992 to 31 March 2018 (which were covered by the SG amnesty). The ATO’s guidance on remission of the Part 7 penalty is set out in PS LA 2021/3.

The ATO can also impose a 75 per cent administrative penalty for making a false or misleading statement. Further adverse tax consequences of SG non-compliance include director penalties, general interest charge (GIC) imposed on unpaid amounts and choice shortfall penalties.

New law

What is Payday Super?

From 1 July 2026, employers will need to make SG contributions on the same day employees are paid their salaries and wages, called ‘qualifying earnings’ (QE). The date that QEs are paid to the employee is called the ‘QE day’.

Qualifying earnings

A person’s QE include OTE, commissions, payments made under salary sacrifice arrangements, and other payments relevant to the expanded definition of employee in section 12 of the SGAA. This includes payments made under a contract that is wholly or principally for the labour of the person.

What isn’t changing?

No changes have been made to:

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  The OTE component of QE used to work out an SG amount, which remains 12 per cent of OTE.

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  The exclusions from the SG framework.

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  How salary sacrifice arrangements are recognised for SG purposes.

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  Further clarify the ‘employee versus contractor’ distinction, which remains a bane for employers in navigating their obligations.

When an employer ‘makes a contribution’ is still taken to be when a fund receives the contribution. This is despite stakeholder efforts during consultation that pressed for the date of payment instead. Treating contributions as having been ‘made’ only when they are received by the fund means employers remain liable for the SG charge after the timing is no longer in their hands and delays are due to reasons or factors beyond their control. These can include processing or banking delays by intermediaries and incorrect data provided by employees that thwart the employer’s efforts to make the contribution within the prescribed period.

What is changing?

The key changes and elements of PDS are explained below.

1.  

   SG charge – the SG charge is equal to the SG shortfall (shortfall) for a QE day, which comprises the total of that QE day’s individual final shortfalls, notional earnings components, administrative uplift amounts and choice loadings.

2.  

   Shortfall – the current ‘total salaries and wages’ base will no longer be used to work out the shortfall. Instead, the SG charge base has been sensibly aligned with the OTE base used to calculate SG amounts.

3.  

   Notional earnings – the current ‘nominal interest component’ is being replaced with a new ‘notional earnings component’ (NEC). The NEC will begin to accrue when an employer has a shortfall for a QE day, and it compounds at the GIC daily rate (currently 10.61 per cent) until a late contribution reduces the shortfall to nil. This is an improvement on the current law, as it will be payable only for the period the late contribution is actually outstanding.

4.  

   Administrative uplift – the current administration component of $20 per employee per quarter is being replaced with a new administrative uplift amount (AUA) for late or non-payment. While employers with a shortfall will be initially liable for an AUA equal to 60 per cent of the shortfall plus the NEC, the AUA can be reduced to nil. The method of reducing the AUA will be prescribed by regulation, so we don’t yet have the details. Whether the Commissioner has previously raised an SG charge assessment or the employer has lodged a voluntary disclosure statement (see below) will be relevant factors in determining whether the AUA is reduced, and by how much.

5.  

   Choice loading – the choice loading, which forms part of the SG shortfall, is an additional 25 per cent calculated on the value of the eligible contributions for any QE day where the employer has not complied with the choice of fund provisions.

6.  

   General interest charge – the GIC will accrue on a daily compounding basis on any outstanding SG shortfall and NEC amounts, as well as on any outstanding AUA.

7.  

   SG charge payment penalty – a new late payment penalty (LPP) (still in Part 7 of the SGAA) will apply to employers that fail to pay the SG charge within 28 days of being assessed. The penalty is equal to 25 per cent of the outstanding amount and increases to 50 per cent if the employer has previously been liable for the penalty in the previous two years. The penalty cannot be remitted and does not accrue GIC. This penalty is more proportionate and applies based on culpability.

8.  

   Seven-day period – eligible SG contributions received by their employees’ superannuation funds within seven business days after the QE day (the usual period) can reduce the shortfall for that QE day to nil. This replaces the current period of 28 days after the end of a quarter. A ‘business day’ means a day that is not a weekend or a public holiday for the whole of a State or Territory (this would exclude, for example, the Royal Queensland Show, the Royal Hobart Show and the Geelong Cup, which would still count as business days). The draft legislation proposed seven calendar days, but the usual period was changed to seven business days in response to consultation.

9.  

   Longer period – a longer period of 20 business days (the extended usual period) applies to the first payment of QE for a new employee (including a returning employee) and the first contribution to a different superannuation fund. An extended period also applies where the employer and the QE day are covered by an ‘exceptional circumstances determination’. This is intended to address natural disasters or widespread information and communications technology outages.

10.  

    Ordering rule – SG contributions are applied for QE days in the order in which they are received by the fund. This means a payment intended for a QE day can be applied to an earlier QE day for which there is a shortfall, even if the employer is not aware of an earlier under- or non-payment. This could result in a shortfall for the current QE day.

11.  

    Contributions made before the QE day – employers will still be able to make SG contributions in advance, but instead of up to 12 months before the start of the quarter as currently applies, the new rule will be up to 12 months before the QE day. This includes any amounts that exceed the SG amount for a QE day (overpayments); these can be carried forward for up to 12 months.

12.  

    Voluntary disclosure – the current SG statement is being replaced with a voluntary disclosure statement (VDS). The VDS can be lodged in the approved form at any time before the Commissioner makes an assessment of the shortfall for a QE day. While ‘voluntary’, employers will be incentivised to make prompt disclosures to reduce the AUA. Stakeholder feedback has encouraged the ATO to scrap the archaic SG charge Excel spreadsheets in favour of a digitalised mechanism incorporated into ATO online services. 

13.  

    Deductibility – section 26-95 of the ITAA 1997 has been repealed. This means the new SG charge will be fully deductible for income tax purposes, irrespective of whether the contributions were made on time. However, the GIC and the LPP are non-deductible.

14.  

    Fund allocation and SuperStream updates – the deadline for superannuation funds to allocate or return contributions that cannot be allocated to an employee’s account is being reduced from 20 business days to three business days. The SuperStream data and payment standards will be revised to allow faster payments via the New Payments Platform and improve error messaging so employers and intermediaries can quickly address errors.

15.  

    Removal of late payment election – the current election under section 23A of the SGAA, which allows an employer to offset a late payment against the SG charge for a particular quarter, will not be available under PDS. Instead, eligible contributions made late but before the SG charge is assessed will be automatically applied by the fund in the order they are received to reduce shortfalls.

16.  

    Maximum contribution base – the current maximum contribution base (MCB) is a quarterly earnings amount above which an employer is not liable for the SG charge if they do not make SG contributions (currently $62,500 per quarter, or a yearly equivalent of $250,000). Under PDS, the MCB will instead be applied as an annual limit. Once an employee’s QE exceed the MCB in a financial year, any subsequent QE by that employee in that financial year are disregarded in calculating any shortfall amount. The annual MCB will be the concessional contributions cap divided by 12 per cent (assuming the concessional contributions cap remains unchanged in 2026–27, the MCB would be $250,000).

17.  

    Employer exemption certificates – currently, an employer shortfall exemption certificate allows a high-income earner with multiple employers to ‘opt out’ of receiving SG for a quarter from one or more of their other employers to avoid exceeding the concessional contributions cap. Employees can apply for these certificates only if they have two or more employers concurrently in the same quarter. To accommodate PDS, the certificates will also be available where an employee has more than one employer in the same financial year, but consecutively. This important modification means that employees who change employers during the year can apply for a certificate where the combined SG contributions made by their former and new employers are likely to exceed the concessional contributions cap. The employee is treated as having reached the annual MCB if a certificate is in force; this can be provided to the new employer.

Where are we now?

After a lengthy consultation period, the legislative reforms moved rapidly through parliament. Introduced on 9 October 2025 and spending just two days before the Senate, the enabling legislation was finally passed on 4 November 2025. At the time of writing, it awaits Royal Assent.

Closing comments

I have covered only the key aspects of the new law, which contains many other nuances beyond the scope of this article.

Next week, in the second of this two-part series, I examine the work that is needed to implement the reforms, the impact the changes will have on employers, and a range of issues that have not been fully addressed in the law.

Acronyms and terms used in this article

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  AUA Administrative uplift amount 

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  ATO Australian Taxation Office

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  Extended usual period Longer period of 20 business days after the QE day

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  GIC General interest charge

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  ITAA 1997 Income Tax Assessment Act 1997

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  LPP Late payment penalty

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  MCB Maximum contribution base 

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  NEC Notional earnings component

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  OTE Ordinary time earnings

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  PDS Payday Super

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  QE Qualifying earnings

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  QE day Day on which QE are paid

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  SG Superannuation Guarantee

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  SGAA Superannuation Guarantee (Administration) Act 1992

•  

  Usual period Seven business days after the QE day

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  VDS Voluntary disclosure statement

Robyn Jacobson is a tax advocate and specialist with over 30 years in the tax profession. Her practical insights and expertise stem from her public practice background and more than 25 years of guiding the profession in her various roles as a professional tax trainer and advocate.

Robyn champions improvements to our tax system, with a focus on SMEs and supporting practitioners.

Robyn is a chartered tax adviser of The Tax Institute and a fellow of both CA ANZ and CPA Australia.

07 November 2025
By Robyn Jacobson
accountantsdaily.com.au

ATO’s holiday home owner tax changes spur taxpayers to be ‘wary and proactive’

Following on from the Tax Office’s move to refresh its approach to rental property tax deductions, tax advisers are warning holiday home owners to be wary of the coming changes.

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Last Wednesday (12 November), the ATO withdrew its existing ruling on rental property deductions (IT 2167) and unveiled a new draft tax ruling (TR 2025/D1) alongside draft practical compliance guidelines.

From this update, the ATO made clear it was looking to shift its compliance approach to rental property income and deductions for non-business taxpayers, apportionment of rental property deductions and the tax treatment of holiday homes used as rentals.

Tony Greco, Institute of Public Accountants (IPA) senior tax adviser, said taxpayers with rental properties also used as their holiday home would need to be aware of the changes, as certain holding costs were non-deductible.

According to Greco, an exception would apply if, at all times in the year, the taxpayers used the property mainly to produce assessable rental income. Yet the latest draft guidance challenged some of the previously accepted principles around apportionment expenses.

Under the renewed approach, non-business taxpayers with rental properties would need to demonstrate the property was being used to maximise rental income to qualify for rental deductions.

“The ATO has introduced some more factors around the concept of ‘available for use’ and the term ‘mainly to produce assessable rental income,” Greco said.

“If this guidance makes it into the final version, individuals and advisors will need to reconsider how they will treat future deductions for rental properties that are also used as holiday homes, particularly if they use such properties during periods of high demand for personal purposes.”

Greco also shared the way the ATO would assess this was by determining if the property was rented out during peak periods, which could lead to the conclusion that the holiday home was not mainly used to produce assessable income.

“Their interpretation focuses on so-called ‘peak periods’ and imputes a requirement that the taxpayer must attempt to maximise their rental income to qualify for the ‘mainly’ for income-producing use exception.”

Greco’s colleague, tax and super adviser at IPA, Letty Chen, also weighed in on the ATO’s changes and its draft guidance, outlining what it would mean for taxpayers set to be impacted by it.

Chen said that where the main use exception did apply, the taxpayer would be able to deduct ownership, usage, repairs and maintenance costs to the extent that they related to the derivation of rental income.

“The apportionment of expenses is based on the days the property is actually rented out plus the days it is unoccupied but is ‘available for rent on commercial terms’. However, there is one exception,” she said.

“Where a homeowner rents out a room in their private home on a short-term rental platform, the deductible portion of time only includes the day the room is actually tenanted. Any days it is available for rent on commercial terms but is not rented out will be treated as being days of private use.”

“So, taxpayers need to be aware that deductions relating to short term rentals of part of their private home will be more restricted than short term rentals of other properties.”

It was added that, regardless of whether the ‘main use’ exception applies, taxpayers could continue to deduct other costs directly related to deriving rental income, such as short-term rental platform fees and cleaning fees.

“Taxpayers also need to be aware that, because the ATO has not previously published these views, during this transitional period it will not take action to review expenses incurred before 1 July 2026, so long as the expense arrangement (e.g. mortgage interest, or a repair or maintenance agreement) existed prior to 12 November 2025,” Chen said.

“For existing users of short-term rental platforms, now is the time to review patterns of use of the property, including the times of year that it is made available for private use, whether it would be eligible for the ‘main use’ exception from the denial of holding cost deductions, and current methods for apportioning expenses for deductibility.”

CA ANZ Australian tax leader, Susan Franks, said that with the ATO looking to tighten its approach, holiday home owners need to be proactive.

21 November 2025
By Imogen Wilson
accountantsdaily.com.au

This includes ensuring the property was genuinely available for rent, especially in peak season, advertising widely, setting a fair market rent, avoiding restrictions that deter guests and keeping thorough records. 

Choose the right business structure step-by-step guide

Take out the guesswork out of choosing the right structure for your business

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Sole trader? Company? Partnership? When you first start a business, you'll need to decide on its structure. Your business structure identifies how you operate as a trading business. It'll affect things like:

• who can make important decisions
• tax advantages and disadvantages
• how profits and losses are shared
• legal obligations and costs

Use our step-by-step guide to help decide what business structure is right for you.

Start here

business.vic.gov.au

Restructuring Family Businesses: From Partnership to Limited Company

Family businesses form the backbone of the Australian economy, with many starting as simple partnerships before evolving into more complex structures

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In Short

• Restructuring a family business from a partnership to a limited company provides enhanced liability protection by creating a separate legal entity and limiting shareholders’ exposure.
• The process involves legal and structural changes, including asset transfers, contract novations and the establishment of a governed share capital structure reflecting family ownership intentions.
• It also offers the opportunity to introduce formal governance, clear employment and remuneration arrangements, and succession planning to support future growth and stability.

Tips for Businesses

Review your partnership structure early if your business is growing. Set up the new company, formalise contracts and transfers, then implement clear roles, employment terms and governance policies so your family business evolves smoothly and safely.

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As these enterprises grow and mature, the original partnership structure that served them well in the early stages may no longer be the most optimal. The transition from a partnership to a limited company represents a significant milestone in a family business’ journey, offering enhanced protection, improved governance, and greater flexibility for future growth. This article outlines how the restructuring process can yield benefits for families seeking to preserve their family-owned business.

The Case for Restructuring

Limited Liability Protection

The most compelling reason for restructuring from a partnership to a limited company lies in addressing the fundamental liability disadvantages of partnerships. In a partnership structure, each partner bears unlimited personal liability for all business debts and obligations, regardless of their level of involvement in creating those liabilities. This means that if one partner makes a poor decision or enters into an unprofitable contract, all partners’ personal assets, including family homes, savings, and investments, remain at risk.

This unlimited liability extends beyond just business debts. Partners can be held personally responsible for the professional negligence or wrongful acts of other partners, creating a situation where one family member’s mistakes can devastate the entire family’s financial security. The ‘joint and several liability’ principle means creditors can pursue any partner for the full amount owed, not just their proportionate share.

Converting to a limited company creates a separate legal entity, generally limiting shareholders’ liability to their investment in the company, meaning that personal assets remain protected from business creditors. This protection becomes increasingly important as family businesses grow and face greater commercial risks.

What Restructuring May Involve

Legal and Structural Changes

The restructuring process typically begins with incorporating a new company and transferring business assets, contracts and operations into that new company. This involves preparing comprehensive constitutional documents that will govern the company’s operations and establishing share structures that reflect family ownership intentions while ensuring compliance with the Corporations Act 2001 (Cth) (Corporations Act).

Legal documentation must address the dissolution of the existing partnership through: 

• formal partnership dissolution agreements; or
• transfer of business registrations, including:
  • ABN and industry-specific licences; and 
  • novation of key contracts with suppliers, customers and landlords. 

The incorporation process also involves determining the company’s share capital structure. Generally, family members hold ordinary shares in the restructured company, which provide equal rights to dividends and voting.

Asset Transfer 

The asset transfer process requires a detailed inventory of all business assets, including:

• tangible assets such as equipment, inventory, and property; and
• intangible assets such as customer lists, proprietary systems, and the business’ reputation.

Central to the restructuring process is the preparation of a comprehensive asset sale agreement between the partnership and the new company. This agreement formally documents the transfer of all business assets, liabilities and operations from the partnership to the company structure. 

The asset sale agreement must specify exactly which assets are: 

• being transferred;
• their agreed-upon values;
• any assumed liabilities; and 
• the consideration being provided.

The agreement should also cover:

• the transfer of contracts;
• intellectual property rights; and
• business licences to ensure seamless continuity of operations.

Debt obligations must also be carefully transferred or novated to the new company structure. This may involve obtaining consent from lenders and potentially providing new security arrangements. Some debts may remain with individual partners if lenders are unwilling to release personal guarantees, requiring ongoing management of these continuing obligations.

Corporate Governance Framework Implementation

The transition presents an opportunity to establish formal governance structures that partnerships often lack. This includes:

• establishing board structures with clearly defined roles and responsibilities;
• implementing proper financial reporting systems that meet corporate compliance requirements; and
• creating documented decision-making processes.

Many families use this transition to introduce independent directors or establish advisory boards, bringing external expertise and objective perspectives to business decisions. The governance framework should also include formal policies regarding conflicts of interest, related-party transactions, and family employment policies.

Meeting procedures must be established, including requirements for board meetings, annual general meetings and proper minute-taking. These formal processes, while initially seeming bureaucratic to families accustomed to informal partnership decisions, ultimately provide clarity and protection for all family members.

Employment and Remuneration Restructuring

Family members who were partners must transition to employee or director roles within the company structure. This requires developing new employment contracts that clearly define roles, responsibilities, reporting lines and performance expectations. The informal arrangements that may have worked in partnerships need to be formalised to meet employment law requirements.

Remuneration packages must be restructured to separate ownership returns from employment compensation. This might involve establishing salary packages for working family members, director fees for board participation and separate dividend policies for ownership returns. Superannuation obligations must also be addressed, as company employees require proper superannuation arrangements in place.

Net cash flow tax: What is it and what will it mean for SMEs?

As differing opinions circulate at the top end of town about the potential impacts of a net cash flow tax, its effect on SMEs could add to their daily struggle in the current regulatory environment.

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Following the Productivity Commission’s net cash flow tax proposal for bigger businesses, discussion around its impact on small businesses has surfaced.

Despite extensive conversation around the new tax proposal within the big business space, many small business owners are unaware of what the tax would entail and how it could add more regulatory change.

Feedback from the tax community following the surface of the net cash flow tax proposal was that they had never heard of it before, which was likely as the tax would be a world first and was often only discussed among tax specialists.

The net cash flow tax was proposed by the Productivity Commission before the economic reform roundtable in one of its five interim reports, titled Creating a more dynamic and resilient economy.

The net cash flow tax was proposed as 5 per cent on company profits while enabling companies to deduct capital expenditure costs to boost corporate investment.

According to the commission, the net cash flow tax would be a simple formula; cash in – cash out = net cash flow, with companies having to pay a 5 per cent tax on that final number.

However, the Productivity Commission said that the net cash flow tax was not intended to stand alone and would be paired with the suggested lowered company tax rate of 20 per cent for businesses with revenue under $1 billion.

From this, the commission said it estimated that the combined corporate tax reform and 5 per cent next cash flow tax would boost investments by $8 million while being revenue neutral over the medium term.

Despite this proposal being both never seen before and more focused on larger businesses rather than small ones, Accountants Daily reported last week that the tax could have adverse impacts on the small business community.

Letty Chen, the Institute of Public Accountants (IPA) tax and super adviser, said the professional accounting body would stand against the tax proposal for the threats it posed to the small business community.

As most small businesses continued to battle compliance challenges, Chen said the introduction of a net cash flow tax could add to this significant burden.

“Net cash flow tax has a valuable policy intent, but it must be designed with simplicity in mind to avoid creating a new and disproportionate burden on the small business sector, which accounts for the vast majority of Australia's businesses,” she said.

Following the release of the article and commentary, tax practitioners took to LinkedIn to share their thoughts on the tax, with many specialised in the small business community noting they hadn’t been aware of the tax proposal.

Natalie Lennon, Two Sides Accounting founder and director, said she could not believe the government was considering the tax.

“What a joke. SMEs need less red tape, not more. Another tax and more compliance complexity at a time where SMEs and accountants are already at breaking point.”

Other comments on the online forum included: “There are a lot of burdens on small businesses already, this will unintentionally create more…. And has the potential to make business owners look to other countries as better options to do business from. Australia is a tax heavy country; it can already be challenging with more layers.”

“Another complication for SMEs. Interesting that in the last Federal Budget, it was the first time in history there were more Australians employed by small businesses than by the government.”

“I think it's about time the government helped small business by either leaving it alone, or simplifying their life – not making it harder, and more expensive to get their compliance work done!”

The Business Council of Australia (BCA) has continued to weigh in on the conversation and recently added that the net cash flow tax risked lower GDP and raised costs for Australian consumers.

Bran Black, BCA chief executive, said based on modelling done by the body, the new tax would negatively impact economic growth and the hit to GDP would be around half a per cent every year.

“Far from boosting growth, a new cash flow tax would drag Australia’s economic growth down each and every year, while creating an entirely new system of red tape for millions of businesses,” Black said.

“The path to more investment and prosperity for all Australians does not come through an experimental new tax on every business – it is as simple as that.” 

Imogen Wilson
14 October 2025
accountantsdaily.com.au

How to declare minor children’s income

This depends on who the Australian Taxation Office considers the owner of the income

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If you (the parent or guardian) provide the funds, control how they’re used and spend the earnings, that income is generally considered yours and should be declared on your tax return.

Your child may need a separate tax return if:

• the income’s genuinely theirs and tax has been withheld (e.g. from bank interest or dividends because no TFN was provided), and you want to claim a refund;
• for share income specifically, if your child owns the shares and their dividend income (plus any other income that needs to be declared) is more than $416 for the year, a tax return must be lodged on their behalf. Even if it’s $416 or less, a return can be lodged to claim refunds of tax withheld or franking credits, which can result in a tax refund, and
• generally, if their total “non-excepted income” (income subject to the higher minor tax rates) exceeds $416, a return is needed.

An important question is “what is the original source of the money.”  Managing your child’s financial beginnings and helping them learn to handle their money is an important process. Understanding these tax aspects can help ensure everything’s set up for them correctly.

Acctweb

Tax and your child’s money: what parents need to know including TFNs

As a parent or guardian, it’s essential to understand how tax applies to your child’s money.

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If your child has a savings account or receives other income, you need to know how to help them manage their finances and meet their tax obligations.

Income tax can apply to money your child receives, such as bank account interest or dividends from shares.

For tax purposes, a “minor” is an individual under 18 years of age at 30 June of the income year. Special tax rules for minors apply until they no longer meet this definition.

•       Special tax rates for minors: For 2024–2025, for income of Australian resident minors:

–      $0 to $416: no tax;

–      $417 to $1,307: 66% of the amount over $416; and

–      over $1,307: 45% of the total income.

•       “Excepted income” and “excepted persons”: If your child’s income is excepted income, or they’re an excepted person, they’re taxed at the same rates as an adult. This means they can usually take advantage of the $18,200 tax-free threshold. Excepted income includes amounts like employment earnings and taxable pensions from Centrelink; excepted persons include children who work full-time, or have certain disabilities.

•       Bank account interest: There are specific thresholds for children under 16, until the end of the calendar year they turn 16:

–      Interest under $120 per year: Financial institutions generally won’t withhold tax.

–      Interest between $120 and $420 per year: If the bank has the child’s date of birth or Tax File Number (TFN), tax usually won’t be withheld, and a tax return isn’t needed for this income alone.

Interest of $420 or more per year: If a TFN is provided, tax won’t be withheld. Otherwise, the bank will withhold tax at 47%. For children aged 16 or 17 earning $120 or more in interest, providing their TFN prevents tax withholding.

Does my child need a Tax File Number (TFN)?

There’s no minimum age to apply for a TFN, but it can be useful for children to have one.

If you need to lodge a tax return on your child’s behalf, or they need to lodge their own (eg to claim a refund of withheld tax or because their income requires it), they will need a TFN.

Financial institutions and share registries may withhold tax at the highest marginal rate (currently 47%) from interest or unfranked dividends if a TFN isn’t provided. If money and its earnings are genuinely your child’s, you should quote your child’s TFN. If you have put some of your own funds aside for a child, that is considered at best as trustee for your child without a formal trust, and you’d quote your TFN.  If there’s a formal trust, use the trust’s TFN.

Acctweb

Small businesses remain optimistic despite high stress, report reveals

Despite one in four (25 per cent) small businesses reporting use of personal savings to stay afloat, close to one in two (45 per cent) of these businesses anticipate that customer demand will improve over the next year, research has shown.

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For its latest report, 2025 Small Business Perspectives, the Council of Small Business Organisations Australia (COSBOA) and Commonwealth Bank Australia (CBA) collected responses from a survey of 841 small business owners. This data revealed the pressures and opportunities that small businesses faced in July 2025.

More support needed

COSBOA chair Matthew Addison (pictured) said small businesses experienced rising costs, workforce shortages, regulatory complexity, and digital disruption – governing bodies must do more to assist small businesses through these challenges, Addison said.

“What we’re seeing is not a lack of resilience, but a system that needs to do more to support small businesses,” he said.

According to COSBOA and CBA data, 64 per cent of small businesses reported lower profits than last year (compared to 40 per cent in 2024), six in 10 (60 per cent) reported at least occasionally not being able to pay themselves, and one in four said they regularly had to dip into their personal savings.

The research also revealed that costs placed a heavy burden on small businesses – 72 per cent of SME owners said that rising business costs held their organisations back from expansion, while nearly three in four owners expected costs to rise again in the next 12 months.

In addition, the report found that many small business owners spent more than six hours every week on regulatory tasks, as most owners reported that compliance was one of their top five business expenses. These responsibilities contributed to the significant mental health impacts on these owners – 76 per cent reported experiencing stress or anxiety, and 57 per cent reported experiencing burnout.

A system stacked against owners

Based on the findings, nearly one in two (46 per cent) small business owners said that AI improved their business, 63 per cent of owners were content with their decision to start a business, motivated by purpose, independence, and community connection, and almost half (45 per cent) projected that consumer demand will rise over the next 12 months.

Addison said owners often felt like the system was “stacked against them”; however, with the right policy settings, including fairer taxes, targeted skills support, digital investment, and red tape reduction, small businesses could thrive, he said.

Rebecca Warren, executive general manager – small business at CBA, said despite an increasingly challenging and complicated operating environment, small business owners remained committed to their staff, customers and communities.

“Many are telling us they feel more confident about the year ahead,” Warren said.

Carlos Tse
30 October 2025
accountantsdaily.com.au

There’s $18.9 billion in lost and unclaimed super – some may belong to you

If you can’t account for the amount of super you feel you have earned during your work-life then it could be in this huge amount.

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Below is the latest data on super accounts that are lost or unclaimed and held by super funds or the ATO.

Last updated 29 October 2025

The total lost (fund-held) and ATO-held super as of 30 June 2025 was just over $18.9 billion for just under 7.3 million accounts.

Lost super (fund-held) includes both uncontactable and inactive super.

ATO-held super includes unclaimed super money (USM explained) and super holding account (SHA defined).

The following tables show the total number of accounts and value of lost super (fund-held) and ATO-held super at the end of the last 4 financial years.

Figures have been rounded to the nearest million. Totals may not align due to rounding.

Figures have been rounded to the nearest hundred million.

Note: The super health check includes step-by-step instructions on how to check for lost and ATO held super on ATO online services through myGov. To start, follow the prompts on the super health check page or download the super health check (NAT 75486, PDF 204KB)This link will download a file.

ATO