Summary:
- Superannuation Guarantee increases to 12% from 1 July 2025
- “Payday Super” means super must be paid with wages from 1 July 2026
- ATO interest charges no longer tax deductible after 1 July 2025
- Instant asset write-off drops back to $1,000 from 1 July 2025
- PAYG withholding cycles may shift to monthly for some businesses
Australian small and medium businesses are staring down some significant changes as we approach the 2026 financial year. These changes aren’t small, and they’ll directly affect your cash flow, working capital, and how you plan your spending. If you rely on timing flexibility in your payments — whether that’s super, tax or supplier invoices — it’s time to take a closer look at your numbers and adjust your plans.
Let’s break down what’s changing and how you can prepare your business.
Higher Super Contributions and Payday Super: What This Means for Your Cash
From 1 July 2025, the Super Guarantee rate increases to 12%. That’s an extra 0.5% on top of the current 11.5%. It may not sound like much, but across your payroll, it adds up.
Then comes a bigger shift: from 1 July 2026, most employers will need to pay super at the same time as wages. Gone are the days of holding onto super funds until the end of the quarter. The money will leave your account with each pay run, tightening your cash flow cycle.
What does this mean in practice? If you’ve been using that gap between pay and super deadlines to manage working capital, you’ll need a new strategy. Plus, your payroll systems will need updating to handle the change, which could mean added costs.
What to do:
- Review your payroll software now — don’t leave system updates until the last minute.
- Build the extra super costs into your budgeting as early as possible.
- Shift to more frequent cash flow forecasting so you can spot pinch points before they happen.
ATO Interest No Longer Deductible: The Cost of Falling Behind Just Went Up
Right now, if you incur interest from the ATO on late payments (such as GIC or SIC), you can claim a tax deduction for that cost. From 1 July 2025, that’s no longer the case.
This means falling behind on tax payments will cost you more — and there’s no silver lining at tax time. Any shortfall interest or late charges will hit your bottom line harder.
What to do:
- Prioritise paying your tax bills on time.
- If you’re on an ATO payment plan or considering one, rework your numbers to reflect the non-deductibility.
- Consider alternative funding if you’re at risk of delays — the right business loan may still provide deductible interest.
If you need assistance with tax debt, our team can help.
Instant Asset Write-Off Drops Back: Why Timing Matters
Until 30 June 2025, you can still claim an instant write-off for assets costing less than $20,000. From 1 July 2025, unless further changes are announced, this will fall back to just $1,000.
This could make a big difference to your tax bill timing. The immediate deductions many businesses have relied on will no longer apply to most equipment purchases, so the tax benefit will be spread over several years through depreciation.
What to do:
- Bring forward any planned asset purchases if possible.
- After 1 July 2025, revisit your capital expenditure plans — the cash flow benefit from big tax deductions won’t be as immediate.
- Understand how the small business depreciation pool works so you can plan properly.
PAYG Withholding: More Frequent Payments Could Be on the Cards
If your business grows and your total PAYG withholding crosses a certain threshold, the ATO could move you from quarterly to monthly (or more frequent) withholding payments from 1 July 2025.
This means sending money to the ATO more often — again, tightening your cash cycle.
What to do:
- Watch for any notices from the ATO about your withholding obligations.
- Update your systems and forecasting if your payment cycle changes.
How Secured Lending Can Help
At Secured Lending, we know that with all these changes, cash flow planning is no longer optional — it’s essential. If you find yourself needing to bridge a gap, we can help with short term funding solutions like caveat loans, bridging finance, or first and second mortgages. We move quickly, so you can meet your obligations and stay focused on growing your business.
Would you like help modelling how these changes could affect your cash flow over the next 12–24 months?
