How to reduce your business tax bill before 30/06/2026?
2025–26 Tax Update – What Individuals and Small Businesses Need to Know
The 2025–26 financial year brought a number of important tax and superannuation changes for Australian individuals, sole traders and small businesses.
Understanding these changes can help you plan ahead, maintain accurate records and make sure you are claiming the deductions and concessions you are legitimately entitled to.
Below is a practical summary of some of the key tax matters to consider for the 2025–26 financial year (1 July 2025 to 30 June 2026).
Important: Tax rules can be complex and eligibility requirements apply. The information below is general in nature and should not be relied upon as individual tax advice. Your circumstances should be reviewed before making tax or financial decisions.
1. $20,000 Instant Asset Write-Off for Small Businesses
Eligible small businesses with an aggregated annual turnover of less than $10 million can access the $20,000 instant asset write-off for eligible depreciating assets.
For the 2025–26 financial year, eligible assets costing less than $20,000 can generally be immediately deducted where the asset is first used, or installed ready for use, for a taxable purpose between 1 July 2025 and 30 June 2026.
The $20,000 threshold applies on a per-asset basis, meaning an eligible business may be able to immediately deduct multiple qualifying assets.
Assets costing $20,000 or more may generally continue to be dealt with under the small business simplified depreciation rules, subject to the applicable requirements.
The deduction is generally limited to the business-use portion of the asset.
Examples may include:
2. Small Business Depreciation and Asset Planning
Tax depreciation remains an important consideration for small business owners.
Before purchasing a major business asset, consider:
3. Working From Home Expenses – 70 Cents per Hour
The ATO's revised fixed-rate method for working-from-home expenses continues to apply.
For the 2025–26 financial year, eligible taxpayers using the fixed-rate method can claim 70 cents for each hour worked from home.
The fixed rate covers certain additional running expenses, including:
However, certain expenses outside the fixed-rate calculation may still be separately deductible, including the decline in value of eligible work-related equipment such as computers, desks and office furniture.
Importantly, you must keep records of the actual hours worked from home. Estimates are generally not sufficient.
You may also choose the actual-cost method where appropriate.
4. Work-Related Car Expenses
If you use your personal vehicle for work, you may be able to claim the work-related portion of your motor vehicle expenses.
For employees, there are generally two methods:
Cents per kilometre methodFor the 2025–26 financial year, the rate is 88 cents per kilometre, with a maximum claim of 5,000 business kilometres per car.
Logbook methodThe logbook method may be more appropriate where you have significant business or work-related vehicle use.
A valid logbook records your vehicle use over a continuous 12-week period and can generally be used for a period of up to five years, provided your circumstances do not materially change.
You should retain records supporting your motor vehicle expenses, including fuel, registration, insurance, servicing, repairs and other relevant costs.
For sole traders and businesses, different rules can apply, so the appropriate method should be considered based on the structure of the business and the vehicle's use.
5. Superannuation Guarantee Increased to 12%
The compulsory Superannuation Guarantee rate increased to 12% from 1 July 2025.
Employers should ensure that payroll systems and employment arrangements correctly reflect the applicable superannuation rate.
For the 2025–26 financial year, the general concessional superannuation contributions cap is $30,000, while the general non-concessional contributions cap is $120,000, subject to the applicable eligibility and contribution rules.
Additional rules may
Contact John from Elite Tax Advisory today about your business needs.
Phone: 0456 799 959
Email: [email protected]
The 2025–26 financial year brought a number of important tax and superannuation changes for Australian individuals, sole traders and small businesses.
Understanding these changes can help you plan ahead, maintain accurate records and make sure you are claiming the deductions and concessions you are legitimately entitled to.
Below is a practical summary of some of the key tax matters to consider for the 2025–26 financial year (1 July 2025 to 30 June 2026).
Important: Tax rules can be complex and eligibility requirements apply. The information below is general in nature and should not be relied upon as individual tax advice. Your circumstances should be reviewed before making tax or financial decisions.
1. $20,000 Instant Asset Write-Off for Small Businesses
Eligible small businesses with an aggregated annual turnover of less than $10 million can access the $20,000 instant asset write-off for eligible depreciating assets.
For the 2025–26 financial year, eligible assets costing less than $20,000 can generally be immediately deducted where the asset is first used, or installed ready for use, for a taxable purpose between 1 July 2025 and 30 June 2026.
The $20,000 threshold applies on a per-asset basis, meaning an eligible business may be able to immediately deduct multiple qualifying assets.
Assets costing $20,000 or more may generally continue to be dealt with under the small business simplified depreciation rules, subject to the applicable requirements.
The deduction is generally limited to the business-use portion of the asset.
Examples may include:
- Computers and business equipment
- Tools and machinery
- Office equipment
- Certain vehicles and other business assets
2. Small Business Depreciation and Asset Planning
Tax depreciation remains an important consideration for small business owners.
Before purchasing a major business asset, consider:
- Whether the business is eligible for the simplified depreciation rules
- The cost of the asset
- The date the asset was purchased
- The date it was first used or installed ready for use
- The percentage of business use
- Whether the asset is specifically excluded from the concession
3. Working From Home Expenses – 70 Cents per Hour
The ATO's revised fixed-rate method for working-from-home expenses continues to apply.
For the 2025–26 financial year, eligible taxpayers using the fixed-rate method can claim 70 cents for each hour worked from home.
The fixed rate covers certain additional running expenses, including:
- Electricity and gas
- Internet and data usage
- Mobile and home phone usage
- Stationery and computer consumables
However, certain expenses outside the fixed-rate calculation may still be separately deductible, including the decline in value of eligible work-related equipment such as computers, desks and office furniture.
Importantly, you must keep records of the actual hours worked from home. Estimates are generally not sufficient.
You may also choose the actual-cost method where appropriate.
4. Work-Related Car Expenses
If you use your personal vehicle for work, you may be able to claim the work-related portion of your motor vehicle expenses.
For employees, there are generally two methods:
Cents per kilometre methodFor the 2025–26 financial year, the rate is 88 cents per kilometre, with a maximum claim of 5,000 business kilometres per car.
Logbook methodThe logbook method may be more appropriate where you have significant business or work-related vehicle use.
A valid logbook records your vehicle use over a continuous 12-week period and can generally be used for a period of up to five years, provided your circumstances do not materially change.
You should retain records supporting your motor vehicle expenses, including fuel, registration, insurance, servicing, repairs and other relevant costs.
For sole traders and businesses, different rules can apply, so the appropriate method should be considered based on the structure of the business and the vehicle's use.
5. Superannuation Guarantee Increased to 12%
The compulsory Superannuation Guarantee rate increased to 12% from 1 July 2025.
Employers should ensure that payroll systems and employment arrangements correctly reflect the applicable superannuation rate.
For the 2025–26 financial year, the general concessional superannuation contributions cap is $30,000, while the general non-concessional contributions cap is $120,000, subject to the applicable eligibility and contribution rules.
Additional rules may
Contact John from Elite Tax Advisory today about your business needs.
Phone: 0456 799 959
Email: [email protected]
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