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Finish off the financial year:

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In this brief passage, we will discuss what you might want to do before the financial year end, and how you can close your books properly for the financial year.

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Before the financial year end

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Instant asset write-off deductions

If your business is planning to purchase fixed assets, it may be worth doing so before 30 June to claim tax deductions in the current financial year. This applies to the items such as vehicles, tools and business equipment. You may utilise the $20,000 instant asset write-off, available to businesses with a turnover of less than $10 million. The $20,000 threshold applies on a per-asset basis, allowing eligible businesses to write off multiple assets.  

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Superannuation contributions

You may want to make your final superannuation contribution payment for your business before 30 June, if possible. You may note that you can only claim tax deductions for the superannuation payments in the financial year that you have actually made the payments. ​To claim a tax deduction for the April to June 2026 quarter in the 2026 income year, contributions must be paid before 30 June 2026.

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You may also consider making additional tax-deductible personal superannuation contributions. The annual concessional cap is $30,000 for the current financial year and will increase to $32,500 after 1 July 2026.

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Carry forward unused concessional contributions

The carry forward rules may allow you to utilise unused concessional cap amount from up to 5 previous financial years if your total superannuation balance is less than $500,000.   

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Prepay business expenses

An eligible small business with less than $10 million turnover can claim a full tax deduction of prepaid business expenses up to 12 months in the current financial year.

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Defer capital gains 

If you have to sell a capital gains tax asset, such as shares or cryptocurrencies, towards the end of financial year, you may consider entering into the contract of sale after 30 June. This will defer the capital gains tax to the following financial year.  

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Vehicle logbook

If you have been using logbook method to claim vehicle deductions, you will need to record the odometer reading at the end of the financial year. The business use percentage established by your 12-week logbook is valid for up to five years, provided your circumstances do not change. Digital logbook apps are acceptable.

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Stock-take

If you keep trading stock for your business, you will need to conduct a stock-take on 30th June and use the stock-take value for your tax calculation. An eligible small business with less than $10 million turnover can choose not to conduct a stock-take, as long as the change of your stock value between the beginning and the end of the financial year is $5,000 or less.

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Profit distribution

If ​you operate your business through a family trust and the business makes a profit, you are required to decide on your profit distributions before the end of the financial year and document the distribution resolution. If your business structure is a company, you also need to review whether distributing dividends or paying additional salaries will be more beneficial. Often, you also need to consider if the company has any outstanding shareholder/director loans and available franking credits when making these decisions. Declared dividends can be used to offset shareholder/director loans.

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Keep your supporting documents

You need to​ keep supporting documents that can substantiate your deductions and GST credit claims. The ATO may request you to provide documentation to verify the claims included in your tax returns and business activity statements. For example, you need to have a tax invoice from the supplier in order to claim a GST credit. In general, you have to keep your records for five years from the lodgement date. 

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Single Touch Payroll

The ATO has already implemented Single Touch Payroll reporting system. All businesses including employers paying to closely held payees such as family members of a family business or directors/shareholders of a company also need to report payroll via Single Touch Payroll.

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Payday Super

From 1 July 2026, employers must pay employees their super guarantee on payday, at the same time as their salary and wages. Super guarantee payments must be received by your employees’ super funds within 7 business days after paying your employees. The quarterly super payment due dates are replaced this new requirement. The ATO's Small Business Superannuation Clearing House (SBSCH) will be closed permanently from 1 July 2026. Employers can continue using their existing superannuation payment methods, such as the AustralianSuper Employer Portal or automated systems within Xero and MYOB, to ensure ongoing compliance.

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After the financial year end

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Bank reconciliation

One of the most important year-end tasks is to ensure that you have entered all transactions for the financial year, including sales, purchases, payments, receipts and payroll related transactions. You also need to reconcile all your bank accounts. If you use XERO or MYOB, you may take advantages of their bank feeds features or download your banking transactions and import them into the software. These will significantly speed up your data entry process.

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Payroll

If you process Single Touch payroll with Xero, MYOB or other software, you will need to follow through their procedures to finalise the payroll for the financial year before 14th July. 

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​If you pay $83,333 or more salaries per month for the income year 2026 in Victoria, payroll tax may be applicable to your business. You would need to comply with the payroll tax requirements. ​

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Minimum wages

The minimum wage requirements normally change yearly. Most changes take effect on the first pay period after 1 July. It is important to review your industry awards and the national minimum wage when processing the first payroll of the new financial year.   ​

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Fringe benefits

Fringe benefit tax (FBT) may be applicable to certain benefits you provide to your employees. Normally, vehicle salary packaging is a great way to achieve tax savings. This may arise FBT. As an employer, you would need to ensure that the FBT liability for the year has been reduced to nil by the employee contribution (after-tax sacrifice). Otherwise, you may need to report and pay FBT separately. If you are registered for GST, you may need to include the GST on employee contributions in the Business Activity Statement.

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Eligible electric cars provided for private use are currently exempt from FBT; however, the reportable fringe benefit amounts must still be included in the employee’s income statement.

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Superannuation guarantee

The superannuation guarantee is currently 12% of an employee’s ordinary time earnings. From 1 July 2026, employers will use qualifying earnings as the base to calculate superannuation guarantee for Payday Super. For most employees, the calculation is the same. Some differences include all types of commissions are now subject to superannuation and pre-tax salary sacrifices are explicitly included in the calculation.

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Review the key information

Finally, you may have to review the profit and loss statement, and balance sheet for the financial year, as well as the aged payable and receivable reports, and check the tax code allocations in your Xero or MYOB file.

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Provide the information to us for preparing your tax return

There are a number of ways you can provide the information to us. With MYOB AccountRight online, MYOB Business, and XERO, you may let us work on your accounts online. If you use older MYOB desktop versions, you may simply email us the backup file. If you use a different accounting system, you may provide us with your profit and loss statement, and balance sheet. We will review the reports and let you know what other documents we may need from you.

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Vincent Wan

CPA, Registered Tax Agent

June 2026