Payday super started on 1 July 2026, so super now has to reach your employees’ funds within seven business days of each payday. A Federal Court decision handed down in July is a reminder of where unpaid super ends up when a business runs into trouble. 

What happened 

A civil construction company fell behind on super across three quarters while it was under financial pressure. It did not lodge super guarantee statements for those quarters, so the ATO issued default assessments for the super guarantee charge. The company went into liquidation in late 2017 and the ATO then issued director penalty notices to the three brothers who ran it, making each of them personally liable. The Federal Court dismissed their challenge. 

The directors argued they had taken all reasonable steps to keep the company compliant. They pointed to consultants engaged to help refinance the business, extra funding raised so wages and super could be paid, along with proceeds from asset sales. The Court found those steps were directed at keeping the business trading rather than at the super guarantee charge itself, so the defence did not get up. 

A detail worth knowing 

For one of those quarters the company did pay. The money left its bank account on the due date, but the super fund did not receive it until three days later. A shortfall arose for that quarter anyway. 

That was not the reason the directors ended up personally liable. It is worth knowing because it shows how strict the timing rule is. Super counts when the fund receives it, not when you send it. There is no allowance for a payment that left on time but was processed slowly. 

Why this matters more now 

Under the old rules you had 28 days after the end of a quarter to get super paid, which gave you a buffer for processing delays. That buffer has gone. The seven business day clock now runs from every payday. Because you report super through Single Touch Payroll each pay run, the ATO can see a late payment almost straight away. 

The most common cause of a late contribution is not forgetting to pay. It is processing time. If your clearing house takes three or four business days to pass the money on and you pay near the end of the window, you can be late without doing anything wrong. Rejected payments have the same effect. The clock keeps running while you sort them out. 

Key takeaway 

Pay on payday rather than at the deadline, allowing for any clearing house delays. Check each pay run for rejected contributions and get the corrected payment to the fund inside the same seven business days, because a rejected contribution counts the same as one that was never made. 

If cash is tight and you think you are going to be late, the reporting has changed. There is no longer a super guarantee charge statement to lodge. You can instead lodge a voluntary disclosure statement, which has to be in before the ATO issues an assessment for that payday. Lodging it within 30 days of the payday can cut the administrative uplift that sits on top of the shortfall, potentially to nil if you have not had an ATO assessment in the past two years. Once the ATO assesses, that option is gone. 

Talk to your accountant as soon as you know there is a problem, because there is far more that can be done before a director penalty notice arrives than after. 

The same legislation brings back loss carry back for companies, this time as a permanent feature rather than a temporary measure.  

What it does 

Normally a company that makes a tax loss carries it forward and waits for future profits to use it. Loss carry back lets the company look backwards instead, applying the loss against tax it has already paid and receiving a refundable tax offset. 

If your company makes a tax loss in an income year starting on or after 1 July 2026, so the 2026-27 year onwards, it can carry that loss back against tax paid in either or both of the two previous years. 

How much you actually get back 

Three things set the size of the refund. You get whichever is smallest. 

The loss itself. The offset is broadly the loss multiplied by the company tax rate for the loss year. A $200,000 loss at 25% is worth $50,000, however profitable the earlier years were. 

The earlier years. The company needs to have had an income tax liability in one or both of the two previous years. The loss is carried back against the taxable income of those years, so if there was no tax liability there is nothing to carry it back against. 

The franking account. The offset is capped at the company’s franking account balance at the end of the loss year. Tax that has already been passed out to shareholders as franked dividends cannot be claimed back a second time. 

Putting those together, say the company paid $100,000 of tax over the two earlier years then declared franked dividends that used $70,000 of those credits. That leaves $30,000 in the franking account. A $200,000 loss would otherwise support a $50,000 refund, but $30,000 is the ceiling. The unused part of the loss is still available to carry forward against future profits in the usual way. 

The franking account is the one that tends to catch people out, because it turns on dividend decisions made in earlier years. It is worth thinking about before the dividends go out rather than after. 

Two other points. The rules apply to revenue losses only, not capital losses. They also only apply to companies, so losses in a trust or in your own name are not affected. There are also conditions around having your returns lodged and formally choosing to claim the offset in the loss year, which we would work through with you at the time. 

Key takeaway 

Nothing is claimable yet, because the first eligible loss year is 2026-27. What matters now is knowing the option exists. If your company has had a couple of profitable years then hits a weaker one, discuss options with your accountant during tax planning, because loss carry back can turn that loss into cash now rather than a deduction you use years down the track.

For the past couple of years, the $20K instant asset write-off has been extended twelve months at a time. Under the law as it stood, the threshold was going to drop back to $1,000 from 1 July 2026. Legislation that passed Parliament recently has now locked it in at $20,000 permanently. 

How it works 

If your business has aggregated turnover under $10 million and uses the simplified depreciation rules, you can immediately deduct the business portion of an eligible asset costing less than $20,000, provided it is first used or installed ready for use from 1 July 2026. 

The threshold applies per asset, so several qualifying purchases can each be written off in full. Anything costing $20,000 or more goes into the small business pool and is depreciated at 15% in the first year then 30% each year after that. 

What actually changes for you 

The rules themselves are the same ones you have been using. What changes is the certainty. The annual guessing game about whether the threshold would be extended again is over, so you can buy equipment when the business needs it rather than rushing a decision before 30 June. 

That said, the deduction is still only worth having if the asset is needed or helps you generate revenue. Spending $18,000 to save tax at 25% is not a good outcome on its own. 

Key takeaway 

If you have been holding off on equipment because you were not sure the write-off would still be around, that uncertainty is gone. Have a chat to your accountant first before you commit to a large purchase so they can check the asset qualifies, the impact on your business cashflow and also put you in contact with a reliable finance broker (if needed). 

A Full Federal Court decision handed down earlier this year has reinforced a distinction that trips up a lot of employees and business owners working from home, the difference between running expenses and occupancy expenses. 

The two types of home office expense 

Running expenses cover the additional cost of working from home, electricity, internet, phone use, depreciation of office equipment. These are generally deductible for employees and business owners alike, either using the fixed rate method (70 cents per hour) or the actual cost method. Both methods require a record of the actual hours worked from home for the entire year, not an estimate or a sample period. 

Occupancy expenses cover the cost of the property itself, rent, mortgage interest, council rates, home insurance. These have always been much harder for employees to claim. 

What the court decided 

The case involved an employee who was required by his employer and by COVID-19 restrictions to work from a dedicated room in his rented apartment for the majority of his role. He claimed a portion of his rent as a deduction. The Full Federal Court ruled against him, even though the room was used exclusively for work and he had no real choice about where he worked. 

The court’s reasoning matters more than the facts. Rent is private or domestic in nature because of what it is, payment for accommodation, not because of how the space is used. Being compelled to work from home, using a room exclusively for work or having no alternative workplace does not change that. 

What this means for you 

If you are an employee (including a director who is an employee of their own company) working from home, occupancy expenses are not deductible. This applies even if you have a dedicated space used only for work. The only real exception is where your home is genuinely your place of business, for example a health practitioner seeing clients from a home clinic and even then there can be a trade-off with your main residence exemption if you own the property. 

Running expenses are unaffected by this decision. Keep claiming them and keep your hours records up to date for the whole year. 

What if the business is a trust or company? 

Hall is about an individual claiming a personal deduction for their own home. It doesn’t directly stop a trust or company from paying rent for the space it uses, but there are real issues to work through before going down that path. 

If a director or related individual owns the property, the entity can in theory pay arm’s length rent under a genuine lease or licence for the part of the home used for the business. Done properly, the rent is deductible to the entity and assessable income to the property owner. In practice, this option comes with several problems: 

• If the property is rented rather than owned, the head lease usually prohibits subletting or business use, so this option is often not available at all. 

• The property owner will generally lose part of their main residence exemption on the portion of the home covered by the lease, based on floor area and how long the arrangement runs. 

• If the entity pays for home expenses directly rather than under a genuine lease, this is likely to be treated as a housing or expense payment fringe benefit. Since Hall confirms the individual could not have claimed the expense personally, the “otherwise deductible” rule can’t reduce the taxable value, so FBT applies in full. 

• Council zoning and body corporate or strata rules can restrict running a business from a residential property regardless of the tax position. This is outside our expertise so it’s worth checking with your local council or body corporate before setting anything up, particularly if a nosy neighbour is the sort to notice. 

For most family businesses, the simpler and lower risk option is for the trust or company to claim the business-use portion of genuine running costs (electricity, internet, phone, equipment) rather than setting up a lease arrangement for occupancy. This avoids main residence complications and reflects how most home-based businesses are structured. 

Key takeaway 

If you or your business has been claiming a portion of rent, mortgage interest or rates for a home office, it’s worth checking that claim with your accountant. Running expenses remain fully available under the usual methods and if you’re operating through a trust or company, get advice before setting up any lease arrangement with the property owner.

The Government has announced a new way for businesses to manage PAYG instalments. 

What’s changing 

From 1 July 2027, businesses will be able to opt into Dynamic PAYG instalments. Instead of your instalment being based on last year’s tax bill (indexed up by a set factor), an ATO-approved calculation built into your accounting software will work out your instalment from your actual, current trading performance. 

Businesses will also be able to choose to report and pay instalments monthly instead of quarterly. If you have a history of not complying with your obligations, monthly reporting will not be optional, the ATO will require it. 

The upside 

If your income moves around during the year, this should mean your instalments track what you are actually earning, rather than a flat percentage of last year’s result. That means less chance of a large tax bill at year end and less chance of overpaying and having your money sit with the ATO for months before a refund comes through. 

The catch 

Bringing tax payments forward and potentially onto a monthly cycle is not free of downsides. For businesses with tighter cash flow, more frequent payments can be harder to manage than a smaller number of larger ones. 

There’s also a bigger issue than just keeping the books current. Software shows what’s been recorded, not the final tax position. Most entities have year end adjustments a live calculation won’t catch, things like trust distributions, Division 7A, tax versus accounting depreciation and non-deductible expenses. For trusts and companies especially, the gap between what the software shows and what the tax return reports can be significant. 

Key takeaway 

Nothing changes for now, this is an opt-in measure starting 1 July 2027. It’s a good prompt to think about whether your bookkeeping is up to date enough to support a real time tax calculation. Talk to your accountant about whether Dynamic PAYG instalments would suit your business once they become available.