The rumours were true. The Federal Government has drafted legislation to allow employees a standard $1,000 deduction to cover work-related expenses, potentially commencing for the 2027 tax year.
On 20 April 2026, Treasurer Jim Chalmers announced the policy has been opened for public consultation as part of a broader tax reform agenda ahead of May’s Federal Budget.
Chalmers has flagged that Labor’s budget will include broader reform beyond this measure, stating “there’ll be tax reform, there’ll be a productivity push, and there will be savings”, with the $1,000 deduction designed to “cut back on paperwork” and “save time and money” for taxpayers.
How is the standard deduction proposed to work?
All individuals across Australia will be offered a standard deduction of $1,000 at tax time, proposed to cover their work-related expenses without the need of substantiation. This could include mobile phone use, work-related travel, or work-from-home expenses to name a few.
Every taxpayer will receive a standard $1,000 deduction which is then reduced for every itemised deduction they take.
For example, if you claimed $400 in work-from-home expenses, your standard deduction would be reduced to $600. Your total deduction would still be $1,000.
As another example, if you claim $2,500 of itemised deductions, your standard deduction is reduced to nil but you still get $2,500 in tax deductions.
In addition, Chalmers confirmed that non-work-related deductions such as charitable donations or professional association memberships and union fees could still be claimed on top of the $1,000 deduction.
Do you have to use it?
No, the standard deduction is not mandatoryfor all employees.
You can opt-in, or if you wish to claim more than $1,000, use the current substantiation methods to capture every deduction you are entitled to.
Subject to its passing, around 6.2 million workers in Australia are tipped to benefit from this legislation.
The consultation period for this draft legislation, which opened on Monday, is set to close on 1 May 2026.
Negative gearing. It’s the way to riches, how all Australian billionaires make their money? We all love it, right?
But how does it actually work? Is it the magic path to riches we all think it is?
It’s one of the most widely used tax strategies in the country, yet also one of the most misunderstood. If you’ve heard the term “negative gearing” in the media and found it confusing, here’s a clear breakdown of how it works in practice.
What is Negative Gearing?
When you invest in an asset, that (hopefully) asset generates income, be it in the form of interest, dividends, rent, royalites or capital growth. That income is taxable to the owner of the asset.
You might also incur costs to hold the asset. There might be fees and charges, or the cost might be more substantial. For example, if you own a property, there could be maintenance costs, agent fees, council and water rates, as well as interest costs on money borrowed to purchase the property and even depreciation on assets purchased. Theses are all ‘costs’ for tax purposes.
If the amount of income you receive is less than the expenses incurred, then you are negative gearing your asset. You are generating a tax loss from the investment.
In most other countries, that’s where the story ends. You’re just running a loss-making investment. However, in Australia, investment losses can be offset against your other income, such as your salary or wages. That lowers your taxable income and ultimately, the amount of tax you pay.
Investment Property Example
You buy an investment property that earns rental income. The costs of owning this investment include agent fees, water rates, council rates, strata levies and building insurance.
Then there’s interest on your mortgage, and depreciation, which lets you claim a deduction for the wear and tear on the building over time.
Let’s pick some numbers to illustrate an example, making the following assumptions.
Let’s say you purchased a property for $500,000 in year 1. Here’s what the investment could look like.
So in this example, you’re losing $16,700 per year, but that loss reduces your tax bill by $7,849. That’s helpful, but it only tells half the story.
The real benefit of negative gearing in Australia is the interaction between deductible losses now and discounted capital gains in the future.
A capital gain is simply the profit you make when you sell an asset for more than you paid for it. For property investors, this is typically the increase in the property’s value over time. Thus, if you bought your property for $500,000 and sold it for $750,000, your gross capital gain is $250,000.
In Australia, we have a Capital Gains Tax (CGT) discount. If you hold an asset for more than 12 months, you get a 50% discount on the capital gain.
Thus in our property example, your gross capital gain of $250,000 is halved to $125,000. If you’re in the top marginal tax rate, then your tax is $59,375.
So, while your deductions are saving you tax at your full marginal rate, (around 47 cents in the dollar), when you sell your investment property, you’re only paying capital gains tax on half of the profit.
Watch out for Depreciation!
Depreciation is the one thing to look out for if you are negatively gearing an investment.
Back to our property example, an asset that was purchased for $500,000. Over the years you hold it, you claim $100,000 in depreciation for the building and PPE, which could be a valuable tax deduction at the time. However, the ATO reduces your cost base by those claims, bringing it down to $400,000
When you sell for $750,000, your taxable capital gain isn’t $250,000. It’s $350,000, calculated from your adjusted cost base of $400,000.
Does the strategy still work in your favour?
Yes. You claimed that depreciation at 47 cents in the dollar and you’re paying CGT on the new total amount at around ~23.5 cents. However, this is a detail you need to understand upfront, not at tax time.
Depreciation in Numbers
Over the ten year period, you have saved $65,950 in income tax from you rental losses, and paid $82,250 in CGT when you sold. That leaves you with a net tax cost of $16,300 over the life of the investment. The property has made a $250,000 capital gain. You have been claiming deductions at 47 cents and only paying CGT at around 23.5 cents.
That advantage compounds across every year you hold the asset. The longer you hold, the more years of deductions you accumulate at your full marginal rate, and the more capital growth builds up below the CGT discount.
Using the example above, this graph shows how after-tax returns shift across different annual capital growth rates. The compounding effect means small positive differences in growth rate can have the potential to generate long-term wealth.
Policy Changes
Even though negative gearing has been part of the Australian tax system for decades, the conversation around tax reform has recently reignited.
Cost-of-living and housing pressures, budget constraints, and shifting political sentiment have placed negative gearing back in the media spotlight.
While the rules have not changed yet, if you are considering this strategy, it’s worth discussing the implications of any policy changes.
Risks and Key Takeaway
Negative gearing is a strategy where your investment property runs at a loss, which can be used to reduce your taxable income.
Of course, it’s not without its risks:
- The property doesn’t achieve expected capital growth, making ongoing losses unviable
- Extended vacancy periods
- Unexpected repairs
- Interest rate increases
- Potential upcoming changes to tax legislation
It’s generally best suited to higher-income property investors who can afford the short-term cash flow impact and are focused on long-term capital growth. As with any strategy, it’s important to speak with your accountant or financial adviser to ensure it aligns with your personal circumstances and financial goals.
Watch our Video!
James explains Negative Gearing to potential investors in detail (using a similar property example). Watch it below!
If you run a property development business through multiple entities, the message is simple: check your structure now.
The Australian Taxation Office (ATO) recently issued “Taxpayer alert – contrived property development arrangements”, a signal the ATO has identified a pattern of arrangements it believes are being used to delay or reduce tax, sometimes indefinitely.
The ATO’s concern isn’t the use of multiple entities on its own, it’s whether the structure reflects what’s really happening commercially, or whether it exists primarily for a tax outcome.
The ATO has indicated it will look at both current and past projects.
What's the Focus?
The ATO is actively reviewing property development arrangements where there is a separation of land ownership, development activities and construction activities. The concern is that some of these structures artificially separate what is, in reality, a single property development activity — resulting in development profits being deferred, sometimes indefinitely.
The ATO has identified a common pattern below:
- A landowner entity (Land Co) owns the development site
- A related developer entity (Development Co) is often newly created and inserted between the landowner and the builder
- The landowner and developer are ultimately controlled by the same party
- Construction is undertaken by a separate builder entity (Builder Co)
- A Property Development Agreement (PDA) is entered into, usually using a long-term construction contract spanning multiple years
- The contract is structured so the developer claims deductions progressively, but does not recognise income until the project is finished
- The developer often has no staff or minimal assets and does not genuinely manage or control the development
- The developer records tax losses during the build, which are used to offset income elsewhere in the group
- When profits are finally recognised, a new project begins — meaning tax is continually deferred
Why the ATO Is Concerned
The ATO views these arrangements as higher tax risk because the landowner and developer are effectively undertaking one economic activity, the separation of roles may be contrived rather than commercial, and the structure can delay income recognition, generate artificial losses, and reduce or eliminate tax across the group. In some cases, wealth is accumulated and extracted without corresponding tax being paid.
Where the ATO considers the main purpose of the arrangement is to obtain a tax benefit, it may apply the general anti-avoidance rules in Part IVA — cancelling those tax benefits.
What the ATO Is Doing
- Engaging directly with taxpayers in higher-risk arrangements and reviewing both current and historical projects
- Publishing a Practical Compliance Guideline outlining higher and lower risk structures in the near term
- Applying penalties where arrangements are considered contrived
What this Means for Property Developers
Not all multi-entity structures or long-term contracts are unacceptable. However, developers should ensure that:
- Their structure reflects commercial reality
- Each entity has a genuine role, capability and decision-making authority
- Income and expenses are recognised in line with actual activity
- The structure was not designed primarily to achieve a tax timing benefit
Next Steps
Businesses using separate landowner, developer and builder entities, particularly where losses are involved, should review their arrangements with a specialist property development accountant. We can help walk through the steps below:
- Assess whether the structure makes sense without the tax outcome
- Obtain independent professional advice
- Apply for an ATO private ruling where uncertainty exists
- Make a voluntary disclosure if risks are identified
Not every employer needs to lodge a Fringe Benefits Tax (FBT) return. So how do you know if you need to?
We’ll run through four common scenarios to help you work out whether your business needs to lodge an FBT return:
You provided a taxable benefit and need to lodge
Your benefits are exempt, so you may not need to lodge
You’re a charity or not-for-profit with special FBT rules
You haven’t provided any benefits at all
Before identifying your business’ situation, here’s a quick refresher on how FBT works.
What Is FBT?
Fringe Benefits Tax (FBT) is a tax that employers pay when they give employees something of value that isn’t their regular salary (think of company cars, paid gym memberships, or free accommodation).
You may be wondering, why does FBT exist?
Well, without it, businesses could replace employees’ wages with non-cash benefits, which can significantly reduce the amount of tax the employee pays. FBT closes that loophole by taxing those benefits separately. Importantly, the employer pays the tax and not the employee who receives the benefit.
The FBT year runs from 1 April to 31 March (not 30 June like the regular tax year). The tax rate applied is 47% to a “grossed-up” value of the benefits provided (ATO — FBT overview).
The grossed-up value depends on the benefit, but in most cases is either 2.0802 (GST) or 1.8868 (non-GST) times the value provided.
If you pay $10,000 in school fees for an employee’s child, the gross-up is:
$10,000 × 1.8868 = $18,868
The FBT on that amount is:
$18,868 × 47% = $8,867.96
So, from the business’s perspective, they pay $10,000 in school fees and $8,867.96 in FBT, totalling $18,867.96.
That’s a high tax rate that usually only benefits income earners on the highest marginal tax rate, but plenty of common benefits are either exempt or fall below the threshold.
This is exactly why it’s worth checking your situation carefully.
Do You Need to Lodge a Return?
You need to lodge an FBT return if you’ve provided fringe benefits to employees during the FBT year (1 April to 31 March) and those benefits aren’t fully covered by an exemption.
Here’s how to work out if you need to lodge.
You provided a benefit and it's taxable → Lodge a return
If you’ve given an employee something that the ATO considers a fringe benefit and no exemption applies, you have an FBT liability and need to lodge.
Example: Jess runs a small business and lets her employee use the company car on weekends for personal trips. That’s a taxable fringe benefit — Jess needs to lodge an FBT return.
Common taxable benefits include the following (ATO — Types of fringe benefits):
- Private use of a company car;
- Paying an employee’s personal bills or expenses;
- Entertainment like meals or event tickets;
- Low or interest-free loans to employees;
- Paying for an employee’s accommodation or housing; and
- Reimbursing private school fees or health insurance premiums.
See the full list of fringe benefit types on the ATO website.
You provided a benefit, but it's exempt → You may not need to lodge
Not everything you do for your staff triggers FBT. There are several important FBT exemptions:
- Minor benefits exemption — if a benefit is worth less than $300 and you don’t provide it regularly, it’s generally exempt (ATO — Minor benefits); and
- Work-related items — laptops, tools, and portable devices provided primarily for work use are exempt, one per employee per year (ATO — Work-related items).
Example 1: At Christmas, Mark gives each of his employees a $200 gift hamper. Because it’s under $300 and it’s a one-off, it’s covered by the minor benefits exemption. No FBT liability, no return needed.
Example 2: A business buys its employee a laptop for work. If the employee primarily uses it for work, no FBT applies.
One thing to note: if you’re already registered for FBT but all your benefits are exempt, you may still need to lodge a nil return. Check with your tax adviser if you’re in this situation.
You're a charity or not-for-profit → Special rules apply
Charities and certain not-for-profit organisations get access to FBT concessions that can significantly reduce or eliminate their liability, even if they’re providing substantial benefits through salary packaging arrangements. However, they still need to be registered and maintain records.
Example: A public benevolent institution lets staff salary package up to $15,900 in living expenses per year. Their FBT exemption means that little to no tax applies, but they still need to stay on top of their FBT obligations (ATO — FBT concessions for not-for-profits).
You haven't provided any benefits → No return needed (but double-check)
If you genuinely haven’t given employees anything beyond their wages, you don’t have an FBT liability and won’t need to lodge. Before you are sure, it’s worth doing a quick mental audit:
- Do any employees have access to a company car?
- Have you paid for any personal expenses on their behalf?
- Have you shouted staff meals, events, or gifts?
- Do you have any loan arrangements with employees?
Example: David runs a small retail shop and pays his staff wages only. There are no cars, no perks, and no reimbursements. David has no FBT obligations.
If the answer to all of the above is no, you don’t need to lodge an FBT return.
Don't Forget: Reportable Fringe Benefits
Even if your FBT liability is low, there’s another obligation to be aware of. If you provide an employee with benefits totalling more than $2,000 in taxable value over the FBT year, you need to report the grossed-up amount on their payment summary (ATO — Reportable fringe benefits).
This doesn’t change your FBT bill, but it does affect the employee’s taxable income for items such as the Medicare levy surcharge and government benefit calculations.
When Is the FBT Return Due?
Payment is due at the same time as lodgement (ATO — FBT return lodgement). If you pay FBT quarterly through your BAS, different dates apply — your tax agent can advise.
Key Takeaways
You need to lodge an FBT return if you’ve provided taxable fringe benefits to employees between 1 April and 31 March. If your benefits are fully exempt, you likely don’t need to lodge. However, if you’re already registered for FBT, confirm with your adviser whether a nil return is required.
And if you’re not sure whether something counts as a fringe benefit, that’s exactly the kind of question worth asking before the FBT year ends on 31 March.
Property development in Australia carries significant financial and tax risks at every stage of a project.
Between complex tax rules, high capital requirements, shifting regulations and long project cycles, success depends as much on strong financial control as it does on construction or design.
Obtaining tax advice in the planning stages of your development can help mitigate many of these risks. Once the project has commenced, many tax structuring opportunities disappear.
This guide walks through the key financial and tax considerations every Australian developer should understand before, during and after a project.
1. The Development Lifecycle
Every development follows a familiar journey: acquisition, planning, construction and completion. Each stage brings unique financial decisions and tax implications.
A well-structured accounting system underpins every stage, helping you track profitability, manage cashflow, and avoid costly tax mistakes.
Acquisition
- Site selection and feasibility
- Stamp duty, GST and due diligence costs
- Funding strategy – private, bank or JV
Planning & Design
- Architects, surveyors and planning consultants
- Feasibility modelling and scenario testing
- Reviewing entity structure before applications
Construction
- Progress claims, retentions and variations
- Budget control and cashflow forecasting
- GST-compliant invoicing and record-keeping
Completion & Exit
- GST margin scheme and settlement reporting
- Profit classification – income vs capital
- Refinance, distribution and reinvestment strategy
2. Structuring Your Development Business Correctly
The right structure is fundamental to managing risk, tax and profit distribution.
| Structure | Pros | Cons | Best suited for |
|---|---|---|---|
| Company (Pty Ltd) Separate legal entity. Flat 25% company tax rate. |
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Ongoing developer businesses and special purpose vehicles for single projects. |
| Trust Discretionary or unit trust. Flexible distributions. |
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Family developers, groups of investors, or long-term holding structures. |
| Partnership A simple arrangement between two or more parties to carry on business together. |
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Small-scale developments between individuals who know each other well. |
| Joint Venture (JV) Allows multiple parties to collaborate while keeping ownership separate. |
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Developers combining capital, land, or expertise for a single one-off project. |
| Special Purpose Vehicle (SPV) A dedicated entity created solely for one project. |
|
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Developers running multiple concurrent projects or investor syndicates. |
The right structure is fundamental to managing risk, tax and profit distribution.
👉 Related reading: Structuring Your Property Development Entity: SPV vs JV vs Trust
3. Tax & GST Compliance
Tax and GST obligations in property development are complex and getting them wrong can lead to major cashflow issues, penalties and disputes at settlement. This becomes even more important where you are subdividing land or changing the use of a property, as the tax and GST treatment can shift from capital to revenue, and from private use to a development enterprise.
- Determine whether your project is trading stock or capital — this drives GST rules.
- Apply correct GST treatment for acquisitions, construction costs and sales.
- Consider GST grouping for related entities to simplify reporting.
- Assess eligibility at the acquisition stage — not at settlement.
- Ensure contracts, invoices and documentation support margin scheme use.
- Model the impact early to forecast cashflow accurately.
- Track GST on progress claims, deposits and staged settlements.
- Reconcile GST credits and adjustments throughout the project lifecycle.
- Prepare accurate BAS to avoid underpayments or ATO reviews.
- Clarify whether the subdivision is a one-off realisation of a capital asset or a full development enterprise.
- Understand how subdivision can trigger GST registration, GST on sales and different income tax treatment.
- Review impact on CGT, main residence exemptions and land tax where applicable.
- Align legal structure, contracts and funding with the intended tax treatment before works commence.
👉 Related reading: Tax implications of subdividing land and small-scale developments
4. Cashflow & Budgeting
Cashflow is the lifeblood of any development — and mismanagement is one of the top causes of project failure. We track the money flows and buffers that matter most to keeping your project on track.
- Forecast
Live model of inflows and outflows from acquisition through to settlement. - Drawdowns
Funding and bank drawdowns aligned to milestones so the project never runs dry. - Contingency
Clear contingency buffers to absorb cost surprises without derailing returns. - Variance tracking
Variances against budget tracked in real time so issues are caught early.
👉 Related reading: How to Manage Cashflow Through a Property Development Project
5. Using Xero Effectively for Property Developers
Xero is a powerful accounting tool for developers, but it must be set up correctly to deliver useful insights for each project.
- Tailor accounts for land costs, construction expenses, consultant fees and project income.
- Avoid generic templates built for retailers or service businesses.
- Group costs to mirror how you report to lenders and investors.
- Assign each development its own tracking category or job code.
- View profitability by project, stage or entity at a glance.
- Keep shared overheads separate from project-specific costs.
- Ensure invoices, deposits and progress payments are coded correctly.
- Pay special attention where the GST margin scheme applies.
- Reconcile GST on funding costs, legal fees and consultant invoices.
- Use project profitability reports to track margins in real time.
- Monitor budget variances monthly and investigate exceptions.
- Use cashflow reports to forecast funding and settlement needs.
6. Avoiding Common Financial Mistajes
Even seasoned developers make avoidable accounting mistakes.
The risks usually show up late in the project (often just before or after settlement) when it’s hardest and most expensive to fix them.
- 1. Mixing project and personal finances.
- 2. Forgetting to register for GST early.
- 3. Using the wrong entity structure.
- 4. Overstating feasibility profits.
- 5. Failing to capture post-completion adjustments.
7. Exit Strategies & Profit Realisation
How you exit a development shapes your overall return, future tax exposure and capacity to fund the next project.
- Delivers immediate profit realisation but may trigger income tax.
- Consider timing around financial year-end for tax optimisation.
- Allows for potential capital growth and ongoing rental income.
- Requires careful management of CGT implications and refinance exposure.
- Frees up equity to seed future developments.
- Requires revisiting structure to keep new projects tax-efficient.
8. Case Study - A Small NSW Townhouse Project
A practical example of how structure, GST planning and cashflow management can significantly improve the outcome of a medium-sized development.
| Scenario | A developer purchases a $2 million block to build six townhouses valued at $6 million on completion. |
|---|---|
| Key steps |
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| Outcome | After completion and sales, the project delivered a profit of $1.2 million, with tax savings of approximately $120,000 through correct GST and structure planning. This example highlights the financial leverage available through proactive, project-specific accounting. |
9. Your Developer Accounting Checklist
Before you break ground, make sure you’ve covered the essentials across each phase of your development.
- Entity structure in place
- GST registration confirmed
- Feasibility model built
- Finance pre-approval
- Cashflow monitored monthly
- Xero tracking active
- Budgets reconciled
- BAS and GST lodged correctly
- Profit distribution planned
- Records archived
- Post-project review held
Every successful development team includes a financial strategist — not just a compliance accountant.
You generally need to register for GST once your annual turnover reaches the compulsory threshold, or you can choose to register voluntarily. Registering early can help with invoicing, claiming credits, and planning for growth.
Your ideal structure (sole trader, partnership, company, or trust) depends on how you plan to operate your business, who’s involved, and your risk and admin tolerance.
Many growing businesses prefer a company structure for liability protection and separation of assets. Talk to your accountant about the best structure for you.
The GST Margin Scheme allows GST to be calculated on the margin (sale price minus original purchase price) instead of the full sale price. It’s common in property transactions and can reduce GST payable if you meet the eligibility rules.
Profit is what your business earns after expenses, while cashflow is the actual movement of money in and out of your accounts. A business can show a profit yet still face cash shortages if timing of income and expenses isn’t managed.
Xero’s Projects feature lets you assign income, expenses, and time to individual projects, making it easier to see profitability across brands, product lines, or client jobs. It’s ideal for businesses managing multiple streams at once.
Staying on top of ATO deadlines is essential for individuals and businesses to avoid unnecessary stress, penalties, and cash flow issues. Missing key lodgement or payment dates can lead to fines or additional charges, which can impact your financial stability. At JD Scott + Co, we help clients stay organised and compliant with personalised accounting and tax services.
Monthly Lodgement and Payment Deadlines
For businesses lodging BAS or PAYG instalments monthly:
- 21st of Each Month:
- Monthly Installment Activity Statements (IAS) lodgement and payment.
- PAYG withholding payment due for the previous month.
Example: IAS for January 2026 must be lodged and paid by 21 February 2026.
Quarterly Lodgement and Payment Deadlines
For businesses and individuals lodging quarterly:
- 28 October 2025: First Quarter BAS and PAYG instalments (July–September 2025).
- 28 February 2026: Second Quarter BAS and PAYG instalments (October–December 2025). (Extended due date for agents lodging on behalf of clients).
- 28 April 2026: Third Quarter BAS and PAYG instalments (January–March 2026).
- 28 July 2026: Fourth Quarter BAS and PAYG instalments (April–June 2026).
Annual Lodgement and Payment Deadlines
- 31 October 2025:
- Deadline for individual tax returns if self-lodging without a registered tax agent.
- 15 May 2026:
- Extended lodgement date for individual and company tax returns if using a registered tax agent and meeting earlier lodgement criteria.
- 30 June 2026:
- Superannuation contributions must be received by this date to be deductible in the 2025–26 financial year.
Superannuation Deadlines
Employers must ensure Superannuation Guarantee (SG) contributions are paid quarterly:
- 28 October 2025: Quarter 1 (July–September 2024).
- 28 January 2026: Quarter 2 (October–December 2024).
- 28 April 2026: Quarter 3 (January–March 2025).
Payday Super
Please note that from 1 July 2026, employers will be required to pay employees’ super contributions at the same time as salary and wages. SG contributions will generally need to arrive in employees’ super funds within 7 business days of payday.
It’s important that business owners and payroll professionals are prepared for the coming changes. If you would like more information, see the ATO guidance here: Payday Superannuation.
Tax Payment Deadlines
- PAYG Instalments: Payments aligned with quarterly or monthly BAS deadlines.
- Income Tax Payment:
- Payment for individuals and businesses is typically due on the date specified in the Notice of Assessment.
Deadlines and Keynotes
| Quarter | Deadline | Obligation | Key Notes |
| Q1 | 28 January 2026 | Superannuation Guarantee (SG) payments | Ensure payments are received by funds by this date to avoid SGC penalties. |
| 28 February 2026 | BAS for December quarter, PAYG instalments | Late lodgements may attract penalties and interest. | |
| 31 March 2026 | Fringe Benefits Tax (FBT) year ends | Ensure FBT calculations are accurate for reporting. | |
| Q2 | 28 April 2026 | SG payments for Jan-Mar 2025 | Use the SBSCH or a clearing house for efficient processing. |
| 21 May 2026 | BAS for March quarter, PAYG instalments | Review GST credits and liabilities before submission. | |
| 30 June 2026 | End of Financial Year (EOFY) | Finalise payroll, lodge STP, and prepare for EOFY reporting. | |
| Q3 | 1 July 2026 | Payday Superannuation is introduced | Ensure super contributions are paid alongside salary/wages |
| 28 August 2026 | BAS for June quarter, PAYG instalments | Ensure accurate reporting for EOFY data included in this quarter. | |
| 30 September 2026 | Lodge Taxable Payments Annual Report (TPAR) | Required for specific industries like building, cleaning, or courier work. | |
| Q4 | 28 November 2026 | BAS for September quarter, PAYG instalments | Submit early to avoid last-minute technical issues with the ATO portal. |
| Annual | 31 October 2026 | Individual tax return deadline (self-lodged) | Submit on time to avoid penalties unless using a registered tax agent. |
| Annual | 15 May 2027 | Extended tax return deadline (via agent) | Only applicable if meeting prior lodgement and payment criteria. |
Important Notes for Lodgements and Payments
- Timely Submissions Prevent Penalties: Missing ATO deadlines can result in fines and interest charges.
- Plan for Processing Delays: Payments and lodgements must be completed by the due date. Allow additional time for bank processing or system delays, especially when using third-party platforms.
- Use Registered Tax Agents Wisely: If you engage a registered tax agent, you may be eligible for extended lodgement deadlines. Ensure all documents and information are provided to your agent well before the cut-off date.
- Monitor Superannuation Deadlines Closely: Superannuation contributions must be received by the employee’s fund by the due date to count as on time. Late payments may attract the Superannuation Guarantee Charge (SGC).
- Keep Records Up to Date: Accurate and detailed records of all financial transactions, payments, and correspondence with the ATO are essential for compliance and auditing purposes.
- Review Notices from the ATO: Notices and statements from the ATO often include specific deadlines. Mark these dates to avoid missing obligations.
Stay Ahead of Your Deadlines with JD Scott + Co
Navigating ATO deadlines can be overwhelming, but you don’t have to do it alone. At JD Scott + Co, we specialise in helping SME businesses manage their tax compliance obligations. From tracking lodgements to managing superannuation deadlines, our team ensures you stay compliant.
Let us handle the complexities so you can avoid penalties and streamline your financial processes. Contact JD Scott + Co today to learn how our accounting services can keep you on track for success.
We also put up monthly reminders of ATO deadlines on our social media pages: LinkedIn, Facebook and Instagram. Follow us to stay up-to-date.
Every tax season, Australians scramble to collect receipts, log expenses, and ask the big question: “Can I claim that as a deduction?”
You’ll also see headlines urging you to “claim everything you can this tax season.” But despite how often deductions are discussed, many people still misunderstand how tax deductions work.
Some believe deductions mean “free money” from the government. Others think they’ll get a full refund for every dollar they spend.
That’s not how it works. Tax deductions don’t give you the full amount back. They simply reduce your taxable income.
Let’s break down exactly how tax deductions work in Australia, why your refund isn’t a bonus from the ATO, and what deductions mean for individuals and companies.
So, What is a Tax Deduction?
A tax deduction is an expense that the Australian Taxation Office (ATO) allows you to subtract from your total income before calculating how much tax you owe. In other words, deductions reduce the portion of your income that gets taxed, not your tax bill directly.
Here’s what most people misunderstand:
A $1,000 deduction doesn’t mean you get $1,000 back.
It means your taxable income is $1,000 lower, which only reduces your tax by your marginal tax rate.
For example:
• If you earn $80,000 a year, your marginal tax rate is 32.5%.
• If you claim a $1,000 deduction, you’ll save $325 in tax (because 32.5% of $1,000 = $325).
• You don’t get the full $1,000 back — you just pay $325 less in tax.
So, the value of a deduction depends on your tax bracket. Someone on a higher income may benefit more from the same deduction than someone earning less.
Why You Get a Tax Refund
Many people think: “My accountant got me a huge refund!”
In reality, a tax refund usually means you overpaid tax during the year.
If you’re an employee:
Your employer withholds PAYG tax from your salary.
The amount withheld is an estimate.
When you lodge your return, the ATO calculates your actual tax liability.
If you paid too much → You get a refund.
If you paid too little → You owe money.
A refund is not a reward.
It’s simply your own money being returned.
Understanding this is key to understanding how tax deductions and refunds actually work together.
What Can You Actually Claim as a Tax Deduction?
The ATO’s golden rule is that an expense is deductible only if it is directly related to earning your income.
Common legitimate deductions include:
- Work-related expenses (e.g., tools, uniforms, protective gear)
- Self-education costs that maintain or improve skills for your current job
- Vehicle or travel costs (if used for work, not commuting)
- Home office expenses (if you work from home and keep records)
- Charitable donations to registered organisations
But not everything you use at work is deductible and personal expenses never are. As an example:
- Ordinary clothing (even if you wear it to work) is not deductible.
- The daily commute from home to work is not deductible.
- Coffee meetings and meals are usually not deductible unless clearly business-related.
Always keep detailed records and receipts of claims made. The ATO is increasingly data-matching and auditing claims that seem inflated or inconsistent with your occupation.
Deductions and Tax Rates for Companies
For companies, the concept is similar but the calculations differ slightly because businesses pay a flat tax rate.
As of the 2025–26 financial year:
- Base rate entities (companies with less than $50 million turnover) pay 25% tax.
- Larger companies pay 30% tax.
Example:
If your company earns $100,000 in profit before tax and claims $20,000 in deductible expenses, taxable income becomes $80,000.
At a 25% rate, tax payable = $20,000.
So again, the deduction doesn’t refund the full amount but it reduces taxable income, which reduces the tax bill by 25% of the expense.
In this case:
- $20,000 in deductions × 25% = $5,000 in tax saved.
You still spent $20,000, but your tax bill is $5,000 lower.
What If Your Business Makes a Loss?
If your company makes a loss (meaning your deductions exceed your income) you don’t pay tax that year.
However, the loss isn’t wasted. In most cases, it can generally be carried forward to future years and offset against future profits.
For example:
- Year 1: $30,000 tax loss
- Year 2: $80,000 taxable income
→ You can carry forward the $30,000 loss, reducing taxable income in Year 2 to $50,000.
At a 25% company tax rate, that saves $7,500 in tax when the business becomes profitable.
Some entities, like trusts, have more complex loss rules. You often need to meet specific ownership or continuity tests to use carried-forward losses.
The Difference Between Deductions, Offsets, and Credits
It’s also important to distinguish deductions from offsets and credits:
- Deductions reduce your taxable income.
- Offsets reduce your tax payable (dollar for dollar).
- Credits are payments that directly reduce your tax bill (like franking credits or PAYG withheld amounts).
For instance, a $1,000 deduction might save you $325 if your marginal tax rate is 32.5%.
But a $1,000 tax offset saves you the full $1,000 because it directly cuts the amount of tax you owe.
Understanding the difference helps you see why not all “tax benefits” are created equal.
Key Takeaways
- Deductions reduce taxable income, not tax directly. You only save tax equal to your marginal rate.
- Refunds are repayments of overpaid tax, not “bonuses” from the ATO.
- Business deductions work the same way — they lower taxable profit, saving tax at the company rate.
- Losses can be carried forward to reduce tax in future profitable years.
- Claim only legitimate expenses directly related to earning income — and keep records.
Tax deductions are helpful in lowering your tax bill, but they are often misunderstood. Claiming every legitimate deduction you’re entitled to is smart; spending money just to “get a deduction” is not.
Whether you’re an employee, sole trader, or company director, the goal isn’t to chase refunds — it’s to ensure you’re paying the right amount of tax, no more and no less.
And remember: if your accountant “gets you a refund,” it’s not magic. It’s the difference between tax payable and tax paid.
On 13 October 2025, the Government announced important changes to the Better Targeted Superannuation Concessions (BTSC) measure after strong industry feedback.
What are the Changes?
The key change is that the new super tax will now apply only to realised earnings, not unrealised gains. This is a major shift that addresses one of the biggest concerns raised by superannuation funds and advisers.
From 1 July 2026, Division 296 will introduce an additional tax on earnings from superannuation balances above $3 million. The updated structure will be:
- Balances between $3 million and $10 million: 30% total tax on the proportion of earnings in this threshold;
- Balances above $10 million: 40% total tax on earnings above the threshold; and
- Both thresholds will be indexed to inflation.
The biggest improvement is that the new tax will only apply to realised earnings, meaning you will only be taxed when an asset is sold, or cash is received. Under the original proposal, the tax would have applied to unrealised gains, meaning people could have faced a tax bill even if they hadn’t sold any assets or received any cash.
Previously, if a super fund owned a property worth $4 million that went up in value by $500,000 in a year, the fund could have been taxed on that unrealised gain even though the property wasn’t sold and no cash was available to pay the tax. Under the revised version, the tax will only apply when the asset is sold, and the gain is realised.
This change brings the proposal back in line with normal tax principles and removes the risk of people being forced to sell assets just to cover a tax bill.
Division 296 will mainly affect people with superannuation balances above $3 million, typically high-net-worth individuals, business owners, self-managed super fund members and professionals with large employer contributions. It is estimated that this includes less than 90,000 superannuation accounts (ABC News, 2025). The addition of indexation means these thresholds will rise over time so that the measure continues to target only very large balances.
Overall, those with large super balances should still review their super structure and long-term plans before 1 July 2026 to understand the potential impact and prepare early.
Issues
There are still unanswered questions regarding the proposed changes. For example, how does CGT discounting apply to the new thresholds?
It will also require changes to the ATO Self-Managed Superannuation Fund (SMSF) reporting forms because while member balances are reported, splits between unrealised and unrealised gains will need to be split out and reported separately to the ATO.
Finally these changes will make it tax inefficient to hold investment assets in a superannuation fund – especially for those funds with balances over $10 million. Members will be better off holding their investment balances in a company or via a trust structure.
Running an ecommerce business in Australia means getting GST compliance right from day one. From Shopify to Amazon, your GST obligations can get complicated fast, especially when selling across borders or using multiple payment platforms.
At JD Scott + Co, we specialise in ecommerce accounting and tax compliance for online sellers. This guide explains everything you need to know about how GST works for ecommerce businesses, plus practical steps to stay compliant and maximise your profits.
What Is GST and When Does It Apply to Ecommerce Businesses?
The Goods and Services Tax (GST) is a 10% tax on most goods and services sold in Australia. Read more about when you need to register for GST here.
If your ecommerce business has a turnover above $75,000 per year, you must register for GST with the Australian Taxation Office (ATO).
GST applies to:
Products sold through Shopify, WooCommerce, Amazon, or your own website
Digital products, online courses, and subscriptions
Marketplace transactions covered under “GST on low-value imported goods”
💡 Tip: Even if you’re under the $75,000 threshold, registering voluntarily can let you claim input tax credits on business expenses.
GST for International & Cross-Border Ecommerce Sales
If you sell to overseas customers or import goods into Australia, the GST treatment changes depending on where your buyers and suppliers are located.
Exports
Goods exported from Australia within 60 days of payment or invoice are generally GST-free.
You must keep documentary evidence showing that goods were exported within the required period.
Imports
GST may be payable at customs or through your freight forwarder.
Keep import declarations to claim GST credits later.
Foreign Sellers to Australia
Overseas sellers may need to register for GST under the low-value imported goods regime.
Keeping accurate and automated records is your best protection against ATO penalties.
How to Register for GST as an Ecommerce Business
You can register for GST online via the ATO Business Portal or through your accountant.
You’ll need:
ABN (Australian Business Number)
Business details and structure
Expected annual turnover
Bank details
Once registered, you must:
Charge GST on taxable sales
Issue tax invoices showing GST clearly
Lodge Business Activity Statements (BAS) (usually quarterly)
Remit GST to the ATO, minus credits on eligible purchases
GST Exports: Rules, Conditions & Best Practice
Selling internationally can boost your growth — and exports may be GST-free, provided you meet ATO rules.
When Are Exports GST-Free?
Goods exported within 60 days of invoice or payment
Services provided to overseas clients for use outside Australia
Relevant ATO provisions:
Section 38-185 (exports of goods)
Section 38-190 (supplies for consumption outside Australia)
GSTR 2002/6 and GSTR 2025/2
Key Conditions
Goods must leave Australia within 60 days after invoice/payment
You may apply for ATO extension if delays occur
For services, GST-free status depends on where the benefit is enjoyed
Evidence You Must Keep
Export documentation (bill of lading, airway bill)
Customs declarations or export clearances
Proof goods left Australia within 60 days
Invoices, contracts, and payment receipts
For services — evidence of overseas use
⚠️ Without proper proof, the ATO can disallow GST-free status and demand back payments.
Claiming GST Credits on Inputs
Even when sales are GST-free, you can still claim input tax credits for expenses like:
Materials, packaging, and shipping
Software and ecommerce tools
Marketing and advertising
Visit the ATO Law Database for detailed rulings and updates.
Common Ecommerce GST Mistakes
Avoid these common GST traps:
Not registering when turnover exceeds $75,000
Incorrect GST setup in Shopify or WooCommerce
Forgetting GST on freight
Not reconciling payment gateway fees
Claiming GST-free exports without documentation
✅ Pro Tip: Use an experienced ecommerce accountant to automate GST tracking and reconciliation.
GST and Ecommerce Platforms
Shopify: How to Set Up GST Correctly
Shopify doesn’t automatically manage GST for Australian sellers. You’ll need to configure your settings carefully.
Step-by-step:
Enable GST Collection:
Settings → Taxes and Duties → Regions → Australia → Enter ABN → Collect GST.Include GST in Prices:
Display GST-inclusive pricing (e.g., $110 includes $10 GST).Charge Tax on Shipping:
Ensure freight charges include GST.Update Invoice Templates:
Add business name, ABN, address, and GST amounts.Integrate with Xero:
Use Shopify + Xero to sync sales and GST automatically.
Avoid:
❌ Missing GST on shipping
❌ Mismatched tax settings
❌ Ignoring platform or payment fees
Amazon and WooCommerce
Amazon:
Amazon may collect and remit GST for some marketplace sales, but you must still ensure your BAS reports match ATO data, especially for direct website sales.
WooCommerce:
Use plugins like WooCommerce Tax or AvaTax. Set your default tax rate to 10% and confirm GST applies to both products and shipping.
Key Takeaways
| Area | What You Need to Know |
|---|---|
| GST Threshold | Register if turnover > $75,000/year |
| GST Rate | 10% on most goods and services |
| Exports | GST‑free if shipped within 60 days and you keep proof |
| Bookkeeping | Integrate Shopify + Xero to stay ATO‑ready |
| Expert Help | Use an ecommerce accountant to avoid ATO issues |
How JD Scott + Co Helps Ecommerce Businesses
We offer:
GST registration and BAS lodgement
Shopify, Amazon, and Xero integration
Cross-border tax advice
Automated bookkeeping
Strategic tax planning for ecommerce growth
Final Thoughts
Getting GST right is essential for every online seller in Australia. Whether you’re running a Shopify store or selling internationally, correct GST setup and documentation protect your business from ATO risk.
At JD Scott + Co, our Sydney ecommerce accountants help you stay compliant, save time, and grow confidently.
📞 Contact Us today to get started.
Hiring your first, second or even 10th employee is a key decision for any small business owner. But when is the right time to bring someone on board?
Hiring a new staff member at the right time can accelerate growth, improve customer service and reduce stress on the business owner. Hiring too early, or without adequate planning can create unnecessary costs and inefficiencies. Even worse, it can make a profitable business suddenly unprofitable.
So how do you know when the timing is right to hire a new staff member? The following guide outlines the key indicators that suggest your business is ready to take the next leap and hire new staff.
Workload Is Approaching or Beyond Capacity
One of the clearest signals that it is time to hire is when demand consistently exceeds your capacity to deliver. If you find yourself:
- Turning away new clients because you cannot manage the workload
- Struggling to meet deadlines despite working long hours
- Spending too much time on urgent tasks instead of long-term growth
…it may be time to bring on additional help.
Occasional busy periods (such as year-end for accounting firms) do not always justify a hire. When pressure outweighs the usual culture and expectation consistently, it’s time to think about increasing your headcount.
Financial Stability Supports the Hire
Even if the workload is high, hiring should only occur when the business has the financial stability to sustain wages and associated costs. In Australia, this includes not only salary but also superannuation contributions, workers compensation insurance, leave entitlements and other on costs.
A clear financial forecast is essential before making a hiring decision and setting and appropriate budget for a salary. Business owners should ask:
- Can the business consistently afford wages for at least the next 6–12 months?
- Will the hire directly or indirectly generate enough value to cover their cost?
- Is there a buffer in place to manage seasonal fluctuations or slower months?
Hiring is best timed when revenue streams are predictable, and cash flow is stable over time. You don’t want to be in a situation where you hire a new employee, only to find out they are not covering costs 6-12 months later.
You’re Neglecting Tasks…
Small business owners wear many hats at the same time such as sales, administration, customer engagement, operations, and finance. While this is natural in the early phases, it becomes unsustainable as the business grows. If critical tasks are consistently delayed, rushed, or overlooked, this may be a strong sign that additional support is required.
An employee can free up the owner’s time to focus on the areas where their expertise creates the most value. For example, if an owner is spending 15 hours a week on administration, those hours could be reinvested into a different role. This could focus on strategic planning, sales growth, or innovation once an employee is hired.
A great book on this subject is called Buy Back Your Time- a great read to thinking about time management and leveraging others to complete tasks when you lack the capacity.
You Miss Opportunities for Growth
Businesses often face a pivotal moment where opportunities for expansion are visible but unachievable without more headcount. This might include:
- Entering new markets
- Launching additional products or services
- Scaling marketing campaigns
- Taking on larger contracts or projects
If the only barrier to growth is capacity, then the strategic hire of an employee can unlock that next stage of development. While this does create additional expenses, the return on investment can be significant if managed carefully.
You Want to Hire-in Skills
Next, if your business is growing, you may want to up skill your team. Maybe you require a staff member with highly technical tax knowledge (for accounting firms), or perhaps you are in recruitment and want to expand into a specific niche (eg. medical recruitment). In other cases, you might be running a marketing agency that needs a content strategist with deep SEO expertise, or a tech company that’s ready to bring in a developer who specializes in a new programming language or platform.
Hiring-in skills can help you move into areas that would otherwise take your existing team months—or even years—to master. It’s often the fastest way to accelerate growth, fill knowledge gaps, and stay competitive in industries where expertise evolves quickly. By strategically choosing which skills to hire, you ensure your business can take on more complex projects, offer new services, and strengthen its overall market position.
The Business is Reliant on the Business Owner
Do you have a job or a business? If your business relies to heavily on you (the business owner) then you have a job. If you’re looking to grow your business into an asset (something that works without you) it may be time to hire. If you’re the business, this can create risk. If the owner falls ill, takes leave, or needs to step back temporarily, the business may grind to a halt.
Hiring an employee can reduce dependency on the owner, create resilience in operations, and allow for succession planning. It also provides the owner with the freedom to step away from day to day tasks and transition into strategic management of the business.
Think you are ready to make a hiring decision? Read our next article where we pull together a checklist of everything you need to onboard an employee successfully!
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JD Scott + Co is one of Sydney’s leading Chartered Accounting firms, we aim to help build your business and wealth, empowering you to reach your goals.
