The Reserve Bank of Australia (RBA) has announced a significant reform that will reshape the way businesses process payments. From 1 October 2026, all surcharges on credit and debit card payments made through eftpos, Visa, and Mastercard will be prohibited across Australia.

For many businesses, card surcharges have become a common way to recover merchant payment costs. However, these new regulations aim to simplify pricing, improve transparency, and reduce payment costs across the economy.

If your business currently applies card surcharges, now is the time to start preparing.

Why Is the RBA Banning Card Surcharges?

According to the RBA, Australian consumers pay approximately $1.6 billion annually in card surcharges. At the same time, businesses incur even greater costs when accepting electronic payments.

The reform package is designed to:

• Eliminate unexpected checkout fees for consumers
• Reduce overall payment processing costs for businesses
• Improve transparency in the payments industry
• Encourage competition among payment providers
• Create a simpler and fairer pricing system

The RBA estimates that merchant payment costs could fall by approximately $910 million per year, with small businesses expected to benefit the most.

What Is Changing From 1 October 2026?

The new payment reforms consist of three key changes.

1. Card Surcharges Will Be Banned

From 1 October 2026, businesses will no longer be permitted to charge additional fees for payments made using:

• eftpos
• Visa
• Mastercard
• Related payment networks

This applies whether customers pay:

• In-store
• Online
• Through mobile wallets
• Via integrated payment systems

Customers must see a single final price without additional card payment charges being added at checkout.

2. Lower Interchange Fees

Interchange fees are wholesale charges exchanged between financial institutions when card payments are processed.

Under the new reforms:

• Existing fee caps will be reduced
• New limits will apply to foreign-issued cards
• Payment acceptance costs should decrease for merchants

Lower interchange fees are expected to reduce the overall cost of accepting card payments, helping businesses offset the loss of surcharge revenue.

3. Increased Fee Transparency

Banks, payment providers, and card schemes will be required to provide clearer information regarding:

• Merchant service fees
• Processing costs
• Fee structures
• Provider margins

Payment providers must also demonstrate how wholesale fee reductions are being passed on to businesses.

This increased transparency should make it easier for business owners to compare providers, negotiate better rates, and make informed decisions about their payment systems.

The reforms will be supported by oversight from the Australian Competition and Consumer Commission (ACCC) and guidance from the Australian Small Business and Family Enterprise Ombudsman.

How Businesses Should Prepare for the Card Surcharge Ban

Although the changes do not take effect until October 2026, businesses should begin reviewing their payment arrangements well in advance.

Review Your Merchant Fees

Start by examining your merchant statements and identifying:

• Current card acceptance costs
• Monthly processing fees
• Revenue generated from surcharges
• The overall impact on business margins

If surcharges currently help offset payment processing costs, you may need to review your pricing strategy to maintain profitability.

Speak With Your Payment Provider

The upcoming reforms create an opportunity to revisit your arrangements with your payment provider. As interchange fees are expected to decrease and fee transparency increases, businesses may be able to negotiate lower merchant service fees, more competitive pricing plans, or upgraded payment technology. Small businesses, which often pay higher effective processing rates, may stand to benefit the most from these discussions.

Update Your Pricing and POS Systems

Before the implementation date, businesses will need to remove:

• Card surcharge notices
• Checkout surcharge settings
• Automatic percentage-based fees
• Separate payment processing charges

All displayed prices must become fully inclusive.

Review both physical and online sales channels to ensure compliance with the new requirements.

Factor the Changes Into Cash Flow Planning

While lower merchant costs may not be immediate, many businesses are expected to experience savings during the 2026–27 financial year.

Industries that process large volumes of small transactions may see the greatest impact, including:

• Cafés
• Restaurants
• Retail stores
• Trade businesses
• Service-based businesses

Now is a good time to update budgets and financial forecasts to account for the expected changes.

Monitor Customer Payment Behaviour

The removal of surcharges may encourage more customers to choose card payments rather than cash. This could improve convenience, speed up transactions, and reduce the need for cash handling. However, businesses should continue monitoring their payment costs as customer behavior changes to ensure any increase in card usage does not offset the savings generated by lower merchant fees.

The Broader Impact on Australian Businesses

Ultimately, this reform creates a more level playing field across the Australian economy. 

For businesses that never charged a surcharge will immediately benefit from lower underlying merchant fees, boosting your profitability. 

For businesses that did charge a surcharge will enjoy far simpler daily operations, less administrative friction, and zero compliance risks. 

Over time, this regulatory shakeup is expected to drive intense competition among payment providers, paving the way for superior financial products and even lower fees across the market. While banks may adjust secondary features like credit card rewards programs to offset their losses, the combined effort of the RBA and ACCC ensures savings are distributed fairly to businesses and consumers alike.

Final Thoughts

The end of card surcharges represents one of the most significant payment reforms in Australia in recent years.

For consumers, it means simpler pricing and fewer surprises at checkout. For businesses, it presents an opportunity to reduce complexity, improve operational efficiency, and potentially lower payment costs.

The key is preparation. Reviewing your payment arrangements now can help ensure a smooth transition before the 1 October 2026 deadline.

If you are unsure how these changes may affect your business, professional advice can help you assess merchant fees, evaluate pricing strategies, and identify opportunities to reduce costs before the new rules take effect.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Nora Pham @ Pitt Martin Tax

The 2026 Federal Budget tax updates have introduced changes to several key tax proposals announced by the Federal Government. The Budget was delivered on 12 May 2026 and included major changes to capital gains tax (CGT), discretionary trusts and self-managed superannuation funds (SMSFs).

Since then, the Government has reviewed feedback from businesses, tax professionals and industry groups. As a result, several key proposals have been amended. These Federal Budget 2026 tax updates provide important information for taxpayers, investors, business owners and trustees planning for future changes.

Federal Budget Tax Updates: Capital Gains

One of the biggest Budget announcements was a change to the current 50% CGT discount. Under the proposal, individuals and trusts would use an indexation system instead. A new 30% minimum tax rate would also apply to capital gains that accrue from 1 July 2027, with limited exceptions.

The Government has now announced a new Innovative Business CGT Concession. The concession aims to encourage more investment in Australian start-ups. Eligible investors, founders and employee share scheme participants could still receive the 50% CGT discount. The Government has released a consultation paper on how the concession will operate.

In addition, small businesses will also benefit from another proposed change. From 1 July 2027, the turnover limit for the 50% active asset reduction will increase. It will rise from $2 million to $10 million.

However, the other three small business CGT concessions will not change. These include the 15-year exemption, retirement exemption and small business rollover. The current $2 million turnover test will still apply. Businesses may still qualify. They need to meet the existing $6 million net asset value test.

Federal Budget Tax Updates: Trusts

The original Budget proposed a 30% minimum tax rate for discretionary trusts from 1 July 2028. Under that proposal, many testamentary trusts would have fallen within the new rules.

The Government has now changed its approach. It plans to exempt all testamentary trusts that exist for genuine testamentary purposes.

The exemption will only apply to income earned from assets that come from the deceased estate. For testamentary discretionary trusts created on or after 1 July 2028, only individuals and income tax-exempt entities can be beneficiaries if the trust is to qualify.

Federal Budget Tax Updates: SMSF’s

The Government has also announced changes for self-managed superannuation funds.

The Government also plans to change SMSF borrowing rules. Under the proposal, SMSFs could no longer use Limited Recourse Borrowing Arrangements (LRBAs) to buy residential property.

Existing borrowing arrangements are expected to remain in place under grandfathering provisions. However, new residential property borrowing through LRBAs would no longer be available once the changes begin.

What Should You Do Next?

These tax proposals could affect investment decisions, business structures, estate planning and superannuation strategies. Although the Government has already revised several measures, more changes may occur before Parliament passes the legislation.

If you own a business, invest through a trust or manage an SMSF, now is a good time to review your position. Understanding the proposed rules now can help you plan ahead.

We will continue to monitor the legislation and provide updates as more information becomes available. If you would like to discuss how these proposed reforms could affect you, please contact our team.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Alex Cramery @ Pitt Martin Tax

The Australian Taxation Office (ATO) is increasing its focus on how taxpayers who earn income from their personal skills, knowledge and expertise manage and distribute that income for tax purposes.

The ATO has recently released Practical Compliance Guideline PCG 2025/5, which outlines its compliance approach to arrangements involving the “alienation” of Personal Services Income (PSI). These arrangements generally involve income earned through an individual’s personal efforts being received by a company, trust or another entity instead of being directly recognised as the individual’s income.

Operating through a company or trust is common and can provide legitimate commercial advantages, including asset protection, business flexibility and succession planning. However, where income is mainly generated from one individual’s personal services, business owners should carefully consider whether their current arrangements remain appropriate under the ATO’s updated guidance.

Why Is the ATO Focusing on PSI Arrangements?

Many professionals and business owners use companies or trusts for valid commercial reasons. However, the ATO is concerned about arrangements where income generated from an individual’s skills, reputation or labour is redirected to other entities primarily to achieve a more favourable tax outcome.

The PSI rules aim to ensure that income generated mainly from an individual’s personal efforts is appropriately taxed. Although some businesses may qualify as a Personal Services Business (PSB) and fall outside certain PSI attribution rules, this does not mean the arrangement is automatically protected from ATO review.

The ATO has also highlighted that Part IVA general anti-avoidance provisions may apply where arrangements are implemented mainly to obtain a tax benefit. If Part IVA applies, taxpayers may face additional tax liabilities, penalties and interest charges.

What Arrangements Are Considered Lower Risk?

Under PCG 2025/5, the ATO considers whether the individual who performs the work receives an appropriate share of the financial benefits generated from those services.

An arrangement is generally more likely to be considered lower risk where:

• The individual receives most of the economic benefit through salary, wages, bonuses, director fees or appropriate trust distributions.
• Profits retained in a company are supported by genuine short-term commercial reasons.
• Payments made to family members or related parties reflect reasonable amounts for actual services provided.

For example, retaining company profits to fund equipment purchases, business expansion or other short-term commercial needs may be acceptable where there is clear evidence supporting the purpose and the company follows through with those plans.

What May Attract ATO Attention?

The ATO has identified several behaviours that may increase compliance risk, including:

• Splitting income with family members or related parties who have made little or no contribution to earning that income.
• Retaining significant company profits without a genuine commercial purpose.
• Allocating profits from personal services to entities or beneficiaries mainly because they have lower tax rates or available tax losses.

The key consideration is whether the person receiving the benefit has a genuine connection to the income generated.

Where there is a significant mismatch between the individual performing the work and the person ultimately taxed on the profits, the arrangement is more likely to attract ATO scrutiny.

Time to Review Existing Arrangements

The ATO has provided a transition period for taxpayers who genuinely review and adjust their arrangements.

Businesses that take genuine steps to move from higher-risk arrangements to lower-risk arrangements by 30 June 2027 are unlikely to face Part IVA compliance action in relation to those arrangements if reviewed by the ATO.

This transition period is not an automatic exemption or amnesty. Instead, it provides an opportunity for business owners to proactively assess their structures and make changes where necessary.

What Should Business Owners Do?

Business owners who operate through companies or trusts and derive income mainly from their own personal skills or efforts should review their current arrangements.

Consider the following questions:

• Are retained profits supported by documented short-term commercial reasons?
• Are payments to family members or related parties commercially reasonable and supported by genuine work performed?
• Does the current structure appropriately reflect the contribution made by the individual generating the income?
• Would the arrangement withstand ATO review?

With increased ATO attention on PSI arrangements, reviewing existing structures now can help identify potential issues early and reduce future compliance risks.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Yvonne Shao @ Pitt Martin Tax

With the 2026–27 financial year now underway, this SMSF 2026–27 checklist highlights the key actions trustees should take to keep their funds compliant and well positioned. Completing the items in this SMSF 2026–27 checklist early can help reduce year-end pressure, minimize compliance risks and identify valuable planning opportunities. The checklist below summarizes the major legislative changes, reporting obligations and practical considerations trustees should review during the new financial year.

1. Review Transfer Balance Cap and Pension Planning

• General transfer balance cap increases: From 1 July 2026, the general transfer balance cap (TBC) rises from $2.0 million to $2.1 million. Trustees should determine whether members are entitled to additional personal TBC indexation, particularly where retirement pensions commenced before previous indexation dates.

Although the Australian Taxation Office (ATO) calculates each member’s personal transfer balance cap, its assessment depends on transfer balance account (TBA) events that have already been reported. Pension commencements, commutations and other reportable transactions completed before 30 June 2026 should therefore be lodged promptly to ensure any entitlement to indexation is calculated accurately.

• Review legacy pensions: The temporary five-year measure allowing certain legacy pensions to be exited remains available between 7 December 2024 and 6 December 2029. Trustees responsible for lifetime, life expectancy or market-linked pensions should first confirm that the trust deed authorises the proposed strategy. Any decision should also consider the potential impact of Division 296 together with the relevant commutation requirements before implementation.

2. Updating Contribution Strategies in the SMSF 2026–27 Checklist

• Contribution caps have increased: From the 2026–27 financial year, the concessional contribution cap becomes $32,500 while the standard non-concessional contribution cap increases to $130,000. Eligibility to make non-concessional contributions remains subject to the member’s total superannuation balance (TSB) at 30 June 2026 being below $2.1 million. Trustees should review planned contributions carefully to reduce the likelihood of exceeding applicable caps.

• Check bring-forward eligibility: Before applying the bring-forward provisions during 2026–27, trustees should confirm each member’s TSB at 30 June 2026 because both eligibility thresholds and available bring-forward periods have changed.

The increase in the standard non-concessional cap also raises the maximum bring-forward amount from $360,000 to $390,000. However, members who activated the bring-forward provisions during either the 2024–25 or 2025–26 financial years do not automatically gain access to this higher contribution limit.

3. Monitor Pension Requirements and ECPI Risks

• Meet annual pension obligations: Trustees should verify that each pension satisfies the minimum annual payment requirements based on the member’s age. Failure to pay the required minimum amount before year-end may affect pension compliance and jeopardise the fund’s entitlement to exempt current pension income.

Members receiving a transition to retirement income stream should also ensure total annual withdrawals remain within both the minimum and 10% maximum payment limits. Where a member turns 65 during 2026–27, the income stream automatically enters retirement phase, potentially affecting their transfer balance cap position. Professional advice before that milestone may help avoid unintended outcomes.

• Follow correct pension procedures: Pension commencements and commutations should always be completed using the required administrative processes. Errors may trigger additional transfer balance account events or unexpected tax consequences. Trustees should also ensure all reportable TBA events are lodged with the ATO within the prescribed reporting deadlines.

4. Related-Party Loan Reviews in the SMSF 2026–27 Checklist

• Confirm related-party loan compliance: Trustees with related-party borrowing arrangements should review the requirements outlined in ATO Practical Compliance Guideline PCG 2016/5. This guideline sets out the conditions that generally need to be satisfied for a loan to fall within the ATO’s safe harbour provisions, including benchmark interest rates and other commercial terms.

The applicable interest rate should be reviewed each year using the benchmark released during May immediately before the start of the new financial year. For the 2025–26 financial year, the safe harbour rates were 8.95% for property loans and 10.95% for loans relating to listed securities.

Following recent increases in the Reserve Bank of Australia’s cash rate, the benchmark interest rates have increased to 9.35% for property-backed loans and 11.35% for listed securities. Trustees relying on the safe harbour provisions should recalculate minimum repayments to ensure loan arrangements remain compliant throughout the 2026–27 financial year.

5. Review Payroll and Super Contribution Processes

• Ensure New Payments Platform readiness: From 1 July 2026, employers and superannuation funds must be capable of receiving contributions through the New Payments Platform (NPP). Trustees should verify that the fund’s nominated bank account supports Osko, PayID and other approved NPP payment methods so employer contributions can be processed without disruption.

• Prepare for Member Verification Requests: Employers will begin using Member Verification Requests (MVRs) to confirm whether an SMSF can accept employer contributions before payments are made. Trustees should ensure these requests can be monitored and answered within the required timeframe.

Generally, SuperStream messages are received through the administration platform used by the fund’s accountant or administrator. Members should therefore advise their SMSF adviser whenever an employer intends to submit an MVR so the request can be identified and managed promptly.

• Review obligations for closely held employees: Where an SMSF receives employer contributions for related employees, trustees should determine whether any available SuperStream exemptions apply and confirm payroll systems comply with the latest reporting obligations. Late lodgements may result in penalties. Trustees should also remember that overdue SMSF Annual Returns may cause the ATO to remove the fund from the SMSF Lookup register, preventing employers from directing compulsory contributions to the fund until its compliance status is restored.

6. Consider Division 296 Transitional Rules

• Assess transitional arrangements carefully: The 2026–27 financial year introduces specific transitional provisions for Division 296, with the relevant total superannuation balance measured at 30 June 2027. Trustees should evaluate whether adopting a Division 296 cost base based on market values at 30 June 2026 would be appropriate for the fund’s circumstances.

This election is not required until the 2027 SMSF Annual Return is lodged. However, because it applies to all eligible fund assets and may influence future capital gains, capital losses and subsequent tax calculations, trustees should fully understand its consequences before proceeding. Professional advice is strongly recommended before making the election.

7. Finish Your SMSF 2026–27 Checklist with Good Housekeeping Practices

• Review trustee structure and documentation: Funds operating with individual trustees may wish to consider whether moving to a corporate trustee structure would provide governance or administrative benefits. Any structural changes should be discussed with an adviser and reported to the ATO, ASIC and other relevant authorities within the required timeframes.

• Maintain thorough records: Trustees should retain comprehensive documentation supporting trustee decisions, market valuations, contribution timing, elections, employer correspondence and other significant transactions. Well-maintained records assist with the annual audit process and provide valuable evidence if the ATO reviews the fund.

Taking action early can help minimise year-end stress and reduce compliance risks. Please contact us if you would like to discuss any of the matters outlined above or how they may affect your SMSF.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

From 1 July 2026, one of the biggest reforms to Australia’s superannuation system has officially taken effect. Under the new Payday Super rules, employers must ensure that superannuation contributions are received by employees’ super funds within seven business days of each payday.

This marks a significant shift from the previous quarterly payment system. While the reform aims to improve retirement outcomes for employees by ensuring super is paid sooner, it also introduces new payroll, cash flow and compliance obligations for businesses.

Whether you’re a small business owner or a larger employer, understanding the new requirements is essential to avoid penalties and maintain compliance.

What Is Payday Super?

Under the previous rules, employers generally had until 28 days after the end of each quarter to make super contributions. Under the new Payday Super system, the clock starts on each “Qualifying Earnings” (QE) day – which is essentially your payday for salary, wages, commissions, bonuses, and certain contractor payments.

Key Payday Super Requirements

• Strict 7-Day Window: Contributions must be received and allocated to the employee’s fund within 7 business days of payday (with very limited exceptions).
• Per-Payday Calculations: Shortfalls are now calculated per QE day rather than quarterly.
• Clearing House Updates: The ATO’s Small Business Superannuation Clearing House has officially closed. Businesses previously using this service must now transition to a SuperStream-compliant alternative.

Penalties for Non-Compliance

The Australian Taxation Office (ATO) has introduced stronger enforcement measures under Payday Super.

Employers who fail to meet their obligations may face:

• Superannuation Guarantee Charge (SGC) liabilities
• Administrative penalties of up to 60% of the super shortfall
• Additional interest and compliance costs

However, employers who voluntarily disclose mistakes early and take prompt corrective action may be eligible for reduced penalties.

During the first year of implementation, the ATO’s compliance approach under PCG 2026/1 focuses on businesses that make genuine efforts to comply. Employers who actively address issues are generally considered lower risk, although employee complaints will still be investigated.

The June – July 2026 Transition: A Common Compliance Trap

Many employers may overlook an important transitional issue when moving from the quarterly system to Payday Super.

If your business paid employees during the June 2026 quarter, the Super Guarantee deadline for that quarter remains 28 July 2026. However, any super contributions made after 1 July 2026 will first be allocated to outstanding June quarter obligations before being applied to Payday Super requirements for July payroll.

Without careful planning, businesses could unintentionally create Superannuation Guarantee Charge (SGC) liabilities despite making payments on time.

The appropriate strategy depends on your payroll schedule and the timing of July pay runs, making it worthwhile to review your payment timetable carefully.

Three Practical Steps to Prepare for Payday Super

1. Review Your Payroll Systems

Confirm that your payroll software, clearing house and internal processes are fully compatible with the new Payday Super requirements.

Check that:

• Qualifying Earnings are correctly identified
• Super calculations are accurate
• SuperStream integration is functioning correctly
• Payment workflows are automated where possible

2. Assess Cash Flow Impacts

Moving from quarterly to more frequent super payments will affect business cash flow.

Consider reviewing:

• Payroll funding processes
• Approval workflows
• Bonus and commission payment procedures
• Out-of-cycle payroll processes

Planning ahead can help minimise cash flow pressure while ensuring compliance.

3. Strengthen Internal Controls

Payroll and finance teams should clearly understand the new obligations.

Regular reviews of payroll reports, contribution records and payment confirmations can help identify issues early before they become costly compliance problems

Why Businesses Should Act Now

Payday Super isn’t simply a new payment deadline. It changes how payroll, superannuation, and compliance interact.

Even small process gaps between payroll systems, clearing houses and super funds can quickly become compliance issues if left unchecked.

Businesses that proactively review their payroll processes, improve internal controls and monitor compliance regularly will be better positioned to meet their ongoing obligations while reducing administrative risk.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Nora Pham @ Pitt Martin Tax

The Australian Government has announced a staged reduction of the Fringe Benefits Tax (FBT) exemption for electric vehicles (EVs), following the 2026 statutory review of the Electric Car Discount. While EV incentives will continue, the policy is shifting toward a more targeted and fiscally sustainable approach.

Importantly, there are no immediate changes. The current full FBT exemption remains available until 31 March 2027, meaning existing salary packaging and novated lease arrangements continue as normal for now.

Key Overview

The EV FBT exemption has been one of the main drivers behind Australia’s rapid growth in electric vehicle uptake, particularly through novated leasing arrangements that allow employees to access vehicles using pre-tax income.

However, increasing fiscal costs and distributional concerns have led the Government to restructure the concession. The new framework introduces a three-phase transition from a full exemption to a partial discount system, with a stronger focus on lower-cost EVs.

Phase 1: No Change (Now – 31 March 2027)

Current rules remain unchanged.

Eligible EVs below the Luxury Car Tax (LCT) threshold (around $91,000 for fuel-efficient vehicles in 2025–26) continue to receive a full FBT exemption.

For employers and employees, this means:

• No changes to existing novated lease or salary packaging arrangements
• Full exemption continues for eligible EVs
• No immediate compliance impact

This period provides continued certainty for EV planning and acquisitions.

Phase 2: Partial Concessions Introduced (1 April 2027 – 31 March 2029)

From April 2027, the exemption begins to phase down.

• EVs up to $75,000: continue to receive a full FBT exemption (if eligible)
• EVs above $75,000 and below the LCT threshold: receive a 25% FBT discount

This shift encourages uptake of more affordable EV models while reducing the overall cost of the incentive.

It also aligns with Australia’s broader emissions strategy, including the New Vehicle Efficiency Standards, which aim to increase supply of lower-emission vehicles in the market.

Phase 3: Long-Term Model (From 1 April 2029)

From 2029 onwards, the system becomes more uniform.

All eligible EVs under the LCT threshold will receive a flat 25% FBT discount, regardless of price.

The import tariff exemption for qualifying EVs will remain in place, ensuring continued structural support for EV adoption even as FBT concessions are reduced.

Existing Leases Will Be Protected

A key feature of the reform is the expected grandfathering of existing arrangements.

Current leases entered into before the transition periods should continue to benefit under the rules in place at the time of signing. While legislation will confirm the final details, businesses can reasonably expect existing novated lease and salary packaging arrangements to remain unaffected.

What This Means for Employers and Employees

The EV FBT exemption has significantly contributed to EV adoption in Australia, especially through salary packaging structures.

According to the statutory review, the policy:

• Supported around 64,000 additional EV sales
• Helped reduce transport emissions and fuel costs
• Increased EV accessibility across different regions

However, it also raised concerns about equity, as higher-income earners were more likely to benefit, while the fiscal cost to Government has continued to rise.

The revised approach aims to maintain EV support while improving long-term sustainability.

Practical Considerations

With the upcoming changes, planning will become increasingly important:

• Timing matters: entering arrangements before 31 March 2027 may secure full exemption benefits
• Price sensitivity increases: EVs under $75,000 will remain more tax-effective from 2027
• Fleet reviews recommended: employers should reassess total cost of ownership, including FBT impacts
• Used EVs may become more attractive as incentives narrow on new vehicles

Despite policy changes, EV adoption continues to grow strongly, with EV and PHEV sales reaching 22.9% of new vehicles in March 2026, up significantly from 2022 levels.

Final Thoughts

The phased wind-back of the EV FBT exemption reflects a clear policy shift: continued support for electric vehicles, but with tighter targeting and reduced long-term fiscal cost.

For businesses and employees, the focus now moves from “whether to act” to “when and how to structure EV arrangements effectively”.

If you are considering an EV purchase or reviewing salary packaging arrangements, early planning can help ensure optimal tax outcomes under both current and future rules.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Yvonne Shao @ Pitt Martin Tax

As the end of the financial year approaches, SMSF trustees and members should take time to review their affairs before 30 June. Addressing important matters before SMSF year-end review can help minimize compliance risks, maintain access to available tax concessions and ensure planning opportunities are not missed. The checklist below outlines several areas that may deserve attention before the financial year closes.

Contribution Timing in Your SMSF Year-End Review

• Ensure money reaches the fund before SMSF year-end: For contribution limit and deduction purposes, the relevant date is generally when funds are received by the SMSF rather than when a payment instruction is submitted.

Where money is transferred between separate banking institutions, additional time should be allowed for processing and settlement delays.

• Personally deductible contributions: A member who intends to claim a tax deduction for a personal super contribution must provide the required notice to the trustee and receive acknowledgement from the fund within the prescribed timeframe. In most situations, this must occur before the earlier of lodging the member’s income tax return or 30 June of the following financial year.

• Planning to start a pension shortly after year-end? If retirement income payments are expected to commence early in the next financial year, the deduction notice process should generally be completed first. Otherwise, the contribution may no longer qualify for a personal deduction.

Year-End Planning Opportunities for SMSF Members

• Accessing unused concessional limits: Members with a total superannuation balance below $500,000 at the previous 30 June may be eligible to utilise concessional contribution capacity carried forward from earlier years. This can allow larger deductible contributions to be made in the current year.

This strategy may be particularly valuable where an individual expects to realise a significant capital gain during the 2025–26 income year.

• Using the SMSF allocation timing concession: In certain circumstances, a contribution received during June may be held temporarily in an unallocated reserve before being allocated to a member during July. If implemented correctly, the contribution may count towards the following year’s limits rather than the current year’s cap.

Often referred to as a reserving arrangement, this strategy requires appropriate documentation, trustee resolutions and a trust deed that permits its use. When applied correctly, it may provide additional tax planning flexibility.

After-Tax Contributions in an SMSF Year-End Review

• Bring-forward provisions: Eligibility to access the bring-forward rules depends on a member’s total superannuation balance as at the previous SMSF year-end.

For eligible individuals, it may be possible to contribute more than the standard annual after-tax limit by utilising future years’ contribution capacity.

• Contributions for a spouse and government incentives: Contributions made to a spouse’s super account may provide access to a tax offset where eligibility conditions are satisfied. Lower-income earners who make personal after-tax contributions may also qualify for a government co-contribution if the relevant income requirements are met.

Contribution Limit Changes for Your SMSF Review

The following contribution limits currently apply during the 2025–26 financial year:

• Concessional contributions: $30,000.

• Non-concessional contributions: $120,000.

From 1 July 2026, these limits will increase to:

• Concessional contributions: $32,500.

• Non-concessional contributions: $130,000.

Retirement Planning and Transfer Balance Cap Review

• Required minimum pension payments: Where account-based pensions are being paid from the SMSF, trustees should ensure the minimum annual payment has been made to each pension member before SMSF year-end. Failing to satisfy this requirement may create administrative difficulties and affect valuable tax concessions.

• Other retirement income products may also require minimum annual payments. Certain arrangements impose maximum payment limits, and exceeding those limits may produce adverse consequences.

• Retirement transfer threshold planning: The general transfer balance cap will increase from 1 July 2026.

Members considering commencing a retirement pension near the end of the financial year should carefully consider timing. Whether the pension begins before or after 1 July 2026 may affect the amount that can be transferred into the tax-free retirement phase.

• Current general transfer balance cap for 2025–26: $2.0 million. This amount is scheduled to increase to $2.1 million from 1 July 2026.

• Not all members will have access to the full threshold. Depending on previous transfer balance account events, an individual’s personal limit may be lower.

Valuations and Compliance in Your SMSF Year-End Review

• Market value evidence: Trustees should ensure fund assets are supported by evidence demonstrating market value as close as practical to 30 June. Particular attention should be given to property holdings, connected-party assets and investments that are not publicly traded.

• Related-party dealings: Review leasing arrangements, rental agreements and services involving related parties to ensure they remain appropriately documented and reflect commercial terms.

• Pension records and trustee documentation: Pension commencements, commutations and benefit payments should be supported by properly executed documentation together with trustee resolutions and records.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

The proposed tax changes announced in the 2026 Federal Budget have created plenty of discussion.

Property investors are reviewing their portfolios. Business owners are reassessing their structures. Families using discretionary trusts are asking what happens next.

The proposed reforms focus on three key areas:

• Negative gearing
• Capital gains tax (CGT)
• Discretionary trusts

Importantly, these measures are not law yet. Parliament still needs to consider and pass the legislation.

However, that does not mean you should ignore the proposals. Instead, now is a good time to understand the possible impact and plan ahead.

Why Planning Early Makes Sense

Many people are waiting for certainty before taking action.

However, smart planning does not require certainty.

The proposed negative gearing and CGT changes are due to start from 1 July 2027. Meanwhile, the trust reforms are not expected to begin until 1 July 2028.

As a result, investors and business owners have time to review their position and explore different options.

You do not need to make major changes today. However, understanding your risks and opportunities now can help you make better decisions later.

1. Review Your Existing Property Portfolio

One of the biggest Budget announcements relates to negative gearing.

The Government plans to limit negative gearing for established residential properties purchased after 12 May 2026.

Existing Investors May Have an Advantage

Current property owners could benefit from grandfathering rules.

Under the proposal, investors who owned residential property before Budget night can continue using the existing negative gearing rules.

As a result, eligible rental losses could still offset salary, business income and other taxable income.

For many investors, this may become a valuable long-term benefit.

Why This Matters

Not all investment properties may receive the same tax treatment in the future.

Because of this, now is a good time to review your portfolio.

First, identify which assets may qualify for grandfathering. Next, consider how those assets fit within your long-term investment goals.

A simple review today could uncover opportunities you may have overlooked.

2. Think Carefully About Future Property Purchases

The proposed reforms could change how investors approach new property purchases.

In the past, many investors used negative gearing when buying established residential properties.

However, future buyers may need to focus more on investment fundamentals.

Focus on Quality Investments

Tax benefits are important. However, they should never be the main reason for buying an investment property.

Instead, focus on:

• Strong locations
• Rental demand
• Cash flow potential
• Long-term growth

These factors often have a greater impact on returns than tax deductions alone.

New Builds Could Attract More Interest

In addition, the Government has indicated that newly built residential properties may continue to receive favourable tax treatment.

Some housing developments and build-to-rent projects may also qualify for concessions.

As a result, investors may begin comparing new builds more closely with established properties.

3. Identify Assets That May Need Valuations

The proposed CGT changes could create new planning opportunities.

They could also create additional record-keeping requirements.

Why Valuations Matter

Under the proposal, gains that build up before 1 July 2027 will receive different tax treatment from gains that arise after that date.

Because of this, many investors may need accurate market values as at 1 July 2027.

This could apply to:

• Investment properties
• Commercial real estate
• Share portfolios
• Business assets

Start Early

Valuations often take time.

Therefore, it makes sense to start planning well before any deadline arrives.

Good records today can save time, money and stress later.

4. Review Your Capital Gains Tax Strategy

The Government also plans to change the current CGT discount rules.

This is one of the biggest Budget announcements.

For many years, investors have relied on the 50% CGT discount when selling assets.

However, the proposed rules may change the way some investors think about future sales.

Look at Future Exit Plans

Now is a good time to review your long-term plans.

For example:

• Which assets might you sell in the next five years?
• How would the current rules affect the outcome?
• How could the proposed rules change that result?

These questions can help you identify potential risks early.

Keep the Bigger Picture in Mind

Tax matters. However, it should not drive every decision.

Likewise, your investment goals, retirement plans and cash flow needs should remain key considerations.

5. Review Your Trust Structure

The proposed trust changes have attracted significant attention.

If introduced, discretionary trusts would face a minimum tax rate of 30%.

Understand the Potential Impact

Many families use discretionary trusts to distribute income among beneficiaries.

The Government wants to reduce some of the tax benefits associated with these arrangements.

As a result, some families could pay more tax under the proposed system.

Remember the Non-Tax Benefits

Importantly, trusts offer more than tax advantages.

They can also assist with:

• Asset protection
• Estate planning
• Succession planning
• Family wealth management

Therefore, trusts may still play an important role even if tax outcomes change.

6. Consider Alternative Structures

Some taxpayers may decide to review their current structures.

However, restructuring is not always the right move.

Explore Different Options

Depending on your situation, you may wish to compare:

• Private companies
• Fixed trusts
• Corporate beneficiaries
• Other business structures

Each option has strengths and weaknesses.

Avoid Rushed Decisions

Finally, avoid making major changes based on proposed legislation alone.

Instead, compare tax outcomes alongside asset protection, business goals and succession planning needs.

7. Stay Informed

The final action may be the most important.

At this stage, the proposals are not law.

Focus on Preparation, Not Panic

Many details could change before the legislation passes Parliament.

Therefore, preparation is more valuable than speculation.

Review your position. Model different scenarios. Understand your options.

Then, when more details become available, you can act with confidence.

Frequently Asked Questions

Will negative gearing be abolished?

No. The proposal restricts how some losses can be used. It does not abolish negative gearing.

Will existing properties be protected?

Under the current proposal, many existing property owners will receive grandfathering protection.

Should I restructure my trust now?

Not necessarily. First, wait for more certainty around the final legislation.

Will trusts still be useful?

Yes. In many cases, trusts will continue to provide asset protection and estate planning benefits.

Seek Advice Before Making Major Decisions

Every taxpayer’s situation is different.

For example, one investor may benefit from grandfathering rules. Another may need to review future purchase plans.

Likewise, some business owners may benefit from a restructure, while others may not.

Professional advice can help you understand the options available and avoid costly mistakes.

What Should You Do Next?

The proposed 2026 Federal Budget tax changes could affect investors, business owners and families for years to come.

However, there is still time to prepare.

Now is the ideal time to review your position, understand the possible impact and plan ahead.

By taking action early, you can make informed decisions and respond with confidence as the legislation develops.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Alex Cramery @ Pitt Martin Tax

Key Takeaways

• The ATO’s standard EV home charging rate will increase from 4.20 cents to 5.47 cents per kilometre.
• The new rate applies from 1 April 2026 for Fringe Benefits Tax (FBT) purposes.
• The new rate applies from 1 July 2026 for income tax deductions.
• Employers providing EVs through novated leases, salary packaging arrangements or company vehicles may see changes to their FBT calculations.
• Individuals claiming work-related electric vehicle expenses using the logbook method may be entitled to larger deductions.
• Minimal record-keeping is required to use the ATO’s simplified method.

The Australian Taxation Office (ATO) has announced changes to the approved EV home charging rate, which may affect taxpayers and employers using electric vehicles (EVs) or plug-in hybrid electric vehicles (PHEVs) for work-related purposes where charging occurs at home.

For fringe benefits tax (FBT) purposes, the revised rate will apply from 1 April 2026, while income tax claims will adopt the change from 1 July 2026. Under the update, the approved home-charging electricity rate will increase from 4.20 cents per kilometre to 5.47 cents per kilometre.

Where household electricity bills do not separately identify EV charging usage, the ATO allows taxpayers to rely on this simplified cents-per-kilometre calculation method. This removes the need to track electricity consumption in kilowatt hours or install specialized charging measurement equipment. Instead, taxpayers can estimate charging costs by multiplying the approved rate by the distance travelled by the vehicle.

The revised amount reflects higher electricity prices and is intended to provide businesses and individuals with a more commercially realistic charging allowance.

Home Charging Electricity Rate Impact on Employers

Employers supplying EVs or PHEVs through salary packaging arrangements, novated leasing structures, or company-owned vehicles may see changes to their FBT calculations as a result of the increased EV home charging rate. In practice, the update may:

• Increase the taxable value of the benefit when the operating cost method is adopted.

• Result in larger employee recipient contributions, potentially reducing the employer’s FBT liability.

• Affect the calculation of reportable fringe benefits amounts.

Claiming Deductions for Electric Vehicle Charging Costs

Taxpayers using the logbook method to claim work-related vehicle expenses may apply the new rate to the business-use portion of kilometres travelled from the commencement of the 2026–27 income year. Earlier periods, including years dating back to 2022, must continue using the previous 4.20-cent rate.

Records Required for EV Charging Expense Claims

Only limited records are required to support these claims. Taxpayers should retain:

• Odometer readings taken at the beginning and end of the relevant income or FBT year where possible.

• A compliant logbook identifying business and private travel if using the operating cost or logbook method.

• At least one electricity bill demonstrating that home electricity expenses are incurred.

• For PHEVs, petrol receipts should also be retained. Fuel expenses must be calculated separately using the manufacturer’s hybrid fuel consumption figures, while the ATO home-charging rate applies solely to electric kilometres travelled.

Tip: Many newer EV models now report the proportion of charging completed at home compared with public charging stations. Using this information may improve calculation accuracy and potentially increase deductions.

Example of the Revised Home Charging Rate

If an employee owns an EV and travels 25,000 kilometres for employment purposes during the 2026–27 income year, the home-charging expense calculation would be:

Home-charging cost = 25,000 × 5.47c = $1,367.50 (previously $1,050).

Compared with the earlier rate, the additional $317.50 may assist in lowering the employee’s taxable income for the relevant year.

Preparing for the New Electric Vehicle Charging Rules

• The existing lower rate should continue to be used for the FBT year ending 31 March 2026 and for income tax deductions relating to the year ending 30 June 2026.

• The revised rate should only be applied for the current FBT year and for income years commencing from 1 July 2026.

The adoption of electric vehicles continues to grow, and the updated ATO rate is expected to deliver improved tax outcomes for many taxpayers while maintaining a straightforward compliance process. Whether you operate a vehicle fleet, offer salary packaging arrangements, or claim motor vehicle expenses personally, now is an ideal time to assess the potential benefits. Our team can help you evaluate the impact and ensure you maximise all available tax concessions and deductions.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

Australia’s superannuation contribution caps will increase from 1 July 2026 following the release of the December 2025 quarter Average Weekly Ordinary Time Earnings (AWOTE). The annual concessional contribution (CC) cap will rise from $30,000 to $32,500, while the non-concessional contribution (NCC) cap will increase from $120,000 to $130,000. These changes may provide additional opportunities to increase retirement savings and improve tax efficiency.

Concessional Contributions

Concessional contributions are pre-tax contributions and may include Superannuation Guarantee (SG) payments, salary sacrifice arrangements, and personal deductible contributions. For individuals whose SG contributions remain below the annual cap, additional concessional contributions may help reduce taxable income and lower overall tax liabilities.

Some taxpayers may also qualify to use unused concessional contribution caps from the previous five financial years under the carry-forward contribution rules, provided their total superannuation balance (TSB) was below $500,000 at the previous 30 June.

Non-Concessional Contributions

Non-concessional contributions are made using after-tax income. Although they generally do not provide an immediate tax deduction, they can still offer long-term tax advantages because superannuation earnings are typically taxed at only 15% during the accumulation phase. In retirement, earnings and pension withdrawals may become tax-free, subject to the transfer balance cap, which will increase to $2,100,000 from 1 July 2026.

Eligible individuals may also access the bring-forward rule, allowing up to three years of NCC caps to be contributed at once. From 1 July 2026, this could allow contributions of up to $390,000 in a single financial year. However, eligibility depends on factors such as total superannuation balance and prior NCC contributions.

There may also be contribution opportunities available in the current financial year for individuals whose TSB was below $2,000,000 on 30 June 2025.

Recommended Action

With superannuation rules becoming increasingly complex, individuals and business owners should regularly review their contribution strategies, contribution caps, and total superannuation balances to avoid excess contribution penalties and maximise available tax benefits.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.