Payday Super starts 1 July 2026, the $20,000 instant asset write-off is still live, and sole trader pre-fill just got an upgrade.
Tax time is rarely simple for small business owners, but 2026 brings a longer-than-usual list of changes to work through. The ATO has published its annual Tax Time Toolkit for Small Business, launched by Assistant Commissioner for Small Business Experience Angela Allen, covering what is new, what has changed, and where common mistakes are likely to happen this year.
Here is what small business owners need to know.
Payday Super: the biggest shift
The most significant change landing this financial year is Payday Super, which takes effect from 1 July 2026. From that date, employers will be required to pay their employees’ superannuation guarantee contributions at the same time as wages, rather than on the current quarterly schedule.
Under the new rules, according to the ATO’s 2026 Tax Time Toolkit, super contributions must reach employees’ nominated super funds within seven business days after payday. Qualifying earnings, which bring together ordinary time earnings and other payments, will need to be reported alongside super liability through Single Touch Payroll from 1 July 2026.
If super payments do not reach the right fund in full and on time, the super guarantee charge will apply. The ATO has also confirmed that late payment offsets will not be available under Payday Super, and will not apply for the quarter ending June 2026.
There is also a practical transition issue to be aware of. The Small Business Super Clearing House, which many small employers currently use to manage super payments, cannot be used for any payments on or after 1 July 2026. Business owners using the clearing house should download their super records and transition to an alternative provider before that date, according to the toolkit.
The ATO is encouraging small businesses to begin preparing now, using guidance including the Payday Super checklist for employers available on the ATO website.
The $20,000 write-off is still on the table
The instant asset write-off remains available for the 2025-26 financial year for businesses with an aggregated annual turnover of less than $10 million. Eligible businesses can immediately deduct the business portion of assets costing less than $20,000, with the limit applying on a per-asset basis, meaning multiple assets can each be written off individually.
To qualify, assets must have been first used or installed ready for use between 1 July 2025 and 30 June 2026, according to the ATO toolkit. The $20,000 threshold applies to the cost of each asset, not the total value of all assets claimed.
For business owners who have been considering equipment purchases, this is the final stretch of the current income year to act. Any asset not in use by 30 June 2026 will not qualify under the current rules.
It is also worth noting the car depreciation limit for the 2025-26 income year. For business vehicles classified as cars, the maximum cost that can be used to calculate a depreciation claim is $69,674, or the actual cost of the vehicle if it is lower than that amount, according to the toolkit.
Pre-fill gets smarter for sole traders
Sole traders lodging their 2026 tax return will benefit from an expanded pre-fill system. The ATO is now pre-filling additional information directly into returns, including assessable payments received, government grants and payments reported through the Taxable Payments Annual Report, Australian Business Number details, and the value of opening stock where applicable, according to the toolkit.
The pre-fill data is drawn from banks, government agencies, health funds, and other third-party providers. All pre-filled information must still be reviewed and confirmed by the business owner before lodging.
One timing note from the ATO: most TPAR data will not be available until after 28 August 2026. Sole traders who wait until after that date to lodge may find the process smoother and less prone to the kind of gaps that lead to amendments later.
A few other changes worth knowing
Several other updates in the toolkit are worth flagging for small business owners.
Interest charges are no longer deductible. From 1 July 2025, general interest charges and shortfall interest charges incurred on or after that date cannot be claimed as an income tax deduction in the 2025-26 or later tax returns, according to the ATO. Interest charges incurred before 1 July 2025 can still be claimed in the 2024-25 and earlier income years.
The tax return amendment period has been extended. Businesses with an annual aggregated turnover of less than $50 million now have up to four years from the date of their tax assessment to request amendments. This applies to assessments for the 2024-25 income year and later, according to the toolkit.
Plug-in hybrid vehicles are no longer FBT-exempt. Since 1 April 2025, plug-in hybrid electric vehicles are no longer classified as zero or low emissions vehicles under fringe benefits tax law and no longer qualify for the FBT exemption. Employers who have continued providing PHEVs to employees for personal use since that date may have FBT obligations for the 2025-26 FBT year, according to the ATO toolkit. Fully electric vehicles may still qualify for the exemption where the relevant requirements are met.
The motor vehicle cents per kilometre rate for the 2025-26 income year is 88 cents per kilometre, covering all car running expenses including depreciation. Sole traders and partnerships using this method can claim a maximum of 5,000 business kilometres per car. Claims above that threshold require the logbook method.
Record-keeping remains the foundation
Across all of these changes, the ATO’s message in the 2026 toolkit is consistent: good record-keeping is the most effective way to protect your business and support your claims. The ATO notes it publishes quarterly updates on what is attracting compliance attention as part of its Getting it Right campaign, focused on preventing small issues from becoming larger ones.
The ATO also flags the small business tax gap as a concern. Common errors including omitted income and incorrect expense claims often happen unintentionally, according to the toolkit, and the ATO’s stated approach is to help businesses avoid mistakes through transparency rather than immediate enforcement, while applying firmer action for those who are deliberately not engaging.
Angela Allen, Assistant Commissioner for Small Business Experience at the ATO, noted in the toolkit’s introduction that the organisation knows most small businesses are doing their best to meet their obligations, and that reaching out early if cash flow or other pressures make it difficult to stay on top of tax and super is the right approach.
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