Home topics news via pexels News News Small businesses finally getting paid faster, but there’s still a catch Yajush Gupta February 27, 2026 Australian small businesses closed out 2025 with their strongest sales and jobs growth in two years, but a February rate hike is already testing that momentum. What’s happening: New data from Xero Small Business Insights, drawing on anonymised figures from 520,000 Australian small businesses, shows the December quarter 2025 delivered the strongest sales and jobs growth in two years. Why this matters: After a difficult 2024, the second half of 2025 marked a genuine turning point for Australia’s small business sector. But the Reserve Bank of Australia’s decision to raise the cash rate in February 2026 has cast a shadow over that recovery. Australian small businesses ended 2025 on a high, recording their best quarterly sales performance since mid-2023 and their strongest jobs growth in two years, according to the latest Xero Small Business Insights (XSBI) data published on 26 February 2026. The December quarter report, which analyses anonymised and aggregated data from 520,000 Australian small businesses, shows sales grew 6.7% year-on-year, building on a 6.3% rise in the September quarter. December itself was the standout month, with sales up 9.6% year-on-year, the largest monthly increase since April 2024. Jobs followed a similar path, growing 3.4% year-on-year in the December quarter, up from 2.8% in the September quarter. For context, that is the biggest increase in employment in two years, a sign that business owners felt confident