Thirty-eight per cent of small business owners describe their stress as very or extremely severe. Yet more than two thirds say it is worth it.
Most small business owners know the feeling. The inbox that never empties. The payroll that has to be met regardless of what came in this week. The Sunday evening that stops feeling like a weekend somewhere around 4pm.
What Xero’s Emotional Tax Return report does is put hard numbers on something most owners experience privately and rarely say out loud. Of the small business owners surveyed, 31 per cent have considered giving up their business due to stress. Some 38 per cent describe their current stress levels as very or extremely severe. Nearly three quarters, 73 per cent, say they cannot switch off from work. More than half, 58 per cent, have hidden business stress from a family member or partner. And 34 per cent are losing more than five hours of sleep per night.
The economic backdrop is a significant driver. Some 27 per cent of owners are very or extremely concerned about how the economy will affect them in the next financial year.
Separate research from COSBOA and CommBank found 64 per cent of small businesses reported lower profits than the previous year, up sharply from 40 per cent in 2024, while six in ten owners reported at least occasionally being unable to pay themselves.
Dr Luke Martin, Beyond Blue Clinical Spokesperson, said the Xero findings reflect what many owners quietly live with. “Running a business has a way of slowly taking over more of your life than you ever planned. When you’re responsible for everything, it’s easy for time with friends and family, the things you enjoy, or even basic rest to slip down the list. Most business owners don’t choose that on purpose. It just happens when you’re trying to keep things afloat,” Dr Martin said.
On average, stress costs business owners more than four hours of productive work every week, equating to around 29 working days lost per year. Financial management alone consumes around 21 hours of their time each month. Poor mental health costs Australian businesses up to $12 billion annually in lost productivity, sick leave, and reduced performance, according to MYOB research, a figure that underscores the scale of what sits behind the individual experience.
When tax time makes it worse
For many owners, the end of financial year sharpens the pressure rather than resolving it.
The Xero research found 28 per cent of owners find tax time more stressful than the rest of the year. Their top concerns are fear of making a tax mistake, cited by 39 per cent, anxiety about fines at 35 per cent, and chasing paperwork at 32 per cent.
Those pressures are driving avoidance behaviours. Some 37 per cent delay filing until the last minute, and 29 per cent actively avoid meetings with their accountant or bookkeeper.
The financial surprises add to the anxiety. More than two thirds of owners, 69 per cent, have experienced a surprising tax outcome, with 53 per cent of those being negative, either a larger tax bill or a smaller refund than expected.
This year, the end of financial year arrives with an additional layer. Charlie Sheppeard, EGM of Strategy and Operations ANZ at Xero, noted the timing directly. “The economic uncertainty small businesses are navigating right now is real. More than a quarter of owners told us they’re very or extremely concerned about what the next financial year holds for them. That context means EOFY arrives with a lot already on owners’ plates, and with Payday Super starting on 1 July, there’s a new compliance obligation landing at an already pressured time of year,” Sheppeard said.
The resilience underneath the stress
Despite everything the data reveals, the picture is not one of defeat.
More than two thirds of owners surveyed, 69 per cent, said the stress was worth it or they would never walk away. That number sits alongside the burnout and the sleepless nights not as a contradiction, but as a testament to what drives most people to run their own business in the first place.
Sheppeard acknowledged that commitment directly. “Running a small business takes a real emotional toll on owners. They are absorbing it personally, and our data shows it’s costing them sleep, relationships and, in many cases, the headspace they need to run their business effectively. But more than two thirds say it’s worth it or they’d never walk away. That kind of commitment deserves to be taken seriously,” he said.
Dr Martin offered a practical frame for owners who recognise themselves in the data. “When something takes up such a big part of your life, it’s not separate from your wellbeing. How things are going in your business really shapes how you’re feeling day to day. That’s why it’s important to take stock from time to time. Pause and ask: what have I been trading off lately? What matters to me that I’ve stopped making time for? Often, just noticing those gaps can point to small, doable ways to course-correct,” he said.
Where to get support
For small business owners who are feeling the strain, free and confidential support is available.
Beyond Blue’s NewAccess for Small Business Owners program offers six free confidential mental health coaching sessions, with coaches who have a small business background. The program is designed for owners who are feeling overwhelmed about everyday life issues that may be caused by business challenges, cash flow, staffing, or compliance pressures. Small businesses looking for support can visit Beyond Blue at beyondblue.org.au/get-support.
Xero is also offering its Emotional Tax Refund initiative, inviting small business owners to share a personal moment they missed this year due to business stress and claim it back. For more information visit: xero.com/etr
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