EOFY 2026: A tax planning guide for business owners

As 30 June approaches, now is the time to review your tax position, clean up your records and make sure your business is ready for the year ahead.

This guide outlines some of the areas business owners, trustees, employers and investors should review before 30 June 2026.

Why EOFY planning matters

Good tax planning gives you a clearer picture of where your business stands before the financial year closes.

It can help you:

• identify deductions that may be available before 30 June
• review trust distributions and company loan accounts
• check superannuation, payroll and contractor obligations
• prepare for upcoming tax and reporting changes
• avoid last-minute compliance issues
• make more informed decisions about cash flow, assets and business structure

Every business is different, so the right actions will depend on your structure, income, cash flow, assets and future plans. The earlier you start the conversation with your accountant, the more options you may have.

1. Review your trust distributions before 30 June

If you operate through a trust, trustee resolutions should be reviewed before 30 June.

A trustee resolution records how trust income will be distributed to beneficiaries for the financial year. These decisions are important because they determine who is presently entitled to the trust income and who may need to include that income in their tax return.

Before making a resolution, trustees should review:

• the trust deed
• the beneficiaries of the trust
• the income of the trust for the year
• whether any capital gains or franked dividends need to be streamed
• whether any Family Trust Election applies
• whether beneficiary Tax File Numbers have been provided where required
• whether the proposed distribution is commercially and legally appropriate

It is also important to consider whether beneficiaries are actually expected to receive the benefit of the distribution. The ATO continues to focus on trust arrangements that appear to be tax-driven or where the beneficiary does not genuinely benefit from the amount distributed.

For more detail, read our guide: Trustee Resolutions: What You Need to Know for June 30.

2. Check private company loans and Division 7A

If you operate through a private company, now is the time to review director loans, shareholder loans and any payments made to directors or their associates.

Division 7A is designed to stop private company profits being accessed tax-free by shareholders or their associates. If company money has been used for personal expenses, drawings, loans or unpaid entitlements, those amounts may need to be repaid or placed under a complying loan agreement.

Before 30 June, business owners should check whether:

• directors or shareholders owe money to the company
• personal expenses have been paid through the business
• minimum yearly repayments have been made on existing Division 7A loans
• any new loans need to be documented
• unpaid trust distributions to companies need review
• the company has sufficient records to support the treatment of payments

Ignoring Division 7A can result in amounts being treated as unfranked dividends, which can create an unexpected tax bill.

For more detail, read our guide: Navigating Division 7A and Director Loans.

3. Prepare for Payday Super

Payday Super starts from 1 July 2026. This is one of the biggest payroll changes employers will need to prepare for.

Under Payday Super, employers will need to pay super each payday rather than quarterly. This means payroll systems, cash flow planning and employee details all need to be ready before the rules begin.

Before 30 June, employers should review:

• payroll software settings
• employee super fund details
• onboarding processes for new employees
• cash flow timing around payroll
• clearing house processing times
• how super payments will be checked and reconciled

This is not something to leave until the first pay run after 1 July. Businesses that are used to quarterly super payments may need to adjust their internal processes and cash flow planning.

For more detail, read our guide: Payday Super is Coming. Now Is the Time to Act.

You may also find this helpful: Superannuation: the overlooked obligations that can catch business owners out.

4. Pay employee super early enough to claim a deduction

Superannuation contributions are generally only deductible when they are received by the employee’s super fund by 30 June.

It is not always enough to make the payment on 30 June, especially where a clearing house is involved. Processing times can mean the contribution is received after year-end, which may impact the deduction.

Before EOFY, employers should:

• check all super obligations are up to date
• allow enough time for payments to reach the fund
• review salary sacrifice arrangements
• check whether any additional employer contributions are planned
• make sure payroll records match the amounts paid

With Payday Super starting from 1 July 2026, this is also a good time to check whether your payroll and super processes are ready for more frequent payments.

5. Consider whether asset purchases should be brought forward

Small businesses may be able to immediately deduct eligible business assets costing less than $20,000, provided the asset is first used or installed ready for use by 30 June 2026.

This can apply to multiple assets, as the instant asset write-off threshold is applied on a per-asset basis.

However, it is important not to buy assets just for the tax deduction. The purchase should make commercial sense for your business.

Before buying equipment or other business assets, consider:

• whether the asset is genuinely needed
• whether it will be delivered and ready for use before 30 June
• whether the business has the cash flow to support the purchase
• whether finance costs need to be considered
• whether the asset is used partly for private purposes
• whether the business is eligible for the concession

Assets costing more than $20,000 may need to be depreciated through the small business pool or under other depreciation rules.

For more detail, speak with us before making any large EOFY purchases.

6. Review bad debts before year-end

If your business has unpaid invoices that are unlikely to be recovered, you may be able to write them off as bad debts before 30 June.

To claim a deduction, the debt generally needs to be genuinely bad, not just overdue. You should be able to show that reasonable steps have been taken to recover the amount and that it is unlikely to be paid.

Before EOFY, review your aged receivables and consider:

• which invoices are significantly overdue
• what recovery action has been taken
• whether payment plans have failed
• whether the customer has gone into liquidation or administration
• whether the debt should be written off before 30 June
• whether GST adjustments may be available

Good records are important. Keep notes, emails, payment reminders and any other evidence showing why the debt was considered bad.

7. Review expense prepayments

Some businesses may be able to claim a deduction for certain prepaid expenses.

This may apply where eligible businesses prepay expenses for a period of 12 months or less, such as insurance, subscriptions, rent, interest or other business costs.

Before prepaying expenses, consider whether:

• the expense relates to your business
• the service period is 12 months or less
• your business is eligible
• the prepayment helps your cash flow or creates pressure
• the deduction is worth bringing forward

Like asset purchases, prepayments should make commercial sense. A tax deduction is helpful, but it should not come at the expense of business cash flow.

8. Check employee bonuses and accrued expenses

If you intend to pay employee bonuses, the timing and documentation matter.

A business may be able to claim a deduction for a bonus if it is definitely committed to paying it before 30 June, even if the amount is paid later. This generally means the decision should be properly documented before year-end.

Before 30 June, review:

• employee bonus arrangements
• director or management approvals
• employment contracts or bonus policies
• payroll tax, PAYG and super implications
• whether the business is genuinely committed to the payment

You should also review other expenses where the business is definitely committed before 30 June, even if the invoice has not yet been received. This may include completed work, loan interest accruals or other year-end expenses.

9. Review Fringe Benefits Tax exposure

FBT is an area that can easily be missed, especially in private businesses where business assets are also used by owners, directors or employees.

Common FBT areas include:

• cars and utes
• entertainment
• gifts
• car parking
• employee loans
• reimbursements
• living-away-from-home arrangements
• electric vehicles

Business vehicles are a common risk area. Just because a vehicle is owned by the business does not mean there is no private use or FBT exposure.

Before EOFY, review:

• which vehicles are held by the business
• who uses them
• whether logbooks are current
• whether any vehicles are taken home
• whether entertainment or gifts have been provided
• whether electric vehicle concessions apply

For more detail, read our guides: Fringe Benefits Tax (FBT), Commercial Vehicles: ATO FBT Explained and FBT Exemption on Electric Cars. 

10. Check your stock, assets and records

EOFY is a good time to clean up your business records.

If you hold trading stock, you may need to complete a stocktake and value stock on hand at 30 June. You should also identify obsolete, damaged or slow-moving stock, as this may affect the value used for tax purposes.

You should also review your asset register and confirm:

• assets purchased during the year
• assets sold during the year
• assets scrapped or no longer used
• assets used partly for private purposes
• finance arrangements linked to assets
• whether depreciation has been correctly applied

Good records can help you avoid missed deductions and make tax return preparation much smoother.

11. Review contractor payments and TPAR obligations

Some businesses need to lodge a Taxable Payments Annual Report, also known as a TPAR.

A TPAR may be required if your business pays contractors or subcontractors for certain services, including:

• building and construction
• cleaning
• courier or road freight
• information technology
• security, investigation or surveillance

The report is due by 28 August each year.

Before year-end, review whether you have paid contractors in a reportable industry and make sure you have the information needed, including contractor ABNs, names, addresses and payment amounts.

For more detail, read our guide: Bonerath & Co.’s Guide to the Taxable Payments Annual Report.

12. Review personal services income arrangements

If your income is mainly generated from your personal skills or efforts, the personal services income rules may apply.

This can be relevant for consultants, contractors, medical professionals, creatives, IT professionals and other service-based businesses.

The PSI rules can affect whether income can be split or retained in an entity. If the rules apply, income may need to be attributed to the individual who performed the work.

Before 30 June, review:

• how income is earned
• whether income depends mainly on one person’s skills
• whether the business has multiple unrelated clients
• whether work is performed through a company, trust or partnership
• whether income has been distributed appropriately
• whether the arrangement is likely to attract ATO attention

For more detail, read our guide: What Is Personal Services Income (PSI)?

13. Review investment property deductions

If you own an investment property, EOFY is a good time to review your deductions and records.

Common areas to check include:

• interest on investment loans
• repairs and maintenance
• capital improvements
• depreciation and capital works
• agent fees
• insurance
• council rates
• land tax
• body corporate fees
• periods of private use
• short-term accommodation or holiday home use

It is important to understand the difference between repairs and improvements. Repairs may be deductible, while improvements are generally capital in nature and claimed over time or included in the cost base for CGT purposes.

Holiday homes and mixed-use properties also require extra care. If a property is used privately or not genuinely available for rent, deductions may need to be apportioned.

For more detail, read our guides: Investment Properties and Tax Tips and ATO Targets Holiday Home Tax Deductions.

14. Think ahead if you are planning to sell your business

If you are thinking about selling your business, restructuring or handing the business to the next generation, EOFY is a good time to review the tax consequences.

Selling a business can trigger capital gains tax, but small business CGT concessions may reduce the tax payable where the conditions are met.

Before making decisions, consider:

• who owns the business assets
• whether the business is operated through a company, trust, partnership or sole trader structure
• whether the sale will be a sale of shares, units or business assets
• whether the assets are active business assets
• whether the business meets the turnover or net asset tests
• whether retirement or succession planning is involved
• whether the timing of the sale matters

The small business CGT concessions are valuable, but they are complex. Getting advice early can make a significant difference.

For more detail, read our guide: Before You Sell Your Business, Understand the CGT Concessions That Could Save You Tax.

15. Review PAYG instalments and cash flow

If your business income has changed significantly during the year, you may need to review your PAYG instalments.

This is especially important if profits have fallen, cash flow is tight or the business has had a very different year compared with the prior year.

Before varying instalments, you should prepare a realistic estimate of taxable income. Varying too far down can create penalties or interest if the estimate is not reasonable.

You should also review:

• tax payable estimates
• GST and BAS obligations
• superannuation obligations
• wages and PAYG withholding
• upcoming finance repayments
• ATO payment plans
• expected July and August cash flow

EOFY planning is not just about the tax return. It is also about making sure the business is ready for the next financial year.

16. Prepare for an ATO review

The ATO continues to use data matching and targeted reviews to identify compliance issues.

Businesses should make sure their records are complete and easy to explain. This is especially important for private groups, trusts, companies and businesses with related-party transactions.

Useful documents to have ready include:

• current business structure diagram
• trust deeds and trustee resolutions
• Division 7A loan agreements
• payroll and super records
• contractor records
• FBT records and logbooks
• asset register
• stocktake records
• loan statements
• BAS reconciliations
• evidence for bad debt write-offs
• rental property records
• records supporting deductions

The better your records, the easier it is to respond to questions and finalise your tax work efficiently.

For more information, read our guide: ATO reviews and audits 

Final thoughts

EOFY planning is most effective when it is done before 30 June, not after.

Whether you operate through a company, trust, partnership or as a sole trader, now is the time to review your tax position, clean up your records and make sure decisions are properly documented.

Bonerath & Co. can help you work through the areas that apply to your business and identify what needs to be actioned before year-end.

If you would like help preparing for 30 June, contact our team today.