The Australian 2025-2026 financial year is fast approaching, and there are several updates and changes that all businesses need to be aware of. Let’s look at the latest and get prepared for the coming financial year.
Superannuation Guarantee increases to 12%
The superannuation guarantee will increase to 12% from 1 July 2025 from the current 11.5% rate. If you have employees for your small business, you must cover this increase in the new financial year 2025-2026; failure to do so will result in the superannuation guarantee charge (SGC).
This will mark the last increase in the minimum amount businesses must contribute to their employees’ super funds. The minimum guarantee may increase again in the future, but no news has been announced.
This change will be built into your payroll software and automatically reflect on your employees’ payslips. One of the most common mistakes employers make when processing super contributions is forgetting to pay super contributions outside of regular salary and wages. To avoid the superannuation guarantee charge fine from the ATO, process your payroll, bank payments, and reconcile.
$20,000 instant asset write-off extension
During the election campaign period, the Labor Government had no plans to extend the popular instant asset write-off when the federal budget was announced in March. In April, however, the government recommitted to an extension and has now increased the period businesses can write off $20,000 in assets from 1 July 2025 to 30 June 2026.
If you are unfamiliar with the instant asset write-off and are looking to use it for your business, it is best to read up on the details of the policy. If you are unsure, speak with a bookkeeper or accountant for best practice advice.
Minimum wage increases by 3.5%
The Fair Work Commission has announced from their annual wage panel that they will increase the current minimum wage by 3.5%. This will see the current $24.10 minimum move to $24.95. Workers paid the minimum wage will expect to see about $32 more in their paycheck per week, or between $1,536 and $1,664 more on the year.
This will take immediate effect from 1 July 2025, so make sure your payroll software updates the necessary changes.
Right to Disconnect applies to small businesses
The last significant change that small businesses will need to account for is the Right to Disconnect law, which will now also apply to businesses with 14 or fewer employees.
The Right to Disconnect will affect small businesses from 26 August 2025. This means that small businesses will be held to the same standard as all other Aussie businesses when it comes to contacting employees outside of their regular working hours.
Employee Choice Pathway applies to small businesses
Small businesses must comply with the new changes to casual employment from 26 August 2025. The employee choice pathway is a policy that allows casual employees to initiate permanent employment with their employers after 12 months of continuous work.
Under the previous National Employment Standard, employers controlled the progression to permanent employment with their workers. The new framework will result in open communication and options for both the employer and employee that are no longer one-sided.
Tips on how to be ready for the 2025-2026 Financial Year
For the changes that are coming for the new financial year, the best way to set your business up for success is to:
- Check whether your payroll is compliant with the changes to the Superannuation Guarantee.
- Input the minimum wage increase into your payroll software, if applicable.
- Ensure you understand the policy of the instant asset write-off if your business plans to claim it.
- Speak to your employees about the Right to Disconnect policy in your workplace and ensure everyone is on the same page.
- Be open with your casual employees if they seek permanent work through the employee choice pathway.
To prepare for the new financial year, you must be informed. If you are unsure what is required for your business, it is always worth speaking with a financial advisor, bookkeeper, or accountant.
