Australian New FY Refresher: What You Need to Know
As the calendar resets for another financial year, now is the ideal moment to pause and assess how prepared you are for the challenges and opportunities ahead using our Australian New FY Refresher.
Whether you’re a business owner, sole trader, or managing your personal finances, understanding the financial year is absolutely crucial for making informed decisions that will optimise your financial health. That’s why we created this Australian new FY refresher. With this, you have a timely roadmap to keep you on track with key deadlines, obligations, and valuable opportunities throughout the year.
Remember, the financial year is far more than just a timeline. When approached strategically, it can become a powerful tool to significantly improve your tax outcomes and drive business success.
What Exactly is a Financial Year?
Unlike the calendar year which runs from 1 January to 31 December, the Australian financial year (FY) spans from 1 July to 30 June. This 12-month period serves as the official timeline for income reporting, expense tracking, and taxation across the country.
The financial year system was adopted in the 19th century. It aligns with the British administrative practices from colonial times and also accommodating the Southern Hemisphere’s seasonal patterns.
Furthermore, this was implemented to standardise accounting and taxation processes across Australia’s growing economy. It continues to provide a consistent framework for assessing financial performance and compliance. By aligning tax activities within a set period, the system ensures fairness, transparency, and easier management of public revenue.
Australian New FY Refresher: Key Dates and Deadlines
Each FY comes with important deadlines that every taxpayer and business must obviously observe. Because of this, we will start our Australian new FY refresher by knowing the key dates. This is important since missing them can result in penalties, interest charges, as well as lost opportunities to optimise your financial outcomes. Here is a breakdown of essential dates and what they mean:
• 1 July: Start of the Financial Year
This marks the beginning of a new financial cycle. From this date, individuals and businesses should begin preparing records. You must also start reviewing budgets, and planning for tax obligations and deductions.
• 1 July to 31 October: Tax Lodgment Window for Individuals
This period is surely important because it’s the official period in which individuals in Australia must submit their tax returns for the previous FY if they are self-lodging. Meeting the 31 October deadline is essential to avoid significant consequences from the ATO such as:
- Avoidance of financial penalties
If you lodge your tax return late without using a registered tax agent, you face a failure-to-lodge penalty starting at $330 for the first 28 days late. This increases by $330 every 28 days, up to a maximum of $1,650.
- Avoidance of interest charges
On top of penalties, the ATO may apply General Interest Charges (GIC) on any unpaid tax amounts, which compound daily and can escalate the debt substantially.
- Prevention of default assessments
Late lodgement can lead the ATO to issue default tax assessments using limited information. This can significantly result in higher-than-actual tax bills.
- Preserving payment options and arrangements
Missing the deadline can reduce access to payment plans or tax arrangements, increasing financial pressure. In serious cases, the ATO can pursue garnishee orders against your bank accounts or wages.
- Extension eligibility through tax agents
Using a registered tax agent before 31 October grants an automatic lodgment extension. Typically, this extends the deadline up to May of the following year, reducing the risk of penalties.
• 14 July: STP Finalisation for Employers
Employers must finalise employees’ income statements via Single Touch Payroll (STP) by this date. Employees will then access these through myGov for their own tax returns.
• 28 July / 28 October / 28 January / 28 April: BAS Lodgments for Quarterly Filers
Businesses that report GST and PAYG quarterly must submit Business Activity Statements (BAS) by these dates. However, keep in mind that monthly or annual lodgers follow different schedules.
• Superannuation Guarantee Payment Deadlines
Super contributions must be paid at least quarterly. For example, 28 July is the deadline for quarter four (April–June) super payments to avoid shortfall penalties.
• 30 June 2026: End of the Financial Year
This is the final day to make deductible purchases, record business expenses, as well as prepare for reconciliations. Prior to this date, you need to ensure financial records, receipts, and payroll data are complete to support accurate tax filing.
Note: Specific lodgment and payment dates can vary, especially if you use a registered tax agent. It’s always best to consult the official ATO website or your tax professional for the most accurate and up-to-date information.
The Essentials: What You’re Required to Do
We created this Australian new FY refresher with the aim to help you understand the specific obligations that apply to your category.
For Individuals
Here’s what you need to keep in mind if you’re an individual:
- Lodging a tax return for income earned during the past FY if your income exceeds certain thresholds. This can also be the case if you meet other specific criteria set by the ATO including receiving government payments or running a business.
- Reporting all income streams such as salaries, rental income, freelance work, dividends, as well as more for accurate assessment of your taxable income. Omitting any income can certainly lead to reassessments, penalties, or interest charges from the ATO. This comprehensive reporting ensures transparency and correct tax liability.
- Claiming deductions like work-related expenses, charitable donations, and education costs directly reduce your taxable income. In turn, you can potentially lower your tax payable. Properly documenting and justifying deductions can maximise your refund or minimise tax owed while staying compliant.
- Understanding tax offsets (such as the low-income tax offset) so you can identify available credits or reliefs that can further reduce your tax bill. Knowing which offsets you qualify for enables more precise tax planning and financial benefit.
For Businesses
If you operate a business or are a sole trader, your obligations are significantly broader and more complex, reflecting your additional responsibilities like:
- Lodging BAS regularly to report and pay GST, PAYG withholding, and other tax obligations. Timely BAS lodgment helps you maintain good standing with the ATO and manage cash flow efficiently.
- Meeting superannuation obligations to ensure your employees’ retirement savings are compliant with legislated minimum contributions. This is to avoid penalties and protect workforce satisfaction.
- Keeping payroll updated and reporting via STP is also mandatory for accurate reporting of wages, tax withholdings, and superannuation obligations. This facilitates correct employee taxation as well as super contributions.
- Preparing year-end financial reports and lodging your company tax return provides transparency and meets legal requirements, helping manage profit, losses, and tax liabilities appropriately.
- Reconciling accounts and maintaining accurate financial records is critical for audits and reviews. Sound bookkeeping supports compliance, strengthens business management decisions, and reduces the risk of costly ATO investigations or penalties.
What Changed This Year: ATO Updates to Know
Each FY brings important updates from ATO that evidently affect compliance, reporting, thresholds, and obligations for individuals, businesses, and tax professionals. Staying informed about these changes is essential because ignoring them can lead to:
1. Increased Instant Asset Write-Off Threshold
The ATO has extended the instant asset write-off for eligible businesses with an aggregated turnover of less than $10 million. For FY 2025-2026, the threshold remains at $20,000 per asset, allowing small businesses to immediately deduct the cost of eligible purchases, such as office equipment, machinery, or technology upgrades.
2. Adjustments to Superannuation Guarantee Rate
The Superannuation Guarantee (SG) rate has officially increased from 11% to 11.5% as part of the ongoing scheduled rise toward 12% by 2026. Employers must ensure their payroll systems reflect this adjustment to avoid underpayment issues and penalties.
3. Expansion of eInvoicing Requirements
The Superannuation Guarantee (SG) rate has officially increased from 11% to 11.5% as part of the ongoing scheduled rise toward 12% by 2026. Employers must ensure their payroll systems reflect this adjustment to avoid underpayment issues and penalties.
4. Crackdown on Work-From-Home Claims
Following a significant increase in work-from-home deduction claims, the ATO is tightening its scrutiny. Taxpayers must now maintain detailed records of hours worked and itemised expenses, rather than relying on estimates. The fixed-rate method remains available but is subject to stricter substantiation rules.
5. Focus on Cryptocurrency and Digital Assets
The ATO has flagged increased surveillance on cryptocurrency transactions. If you’re investing in or trading in digital assets, you are now required to report capital gains and losses more precisely, with crypto exchanges expected to report customer activity more rigorously to the ATO.
6. Updated PAYG Withholding Schedules
The PAYG withholding tax tables have been revised to reflect changes in income tax thresholds and Medicare levy adjustments. Employers must use the updated ATO tables from 1 July 2025 to ensure accurate employee withholdings.
The Hidden Costs of Getting It Wrong
Failing to meet your tax obligations or submitting inaccurate returns can lead to serious financial and legal consequences. Beyond costly ATO penalties and accumulating interest charges, you risk missing out on valuable tax benefits and exposing yourself to unnecessary audits that create stress and disruption.
Even seemingly minor errors or delays can trigger red flags with the ATO, escalating problems quickly. For example, late lodgment penalties start at $330 for just one day overdue and can grow to a maximum of $1,650, plus interest charges that compound daily, significantly increasing what you owe.
New FY, New Challenges. Are You Prepared?
Feeling overwhelmed? This can surely be the case, especially if you have to juggle everything by yourself. However, you don’t have to do it alone. Our experienced team can manage every step, accurately and on time, so you stay focused on your personal goals.
Plan Smart. Stay Compliant. Move Forward.
Ready to Make This Your Smoothest Financial Year Yet?
This Australian new FY refresher is your reminder to take charge early. With Bodeccia’s help, you can avoid delays, maximise deductions, and stay compliant with confidence.
We work with you, not just for you, to help you stay one step ahead. Let’s build a custom plan that gives you more control, fewer worries, and real financial peace of mind.
