Prime Ledger Accounting Blog

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Payday Super Becomes Mandatory

From 1 July 2026, employers must pay superannuation at the same time as wages, not quarterly. This is the biggest superannuation compliance change in years.

 

This change aims to reduce unpaid super and strengthen long‑term retirement savings for workers. Businesses will need to update payroll systems to stay compliant, as the ATO increases real‑time monitoring of super payments. Staying prepared for the payday super changes will help employers avoid penalties and maintain smooth payroll operations.

 

What this means:

 

  • Super must reach the employee’s fund within 7 business days of payday.

  • First payment for a new employee within 20 business days.

  • ATO will monitor payments in real time via Single Touch Payroll.

  • ATO will take a “soft compliance” approach in the first year for employers making genuine efforts.

 

ATO Small Business Superannuation Clearing House (SBSCH) to Close on 1 July 2026

From 1 July 2026, the ATO Small Business Superannuation Clearing House (SBSCH) will officially close, marking a major shift for small employers managing super payments. Businesses that previously relied on the free ATO service will need to transition to a Super Stream‑compliant commercial clearing house or use the clearing tools built into their payroll software. With the SBSCH shutting down, employers should download their historical records and update their payroll processes early to ensure compliance and avoid disruptions to employee superannuation payments.

New Personal Income Tax Cuts Begin on 1 July 2026

From 1 July 2026, new personal income tax cuts will come into effect, delivering savings for millions of Australians. The tax rate for income between $18,201 and $45,000 will drop from 16% to 15%, giving low‑ and middle‑income earners a noticeable boost in take‑home pay. These changes are part of the government’s broader tax reform plan aimed at easing cost‑of‑living pressures and supporting household budgets. Understanding the 2026 tax cuts now can help individuals plan ahead and make the most of the updated tax thresholds.

 

Federal Budget 2026–27 at a Glance

1) 2026–27 Personal Income Tax Changes 

The Government has confirmed previously legislated personal income tax cuts for Australian taxpayers.

From 1 July 2026, the 16% tax rate on taxable income between $18,201 and $45,000 will reduce to 15%.

From 1 July 2027, the same tax rate will reduce further to 14%.

Every Australian taxpayer will receive a tax cut of up to $268 from 1 July 2026, then up to $536 every year from 1 July 2027, compared to 2024–25 tax settings.

2) $1,000 Instant Work-Related Deduction from 2026–27

The Budget includes a proposed $1,000 instant deduction for eligible work-related expenses.

Under the proposal, workers would be able to claim up to $1,000 in work-related deductions without keeping receipts when lodging their tax return.

3) Capital Gains Tax Changes for Property Investors

The 2026 Federal Budget introduces major CGT changes for property investors.

From 1 July 2027, the current 50% CGT discount will be replaced with inflation‑based indexation, meaning tax will apply only to real (inflation‑adjusted) gains.

A minimum 30% tax rate will also apply to taxable capital gains, while new residential builds may access more favourable treatment. All gains accrued before 1 July 2027 keep the existing 50% discount, ensuring current investments are protected.

4) Negative Gearing Changes from 1 July 2027

From 1 July 2027, negative gearing will be restricted to newly built residential properties, marking a major shift for property investors.

This means investors purchasing existing properties after this date will no longer be able to deduct rental losses against their wage or salary income.

However, all current investment properties are fully grandfathered, so existing negative‑gearing arrangements remain unchanged. The reform is designed to redirect investor demand toward new housing supply, supporting construction and easing pressure on the broader housing market.

5) Discretionary Trust Tax Changes

The Federal Budget announced proposed changes to the taxation of discretionary trusts.

From 1 July 2028, trustees would generally pay a minimum 30% tax on taxable trust income unless higher tax rates apply.

Any distribution taxed below 30% will be topped up to meet the new minimum, reducing the effectiveness of income‑splitting and aligning trust income more closely with wage income.

6) $20,000 Instant Asset Write-Off Made Permanent

The Government has announced it will make the $20,000 instant asset write-off permanent from 1 July 2026.

Small businesses with turnover under $10 million will be able to immediately deduct eligible assets costing less than $20,000 in the year of purchase.

This measure is estimated to improve cash flow for small businesses by around $890 million over the next five years and save around $32 million per year in compliance costs.

Previously, this measure had been renewed annually. Making it permanent provides certainty for investment planning.

 

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