What the 2025–26 Federal Budget Means for You

The 2025–26 Federal Budget has landed, and while the headlines focus on cost-of-living relief, there’s plenty in it for business owners to pay attention to. From tax incentives and compliance crackdowns to employment law changes, this year’s budget includes updates that will affect your cash flow, your systems, and even your employment contracts.

Here’s a breakdown of the most relevant updates – and what they mean for you.

1. Tax Cuts = More Disposable Income

From 1 July 2026, the personal tax rate for incomes between $18,201–$45,000 will reduce from 16% to 15%, and drop again to 14% in July 2027. That’s up to $536 in annual savings for individuals.

Why it matters for business: This may ease pressure on household budgets and employee wage expectations. It’s also worth noting in your own planning if you draw a wage or directors’ fees from your business.

2. HELP Debt Relief

There’s a one-off 20% reduction for all outstanding HELP (student) loans, which will be applied automatically. Plus, the minimum repayment threshold will rise from $54,435 to $67,000.

What this means: Younger employees (and maybe you!) will see a bit more in the bank each pay cycle. That can reduce pressure on pay rises…or at least give everyone a little more breathing room.

3. ATO Compliance Funding = More Scrutiny

This budget includes over $1 billion in funding for various ATO compliance programs. Here are the highlights:

• $717.8m for the Tax Avoidance Taskforce (multinationals)

• $155.5m for the Shadow Economy Compliance Program (under-reported income, worker exploitation)

• $75.7m for personal tax compliance

• $50m focused on timely tax and super payments by medium and large businesses

👉 Translation: Expect more audits. Now is the time to ensure your bookkeeping is accurate, your super is paid on time, and your reporting is up to date. If you’ve let things slide – sort it before they come knocking.

📎 You can find ATO record keeping requirements for businesses here:
https://www.ato.gov.au/Business/Record-keeping-for-business/

4. Instant Asset Write-Off Extended

The $20,000 instant asset write-off is extended until 30 June 2025 for small businesses.

This allows eligible businesses to immediately deduct the cost of assets under the threshold, rather than depreciating them over time.

💡 Tip: If you’ve been putting off purchases…like equipment or tech – this could be your EOFY green light. Just make sure they’re genuinely useful to your operations.

5. Energy Efficiency Incentives

A 20% bonus tax deduction is available on energy-efficient upgrades for small businesses.

Worth exploring if you’re due for new lighting, heating, cooling, or appliances. It’s a financial incentive to reduce your power bill and your tax bill.

6. Employment Law: Non-Compete Clauses Banned

From 2027, non-compete clauses will be banned for employees earning under $175,000.

This is a big shift in employment law. If your contracts currently include these clauses, you’ll need to revise them in the next two years.

7. Payday Super is Coming

From 1 July 2026, employers must pay super at the same time as wages – no more quarterly (or late!) payments.

This change will impact cash flow for many businesses. It also means you’ll need systems in place to track and pay super more frequently.

👉 Get ready now: Talk to your bookkeeper or payroll provider about updating your systems and processes. You don’t want this to become an issue when it goes live.

8. Super Advice Fee Deductibility

From 1 July 2025, financial advice fees paid from super (where related to the fund) will be fully tax deductible.

A good opportunity to review your super strategy—especially if retirement planning has been on the back burner.

9. Cost-of-Living Relief

• $75 energy bill rebates per quarter (extended to December 2025)

• PBS medicine costs dropping to $25 from January 2026

• Expanded childcare access for high-income families (under $533,280) with at least 3 subsidised days per week, regardless of work status

10. Housing Incentives

For investors, the government is expanding support for build-to-rent (BTR) developments through:

• Accelerated depreciation (4% rate)

• Reduced withholding tax (15%) for foreign investors

First home buyers may also benefit from relaxed caps under the Help to Buy Scheme.

Final Thoughts

The theme of this year’s budget is: more enforcement, more incentives, and gradual relief. For business owners, the main takeaways are:

✅ Stay on top of tax compliance – ATO audits are ramping up.
✅ Prepare for payday super now to avoid cash flow issues later.
✅ Check contracts for non-compete clauses and plan updates before 2027.
✅ Consider energy-efficient upgrades or asset purchases before EOFY.
✅ Factor in the personal tax changes in your planning for 2026–27 and beyond.

Need help navigating what this all means for your business?

Let’s chat. At Inline Partners, we help business owners stay compliant, plan ahead, and build financial systems that support sustainable success – not just this year, but long term.

Book in a free discovery call to see how we can help.