New Financial Year: Plan for 2025/26 as a Small Business Owner in Australia
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal, financial, or medical advice. Please consult with a qualified professional for advice tailored to your specific situation.
The start of a new financial year is a pivotal time for small business owners in Australia. It’s an opportunity to reflect on the past year, assess your business’s performance, and set strategic goals for the year ahead.
The 2025/26 financial year brings with it new opportunities, challenges, and regulatory changes that small business owners need to be aware of.
In this blog post, we’ll explore what’s new for the 2025/26 financial year, provide actionable tips for planning, and highlight key updates to consider as you prepare your business for success.
What’s New in the 2025/26 Financial Year for Small Business Owners in Australia?
The Australian government regularly introduces changes to tax laws, regulations, and support programs that impact small businesses. For the 2025/26 financial year, here are some of the key updates and changes that small business owners should be aware of:
1. Updates to Tax Thresholds and Deductions
The Australian Taxation Office (ATO) has announced adjustments to tax thresholds and deductions for small businesses. These changes include:
Increased Instant Asset Write-Off Threshold: The instant asset write-off threshold has been extended to $25,000 for eligible small businesses. This allows businesses to immediately deduct the cost of assets purchased for business use, improving cash flow and encouraging investment in growth.
Changes to Company Tax Rates: The company tax rate for small businesses with an annual turnover of less than $50 million remains at 25%, continuing the government’s commitment to supporting small businesses with lower tax rates.
2. Superannuation Guarantee Increase
From July 1, 2025, the superannuation guarantee rate will increase from 11% to 11.5%. This means employers will need to contribute more to their employees’ superannuation funds. While this is a positive step for employees’ retirement savings, it’s essential for small business owners to factor this increase into their payroll budgets.
3. Digital Transformation Incentives
The government is continuing its push for digital transformation among small businesses. For the 2025/26 financial year, new incentives have been introduced to encourage businesses to adopt digital tools and technologies:
Small Business Technology Investment Boost: Eligible businesses can claim an additional 20% deduction on expenses related to digital tools, such as cloud computing, e-commerce platforms, and cybersecurity solutions.
Cybersecurity Grants: Grants are available to help small businesses improve their cybersecurity infrastructure, protecting them from the growing threat of cyberattacks.
4. Sustainability and Climate Initiatives
Sustainability remains a key focus for the Australian government. Small businesses are being encouraged to adopt environmentally friendly practices through:
Green Business Grants: Funding is available for businesses that invest in energy-efficient equipment, renewable energy solutions, or sustainable practices.
Carbon Reporting Requirements: Businesses in certain industries may need to comply with new carbon reporting requirements, aligning with Australia’s commitment to net-zero emissions by 2050.
5. Workforce Development Programs
To address skills shortages, the government has introduced new workforce development programs, including:
Subsidies for Hiring Apprentices and Trainees: Small businesses can access subsidies for hiring and training apprentices in key industries.
Upskilling Grants: Grants are available to help businesses upskill their employees in areas such as digital literacy, leadership, and sustainability.
How to Plan for the 2025/26 Financial Year
Planning strategically for the new financial year is essential for small business success. Here’s a step-by-step guide to help you prepare:
1. Review Your Business Performance
Start by reflecting on the past financial year. Ask yourself:
Did you meet your financial and operational goals?
What were your biggest challenges and successes?
Are there areas where you can improve efficiency or reduce costs?
Use this analysis to identify trends and opportunities for growth in the new financial year.
2. Update Your Business Plan
Your business plan should be a living document that evolves with your business. Update it to reflect:
New goals and objectives for 2025/26.
Changes in your target market or industry trends.
Strategies for leveraging new government incentives or grants.
3. Budget for the Year Ahead
Create a detailed budget that accounts for:
Increased superannuation contributions (11.5% from July 1, 2025).
Planned investments in technology, equipment, or sustainability initiatives.
Marketing and advertising expenses to drive growth.
Ensure your budget includes a contingency fund for unexpected expenses.
4. Leverage Tax Incentives
Take advantage of the tax incentives available for the 2025/26 financial year, such as the instant asset write-off and technology investment boost. Work with your accountant or financial advisor to ensure you’re maximizing your deductions and minimizing your tax liability.
5. Embrace Digital Transformation
Investing in digital tools and technologies can streamline your operations, improve customer experiences, and drive growth. Consider:
Upgrading your accounting software to improve financial management.
Implementing a customer relationship management (CRM) system to enhance customer engagement.
Strengthening your cybersecurity measures to protect your business from cyber threats.
6. Focus on Sustainability
Sustainability is not just good for the planet—it’s also good for business. Consumers are increasingly choosing to support environmentally responsible businesses. Consider:
Reducing your energy consumption by upgrading to energy-efficient equipment.
Offering eco-friendly products or services.
Communicating your sustainability efforts to customers through marketing campaigns.
7. Invest in Your Team
Your employees are your greatest asset. Invest in their development by:
Providing training and upskilling opportunities.
Offering flexible work arrangements to improve work-life balance.
Recognizing and rewarding their contributions to your business.n by expressing gratitude, respecting their time, and keeping them updated on your progress.
Key Updates to Consider for the New Financial Year
As you plan for the 2025/26 financial year, keep these updates in mind:
1. Compliance with New Regulations
Ensure your business complies with new regulations, such as the increased superannuation guarantee rate and carbon reporting requirements. Non-compliance can result in penalties and damage to your reputation.
2. Cash Flow Management
Cash flow is the lifeblood of any small business. Monitor your cash flow closely and take steps to improve it, such as:
Offering discounts for early payments from customers.
Negotiating longer payment terms with suppliers.
Reducing unnecessary expenses.
3. Marketing and Customer Engagement
The new financial year is a great time to refresh your marketing strategy. Focus on:
Building your online presence through social media and digital advertising.
Engaging with customers through personalized email campaigns.
Collecting and analyzing customer feedback to improve your products or services.
4. Risk Management
Identify potential risks to your business and develop strategies to mitigate them. This includes:
Reviewing your insurance coverage to ensure it meets your needs.
Implementing cybersecurity measures to protect your business from data breaches.
Diversifying your revenue streams to reduce reliance on a single source of income.
Final Thoughts
The 2025/26 financial year presents exciting opportunities for small business owners in Australia. By staying informed about new regulations and incentives, updating your business plan, and investing in your team and technology, you can position your business for success. Remember, planning strategically and staying adaptable are key to navigating the challenges and opportunities of the new financial year.
As you prepare for the year ahead, don’t hesitate to seek professional advice from accountants, financial advisors, or business consultants. With the right strategies in place, you can achieve your goals and make 2025/26 your most successful year yet.
What are your thoughts on all these changes? How are you going to plan for the new financial year? Share your experiences and tips in the comments below!
There are many ways of working with professionals. Start small, but keep it regularly and don’t wait until something happens. Strategic planning and periodic reviews are a great start to implement those strategies.
Perfectly Organised NT can assist with a financial review and strategic business planning & management. Find out more!
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