2026 Federal Budget – What Small Businesses Need to Know

The 2026 Federal Budget includes a number of proposed changes that may impact small businesses over the coming years. While some measures could have a significant effect, many are still subject to legislation and won't commence until 2027 or later.

For now, the best approach is to stay informed, maintain accurate records, and ensure your business reporting remains up to date.

Instant Asset Write-Off

The Government has proposed making the $20,000 Instant Asset Write-Off permanent from 1 July 2026 for eligible small businesses with an annual turnover under $10 million.

This would allow eligible businesses to immediately deduct the cost of assets under $20,000, providing greater certainty for future purchasing decisions.

Payroll and Reporting

With ongoing expansion of Single Touch Payroll (STP) reporting and increased use of payroll data by government agencies, accurate and timely payroll processing remains more important than ever.

Businesses should ensure payroll systems and employee records are kept current and compliant.

Digital Business Systems

Further investment has been announced for:

• myID

• Relationship Authorisation Manager (RAM)

• Business registers

• Digital identity infrastructure

The focus is on improving security and streamlining access to government services.

PAYG Instalments

The ATO's proposed Dynamic PAYG Instalments program is expected to expand in future years, potentially allowing businesses to calculate PAYG instalments directly through their accounting software.

Further details are expected from the ATO before implementation.

Proposed Tax Changes

The Budget also includes several proposed tax measures, including:

• A $250 Working Australians Tax Offset.

• A proposed $1,000 standard deduction for eligible work-related expenses.

• Company loss carry-back provisions for eligible businesses.

• Changes to Capital Gains Tax from 1 July 2027.

• Proposed changes to negative gearing arrangements.

• Proposed taxation changes for discretionary trusts from 1 July 2028.

As these measures are not yet law, businesses and investors should avoid making major decisions until further details are released.

Support for Business Owners

Funding has been extended for:

• Small Business Debt Helpline

• NewAccess for Small Business Owners mental health coaching program

These services continue to provide valuable support for business owners facing financial or personal challenges.

What Should Businesses Do Now?

While many of the proposed changes are still some time away, we recommend businesses focus on:

✔ Maintaining accurate financial records

✔ Keeping payroll and STP reporting up to date

✔ Reviewing asset registers and depreciation schedules

✔ Ensuring Digital ID and government access arrangements are current

✔ Seeking professional advice before making major structural or tax decisions

We will continue to monitor developments and keep our clients informed as legislation progresses and further details become available.

If you have any questions about how these proposed measures may affect your business, please contact the team at Bookkeeping N More.