EOFY 2026 Is Different: Rate Rises, Payday Super, ATO Crackdowns

Every financial year has its compliance deadlines and this one has a few worth paying attention to.

Interest rates are up. A major super reform lands 1 July. The ATO is enforcing harder than it has in years and for business owners with significant super balances, a new tax regime starts ticking at the same time. Here's what's converging and what to do about each.

Interest rates: higher for longer

The RBA recently raised the cash rate to 3.85%. The decision was unanimous, citing persistent inflation and tight labour conditions. Economists are flagging further possible rate hikes this year.

If you're carrying business loans, equipment finance, or a commercial property mortgage, don't plan around today's rate. Plan around the rate you might be paying in six months.

Action: If the cash rate goes up, so will your repayments. Try modelling them a step or two higher than where they are now. If that creates pressure, talk to one of our adviser now, while you're negotiating from stability, not urgency.

Payday Super: it will affect your cash flow

From 1 July 2026, super must be paid every pay cycle and reach the employee's fund within seven days. No more quarterly buffer. The ATO's Small Business Superannuation Clearing House also closes on the same date.

For employees, this is a win: faster compounding and quicker detection of non-payment. For employers with uneven cash flow, it requires real planning.

Action: Talk to your payroll provider about readiness. Model super as a per-cycle cost, not quarterly. Set up a dedicated buffer account now so July doesn't catch you short.

ATO enforcement: the post-COVID reckoning

The ATO is pursuing over $35 billion in unpaid small business tax. COVID-era leniency is finished. They are using director penalty notices, credit reporting, and even intercepting payments owed to your business to recover what's outstanding.

Key risk areas for 2026: small business CGT concessions, private use of business funds, GST compliance, non-commercial losses, and cash economy reporting. Their data matching is more sophisticated than ever, pulling from banks, registries, and payment platforms to spot discrepancies in real time.

Action: Reconcile BAS to books. Review GST codes. Separate business and private expenses clearly. If you have outstanding lodgements or debts, engage proactively. Voluntary disclosure reduces penalties significantly.

Division 296: the super tax that changes exit planning

If your total super exceeds $3 million, Division 296 is directly relevant. Set to commence 1 July 2026, earnings above $3 million will be taxed at 30% (up from 15%), and above $10 million at 40%.

The first assessment is 30 June 2027, with a transitional rule: only your end-of-year balance is tested, not start-of-year. SMSFs holding illiquid assets can opt in to reset cost bases to market value as at 30 June 2026, but this requires a formal election before the 2026-27 return is lodged.

Action: If your super is anywhere near $3 million, get specific advice before 30 June 2026. If you're selling a business and rolling proceeds into super, these thresholds need to be factored in now.

Succession: if not now, when?

These changes converge most acutely on business owners approaching an exit, whether that's retirement, a sale, a management buyout, or a handover to the next generation.

Most business owners know they need a succession plan. Very few actually have one. And the ones who do often haven't reviewed it against a landscape that looks nothing like it did some years earlier.

A succession plan isn't just about who takes over. It's about structuring the transition to maximise value, access the right tax concessions, protect your super, and leave the business in a position to thrive without you. That requires your accountant, financial adviser, lawyer, and broker all working from the same page.

Action: If you don't have a succession plan, start one. If you do, review it against Division 296, CGT scrutiny, the rate environment, and your personal timeline.

Your EOFY checklist

• Stress-test borrowings against possible rate rises.
• Model business cash flow with super as a per-cycle cost, not quarterly.
• Check for outstanding ATO lodgements or debts and engage proactively.
• Review your structure against the ATO's top five risk areas.
• Confirm payroll and accounting software are ready for Payday Super.
• If your super is near $3 million, seek financial advice.
• If you're planning to exit your business in the next 5 to 10 years, start your succession plan now.

The simple way to tick everything off

None of this needs to be overwhelming, but it does need to be done. Ledgersmith covers accounting, tax, super, financial advice, and lending under one roof. If you'd like one team that's across everything, get in touch.