As June 30 approaches, Australian businesses are gearing up to close the books on one financial year and step into the next. But this year’s transition into FY 2026 is more than just routine. With economic signals softening, workforce pressures increasing and policy changes coming into effect, this EOFY marks a critical checkpoint for how prepared organisations really are. What challenges are coming, and how should employers respond?
Economic Growth Slows but Signals are Mixed
Australia’s economy is forecast to grow by 1.8 percent in 2025 and lift slightly to 2.2 percent in 2026. While that reflects resilience, it also marks a cooling trend. Private investment outside the mining sector dropped by 1.6 percent, suggesting businesses are holding back amid uncertainty. For employers, this signals a need for cautious planning and sharper financial decision-making.
Tax Changes and Superannuation Shifts Ahead
From July 1, 2025, the superannuation guarantee rate will rise from 11.5 percent to 12 percent. That means higher costs for employers, especially those managing large or casual workforces. At the same time, individual tax cuts are set to roll out over the next two years. These will reduce the rate on incomes between $18,201 and $45,000 from 16 to 15 percent in 2026, and again to 14 percent in 2027. These changes will influence take-home pay, salary expectations and future employment negotiations.
Finalising EOFY Obligations and Opportunities
EOFY also brings deadlines. Single Touch Payroll reports are due by July 14, and failing to submit them correctly can result in fines. For small and medium businesses, this is the last year to access the instant asset write-off before it is set to expire. Investing in tech, vehicles or equipment before June 30 may help reduce taxable income and increase operational capacity heading into the new year.
Wages are Not Keeping Up with Workforce Demand
The labour market has grown rapidly, with over one million new jobs created since 2022. Yet real wages are forecast to grow by just 0.5 percent in 2025. In an environment where inflation is easing but costs remain high, this slow wage growth could create tension. Employers may need to find other ways to retain and motivate staff—through flexibility, training or improved working conditions.
Getting Ahead of the New Financial Year
FY 2026 will reward businesses that act early and plan thoroughly. From budgeting and compliance to workforce strategy and tax planning, there is a lot more at stake than balancing the books. EOFY is not just about closing one chapter—it is about setting the tone for everything that comes next.
