The 2026/2027 financial year brings mandatory legislative updates for Australian small- to medium-sized enterprises (SMEs). From 1 July 2026, businesses must change their internal processes to reflect new superannuation payment timelines, new payroll calculation methods and new tax offset rules governing tax offsets. This guide details legislative changes for this financial year and how to comply.
1. Superannuation and Payroll Updates
Payday Super Payment Requirements
The Payday Super legislation means that from 1 July 2026, employers must pay superannuation in addition to salary and wages. Employers are responsible for ensuring superannuation contributions are received and allocated to the correct superannuation fund within 7 business days of the payday.
Missed and late payments may result in Superannuation Guarantee Charge obligations, including administrative uplifts. A seven-day payment window means bank feed reconciliation delays could mean missed deadlines. Establishing daily ledger management supported by accurate bookkeeping helps ensure transactions are processed, approved and funded on time.
Closure of the Small Business Superannuation Clearing House
The ATO’s Small Business Superannuation Clearing House (SBSCH) closed permanently on 30 June 2026. Former users of this free service should now have transitioned to a SuperStream-compliant commercial clearing house for ongoing superannuation obligations for employers. Modern payroll software platforms already include a clearing house feature, but setup is required to verify employee fund details before the first Payday Super cycle.
The Shift to 'Qualifying Earnings'
While the Superannuation Guarantee rate remains 12% for the 2026/27 financial year, the way it is calculated has changed. The ATO has substituted Qualifying Earnings (QE) for Ordinary Time Earnings (OTE).
The new QE framework is broader. It includes all commissions, plus certain allowances and salary-sacrificed amounts that may previously have been exempt under OTE rules. It also applies to contractors paid mainly for their labour.
Employers must review payroll software configuration to ensure pay categories are correctly mapped to new QE definitions. Correctly adjusting software for QE calculation avoids systematic underpayment. Implementing these updates in conjunction with comprehensive payroll outsourcing ensures complex allowances are mapped correctly, and QE and super liability are reported correctly via Single Touch Payroll (STP).
Annual Maximum Contribution Base
The maximum contribution base has changed from a quarterly calculation to an annual limit under the new Payday Super regime. For the 2026/27 financial year, this annual cap is set at $270,830. Once an employee’s cumulative qualifying earnings for a financial year reach this annual threshold, employers are no longer required to pay the 12% SG on any further earnings for the remainder of that financial year. Payroll systems will have to track this cap over the full twelve months instead of resetting each quarter.
2. Industrial Relations and Wage Adjustments
National Minimum Wage Increase
There is a 6% rise in the National Minimum Wage for the first full pay period starting 1 July 2026 following the Fair Work Commission’s Annual Wage Review. This raises the base rate to $26.44 per hour, or $1,004.90 for a standard 38-hour week.
It also raises minimum rates for all 122 Modern Awards by 4.75%. Employers must update interconnected penalty rates, split-shift allowances, and overtime calculations. Managing these complex penalty rate updates across a large workforce requires robust systems. This is especially relevant for franchise accounting, which mandates standardisation of award rates across sites to maintain compliance and prevent underpayment.
3. Federal Budget Tax Measures
Permanent $20,000 Instant Asset Write-Off
The Federal Government proposes the $20,000 instant asset write-off as a permanent feature of simplified depreciation rules for small businesses with an aggregated annual turnover of less than $10 million, taking effect from 1 July 2026.
Eligible businesses can immediately deduct the full cost of assets under $20,000, if the asset is first used or installed ready for use in the income year. Assets over $20,000 can continue to be placed in the small business depreciation pool, where they are depreciated at 15% in the first 12 months and 30% in subsequent years. This permanent measure imposes clear parameters for capital expenditure planning.
Reintroduction of the Loss Carry-Back Scheme
For income years commencing on or after 1 July 2026, the Government has proposed to permanently reintroduce the loss carry-back regime. Eligible corporate tax entities with an aggregated annual turnover of less than $1 billion may carry eligible tax losses back against tax paid in the previous two income years, subject to the relevant legislative requirements.
This may generate a refundable tax offset, subject to the company’s franking account balance and the relevant eligibility requirements. The offset is capped at the amount of the company’s franking balance at the end of a loss year. Access to this refundable offset requires current financial records and fully lodged tax returns.
4. Updated Reporting Expectations
With the introduction of Payday Super and ongoing STP Reporting requirements, businesses will be required to report payroll and superannuation more consistently and in shorter timeframes. Now that financial controllers are no longer required to reconcile superannuation liability at the end of each quarter, they must treat superannuation reporting and payment as an operational task carried out once a week or fortnightly alongside normal payroll processing. Meeting these reporting cycles is critical for adherence to the ATO’s brand new enforcement frameworks.
Final Thoughts
In the 2026/27 financial year, several important changes impact how Australian businesses manage payroll, superannuation, tax planning and financial reporting. From Payday Super and Qualifying Earnings to new wage rates and Federal Budget measures, businesses should review their payroll systems, internal processes and financial records to ensure they stay compliant year-round.
Rather than wait until year-end, periodic reviews of payroll, bookkeeping and accounting processes can identify issues early, reduce administrative pressure and support accurate reporting under the new requirements.
How Befree Can Help
Meeting changing tax and payroll obligations requires accurate financial records and well-managed back-office processes. Befreeprovides businesses with accounting, bookkeeping and payroll outsourcing services that simplify financial administration while supporting ongoing compliance.
Our experienced finance professionals support Australian businesses with reliable back-office solutions that keep financial operations organised and compliant. Contact Befree today to learn how our accounting and payroll specialists can help streamline your financial operations and support your business throughout the new financial year.