The Fair Work Commission’s (FWC) Annual Wage Review decision takes effect from 1 July 2026. If your business employs staff under a modern award or relies on the National Minimum Wage, now is the critical window to audit your payroll systems and ensure strict compliance.

A common mistake among business owners is assuming that every employee simply receives a flat 4.75% increase. That is not the case for the 2026 financial year. Under the FWC’s latest structural adjustments, some employees on the lowest award classifications will receive a higher, targeted increase than the standard headline rate due to the Stage 1 phase-out of the C13 classification.

Failing to adjust these specific pay scales correctly places businesses at severe risk of involuntary underpayment claims and Fair Work Ombudsman (FWO) penalties.

📋 Your 1 July 2026 Payroll Audit Checklist

To safeguard your business against compliance issues, employers should execute a mini payroll audit before processing the first pay cycle in July. Follow these six essential steps:

Confirm Each Employee’s Modern Award Classification

Do not assume last year’s classifications still apply. Review staff roles to ensure their daily duties still align with their current award definitions. Pay close attention to employees who have:

• Taken on more responsibility
• Aged up (junior rates)
• Completed apprenticeships

Any of these milestones may automatically bump them into a higher pay bracket.

Source Official 2026 FWO Pay Guides

Avoid relying on third-party calculators or outdated blogs. Download the official, updated pay guides directly from the Fair Work Ombudsman (FWO) website as soon as they are published in mid-June. Ensure you are looking specifically at the rates marked effective 1 July 2026.

Run Comparative Pay Rate Audits

Line up your existing employee base hourly rates against the newly mandated minimums.

• National Minimum Wage: Ensure anyone on the base rate is moved to $26.44 per hour ($1,004.90 per week).
• Casual Employees: Remember that casual loading (typically 25%) must be recalculated based on the new, higher base rate.

Review Salaried and Annualised Wage Arrangements

If you pay staff an all-inclusive annual salary, you must perform a reconciliation. Ensure that the annual salary is still high enough to cover the new minimum award rates, including any overtime, weekend penalty rates, or allowances the employee actually worked. If the new award minimum outpaces the salary, you must top it up.

Forecast On-Costs (Superannuation & Leave Liabilities)

A wage increase does not happen in a vacuum. It triggers a cascading financial impact across your entire business overhead. Remember to factor in:

• Superannuation Guarantee (SG): Ensure your cash flow accounts for both the higher gross wage and your super obligations.
• Leave Liabilities: Long service leave and annual leave balances must be revalued on your balance sheet to reflect the new, higher hourly pay rates.
• Payroll Tax and Workers’ Compensation: Higher wages will incrementally bump up your state payroll tax obligations and insurance premiums.

⚖️ Do You Have to Increase Above-Award Pay?

A frequent point of confusion for employers is whether the 2026 wage increase applies to staff members who are already paid above the minimum rate.

The short answer: The Annual Wage Review legally changes the minimum safety net.

If an employee is already paid a flat contract rate that sits safely above the newly revised 2026 minimum award rate (including all applicable allowances and penalties), there may not be a legal requirement to increase their pay.

⚠️ Warning: Do Not Guess the Math

Every employee must be reviewed individually. If an above-award rate is absorbed by the new increase, the buffer you once had shrinks. If that employee works significant overtime or night shifts, their flat rate might suddenly fall below the new legal minimum.

The businesses that find themselves facing costly back-pay orders are rarely malicious; they are usually the ones that assumed the changes didn’t apply to them because they “pay well.” Taking a few hours to meticulously audit your payroll data now is the only way to prevent a systemic underpayment issue later.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The headline is simple: “Award wages increase by 4.75% from 1 July 2026”.

But once you look at the detail, it is not that simple.

The Commission has decided to increase the lowest-paid award classifications at a faster rate than the rest of the award system.

As a result, some employees will receive an increase closer to 5.97%, while others receive the headline 4.75%

For example, under the Hospitality Award:

• A Food & Beverage Attendant Grade 1 on $24.95 per hour will increase to $26.44 per hour (5.97% increase).
• But the Food & Beverage Attendant Grade 2 on $25.85 per hour will increase to $27.08 per hour (a 4.75% increase)

Two employees.  Same award.  Different percentage increases.

4 Steps to Ensure Payroll Compliance by 1 July

So, what appears to be a simple annual wage review now requires employers to:

• Review classification levels
• Check updated award rates
• Update payroll systems
• Test for compliance

And that is before considering the inevitable employee conversations when one team member discovers they received a bigger percentage increase than another.

Another day.

Another compliance change.

Another layer of red tape for business owners.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

With the end of the 2026 financial year fast approaching, small business owners must prioritize tax planning right now.  Once 30 June 2026 passes, it is too late to implement legal strategies to minimize your tax liability.

Maximize your deductions and safeguard your cash flow with these 8 essential business tax tips to consider before year-end.

1. Review Your Debtors and Write Off Bad Debts

Don’t pay tax on income you are unlikely to ever collect.  Review your outstanding accounts receivable ledger before 30 June 2026 and formally write off any bad debts that are genuinely unrecoverable.

• Action Step: Ensure the write-off is properly documented in your accounting software before midnight on 30 June.  If you happen to recover the debt down the track, you can simply declare it as income in that future financial year.

2. Review and Value Your Trading Stock

If your business holds inventory, you must conduct a physical stocktake to verify your stock on hand before the end of the financial year.

• Action Step: If any items are obsolete, damaged, expired, or entirely unsaleable, formally write them down or write them off before 30 June.  Remember, if your current selling price is lower than the original cost, you can generally value that stock at the lower selling price (excluding GST).

3. Pay Employee Superannuation Early

Superannuation is only tax-deductible when it is actually received by the employee’s super fund, not when the clearing house batch is generated.

• Action Step: If you want to claim a deduction for the June quarter superannuation in your 2026 tax return, clear the payments early.  Leaving it until the final week of June is highly risky due to bank and clearing house processing times.  Aim to pay by mid-June to be safe.

4. Optimize Director Fees and Staff Bonuses

Intending to reward your team or directors for their hard work this year?  If you commit to staff bonuses or director fees for work already performed, paying them before 30 June 2026 generally allows the business to claim an immediate tax deduction.

• Action Step: If cash flow is tight and you cannot physically pay before year-end, ensure you properly document and approve a legally binding resolution of the entitlement before 30 June.  Depending on your business structure and accounting treatment, this may still secure the deduction.

5. Consider Personal Super Contributions

Business owners and sole traders looking to lower their personal taxable income should consider topping up their concessional superannuation contributions before 30 June 2026.

• Action Step: Review your available caps.  You may also be eligible to utilize unused carry-forward concessional contribution amounts from the past five years.  Always seek professional advice before making lump-sum contributions to ensure you don’t accidentally breach the cap limits.

6. Prepay Deductible Business Expenses

Small businesses with an aggregated turnover under $50 million can access the “12-month rule” to claim an immediate deduction for prepaid expenses.

• Action Step: Look at expenses covering periods of up to 12 months that extend into the next financial year.  Consider prepaying items like rent, commercial insurance premiums, software subscriptions, professional memberships, or loan interest before 30 June 2026 to bring the deduction forward.

7. Leverage the $20,000 Instant Asset Write-Off

For small businesses with an aggregated turnover under $10 million, you can immediately deduct the full cost of eligible business assets costing less than $20,000 per asset. 

• Important Update: The Federal Budget announced that this $20,000 threshold will become a permanent fixture of the tax system from 1 July 2026. 
• Action Step: While the stability is great news for future planning, for this tax year, the asset must still be physically first used or installed ready for use by 30 June 2026.  Eligible assets include tools, computers, office furniture, and work vehicles.  Ensure the purchase makes genuine commercial sense rather than being driven purely by tax motives. 

8. Finalize Trust Distributions Before 30 June

If your business operates through a discretionary trust structure, you do not have a post-June window to sort out your paperwork.  Trustee distribution resolutions must be fully prepared and executed before 30 June 2026.

• Action Step: Failure to properly document trust distributions before midnight on 30 June can result in the trust’s default beneficiaries being taxed, or the trustee being taxed on the undistributed income at the highest marginal tax rate (45%).  This is critical if you intend to distribute to corporate beneficiaries or adult children.

Important Disclaimer:

Effective tax planning must always look at your unique business structure, specific circumstances, and cash flow requirements.  The rules vary significantly between companies, trusts, partnerships, and sole traders.  Always consult with a registered tax agent or accountant before implementing these strategies.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Most Budget commentary focuses on headlines.

But the real impact on small business is usually buried deep in the Budget papers.

After working through the 2026–27 Federal Budget papers in detail, several themes become clear:

• discretionary trusts are firmly in the Government’s sights
• the tax system is shifting away from passive investment structures
• founders and startup businesses may face unintended consequences
• compliance and real-time reporting obligations are accelerating
• and the Government appears to be pushing SMEs toward more formal corporate structures.

Some of the proposed changes are significant and could materially impact:

• family business groups
• startup founders
• property investors
• professional firms
• and businesses operating through discretionary trusts.

Below is a practical breakdown of the key measures small and medium businesses should be watching closely.

Discretionary Trust Changes

One of the most significant reforms in the Budget is the proposed 30 per cent minimum tax on discretionary trusts from 1 July 2028.

This is arguably one of the largest discretionary trust reforms in decades.  The Government’s position is that discretionary trusts facilitate income splitting and provide tax advantages unavailable to ordinary wage earners, marking a clear policy shift toward ‘tax neutrality’ between employees and business owners.

Under the proposal:

• trustees would pay a 30 per cent minimum tax on trust income before it gets to the beneficiary.
• non corporate beneficiaries would receive a non-refundable credit for tax already paid.
• corporate beneficiaries will not get the credit for tax already paid.

The practical consequence is that the traditional tax-planning advantage of distributing income to lower-rate beneficiaries becomes substantially reduced.

For example, based on what is currently proposed, a discretionary trust distributes $50,000 to person.  The tax withheld by the trust would be $15,000.  A person earning $50,000 would normally pay around $6,500 in tax.  They would get the offset against this from the $15,000 from the trust and pay no more tax.  But the extra $8,500 tax paid by the trust is not recoverable.  And if the distribution was to a corporate beneficiary, the trust would without $15,000 tax and the corporate beneficiary would not get any benefit from this.  As you can see, distributions from trusts may result in additional tax being paid (the Government has stated it expects $4.5b in extra tax).

This has potentially major implications for:

• family businesses
• professional firms
• investment structures
• family groups using bucket companies (the corporate beneficiary).

At this stage, the final interaction between:

• bucket companies
• beneficiary distributions
• franking systems
• and trust taxation

will ultimately depend on legislative drafting.

However, based on the Budget papers, the reforms appear likely to materially reduce the effectiveness of many existing discretionary trust strategies.

The Government has recognised the scale of the change by proposing restructuring rollover relief to facilitate movement into:

• companies
• fixed trusts.

This is an important signal.  But there is no money to cover the costs you would incur to do this restructuring.

This proposal represents a major philosophical shift away from discretionary trusts as the default SME and family investment structure.

FYI, the minimum tax will not apply to primary production income of farms, certain income relating to vulnerable minors, amounts to which non-resident withholding tax applies and income from assets of testamentary trusts existing at announcement.

Capital Gains Tax Changes

The headline change is the replacement of the broad 50 per cent CGT discount from 1 July 2027.  Under the proposed reforms:

• the 50 per cent discount for individuals, trusts and partnerships would be removed.
• inflation indexation of the cost base would return.
• a 30 per cent minimum tax on real capital gains would apply.

Note Superannuation funds are not impacted by this decision.  Also excluded are investors who buy new property builds.  But currently pre-CGT assets (those purchased before September 1985), will be subject to tax on any gain after 30 June 2027.  This is a massive ‘hidden’ change. If you have owned an asset since before 1985, its ‘tax-free’ status effectively ends on 30 June 2027. Any growth after that date is taxable.

Valuation issues for all Business Owners

If you sell an asset like your business after 30 June 2027, there is a two-step process to determine the taxable capital gain. 

Step 1 – calculate the gain from when you acquired the asset, to what the asset is worth on 30 June 2027.  That gain will be subject to the 50% discount.  For example, cost base is $100,000 and value at 30 June 2027 was $500,000.  The gain is $400,000 and with the 50% discount the taxable gain would be $200,000.

Step 2 – Then for the growth in asset value after 30 June 2027, the taxable gain will be determined based on the selling price, less the indexed value of the business as at 30 June 2027.  Using the same example above, let’s say the asset sold for $750,000 and the indexed cost base (using the $500,000 value as at 30 June 2027) is $600,000, the taxable gain is $150,000.

This brings the total taxable capital gain to $350,000. 

Presented this way, it appears very simple from a maths perspective.  But to ensure you get the maximum benefit, you will need to determine the value of the asset such as your business, as at 1 July 2027.

The budget papers state an asset’s value at 1 July 2027 will be determined by taxpayers as part of their tax return in the year the asset is realised.  You can either:

• seek a valuation of the asset as at 1 July 2027, which will include using quoted prices for assets such as shares; or
• use a specified apportionment formula that estimates the asset’s value on 1 July 2027, based on its growth rate over the asset’s holding period. The ATO will provide tools to estimate this value for taxpayers.

The smartest option would be for business owner to know both numbers.  The pre 1 July 2027 gain using market value and the gain using the apportionment formula.  The problem is that if you want to do this, then every business owner / founder / investor will effectively need to value their business (and any other capital assets that they own) as at 30 June 2027 / 1 July 2027. 

I am not sure what “proof” the ATO will want around these valuations and whether they will want formal independent valuations for your business.   This could be an expensive and time-consuming exercise for all business owners.

Cost Base Issues for many Business Owners

One area that appears poorly accommodated by the reforms is startup founder and new business equity.  Startup founders and new business owners often:

• take minimal salaries for years
• contribute unpaid labour and risk
• hold equity with very low-cost bases. For example, they could have put $100 in as share capital.

Under the proposed indexed system, many founders may still face large taxable gains despite years of under-compensated work and significant commercial risk.

If the business is in existence today, they can get some relief by valuing their business as at 30 June 2027.  But for founders and new business owners who create new businesses after 30 June 2027, they may suffer from the low dollar indexation of their cost base.  $100 share capital indexed even by 50% is still only $150.  As a result, all bar $50 of what could be a large sale proceeds, would be subject to tax. 

This seems unfair.  But it looks like the Treasurer has heard this and has committed also consult with stakeholders on key details, including the treatment of early‑stage and start‑up businesses given the unique features of the tech and start‑up sector. 

R&D Tax incentive

The Budget significantly expands the R&D Tax Incentive framework while simultaneously increasing integrity and compliance activity. 

Some proposed changes to the R&D Tax incentive that impact small business and startups include:

• turnover threshold for the refundable offset increased to $50.0 million (was $20m).
• offset for businesses under $50m in turnover increases from 18.5% to 23%.
• Businesses over 10 years old will no longer receive a refundable tax offset
• increasing the minimum expenditure threshold to $50,000 (was $20,000).
• expenditure on supporting activities, will no longer be eligible. This will have an adverse impact on many claims.  Business will need to be mindful of how they categorize activity and expenses.
• the ATO has been given more money to look at compliance and fraud in the R&D Tax incentive space.

 Loss Carry Backs

One of the measures the Federal Government announced to help businesses is the permanent introduction of the Loss Carry Back.  This will apply to all businesses with a turnover up to $1 billion and start from the 2027 tax year.

If you have incurred a tax loss in any tax year from the 2027 tax year onwards, and you have paid tax in the previous 2 tax years, you may receive a cash refund of tax paid in these previous 2 years, or a reduction in the debt you owe the Australian Taxation Office.  Obviously, this is up to the higher of the after-tax value of the tax loss or the tax paid in those 2 years.

For example, you pay $100,000 tax in the 2026 tax year but have a tax loss of $50,000 in the 2027 year.  You will be eligible for a refund of $12,500 (being 25% of $50,000).  If the tax loss in the 2027 year was $500,000, the most you would be refunded is the $100,000 in tax you paid.

Loss refundability to help start-ups

From 1 July 2028, start‑up companies with aggregated annual turnover of less than $10m that generate a tax loss in their first two years of operation will be able to utilise the loss to generate a refundable tax offset.

The offset will be limited to the value of fringe benefits tax and withholding tax on wages paid in respect of Australian employees in the loss year.

Instant asset Write off to stay at $20,000 for Small Business

The $20,000 instant asset write off will now be made permanent for small business (turnover less than $10m).  This applies to sole traders, partnerships, trusts, or companies.

So, a plus for small business in that you don’t need to rush out and buy all those assets in June 2026 to get the deduction this year.  But if you are already planning to buy some equipment, you might as well do it before 30 June, as you get the deduction earlier.

Expanding venture capital incentives

Venture capital investors can operate through venture capital limited partnerships (VCLPs) and early-stage venture capital limited partnerships (ESVCLPs), which provide a ‘flow through’ structure and targeted tax incentives to the investors such as tax offsets. 

But these vehicles have caps on deal size.  The Budget proposes to increase the caps on these deal sizes.  Whilst this helps those businesses who fit the investment profile typically targeted by VC funds, this is no help to the many other great businesses out there who VC’s don’t fund.

Small Business Responsible Lending Obligation Exemption Extension

The Small Business Responsible Lending Obligation (RLO) exemption allows lenders to bypass strict “responsible lending” checks for loans intended for small business purposes, simplifying access to credit for small businesses.  This was due to expire on 3 October 2026 but is extended by a further 10 years.

Expansion of the ATO’s dynamic PAYG instalment pilot

This dynamic PAYG instalment pilot allows businesses to vary their PAYG instalments, without risk of interest changes, based on more up-to-date business conditions by using an ATO-approved dynamic instalment calculation embedded in your business accounting software.  Also, business can opt in to pay their PAYG monthly from 1 July 2027. 

It remains unclear whether this will improve SME cash flow outcomes as the budget papers say this increases tax collections.

AI and Productivity

You would expect with the current poor rates of productivity growth in Australia, there would be some effort towards using AI to improve productivity.  But AI barely gets mentioned in the main Budget Papers

There appears to be no money for small businesses to adopt AI to improve their business processes.  All I can see is $70m for the AI Accelerator CRC program rounds (see below for more on this), and more use of AI by government departments to make them more efficient.

To me this appears to be one of the weaker areas in the budget.  A lot of motherhood statements in this “Productivity Package” and I am not sure we will see any meaningful improvement in productivity if we rely on the Federal Government.

Continued or Stopped Funding for small business programs

The Federal Government will continue to fund the NewAccess for Small Business Owners Program and the Small Business Debt Helpline.

As part of the budget repair process the Federal Government has now closed the Australia’s Economic Accelerator (AEA) Ignite and Innovate Programs saving $800m+.  For those who don’t know this program was designed to connect university research with business to commercialise this research.  Large adverse hit to the ability to commercialise university research. 

But on the other side the Government is continuing to fund the Cooperative Research Centres (CRC) and CRC-P programs.  This includes $70m available through upcoming rounds of the starting in 2026 and 2027 for an ‘AI Accelerator’ to accelerate the development and commercialisation of AI by Australian researchers and businesses.  Business should be on the look for this and work out how they can partner with a university to access this funding.

There is mention in the budget papers for more funding for the CSIRO, but I am hearing of some programs closing.  So not sure where this funding is going.

On top of this, there are further savings of $266.2 million over five years from 2025–26 by redirecting uncommitted grant funding in the Industry, Science and Resources portfolio.  There is no mention of what specific grant programs, but I expect part of this is the reduced funding for the Industry Growth Program.

Will wait and see what other grant program cuts were buried in the budget.

Final Thoughts

This Budget is far more structurally significant than many of the media headlines suggest.

While there are some genuinely positive measures for SMEs, including the permanent instant asset write-off, expanded loss carry-back rules and startup support measures, the broader direction is clear:

• more compliance
• more transparency
• more real-time reporting
• and reduced reliance on traditional tax-planning structures.

For many businesses, particularly those operating through discretionary trusts or holding appreciating assets, the next few years may involve significant restructuring and planning decisions.

The detail of many of these measures will ultimately depend on legislation and consultation, so this remains an evolving space.

If you are a founder, business owner, or growing SME, this is the sort of environment where having strong strategic financial advice matters more than ever.

At aRealCFO, we help businesses navigate:

• growth and scaling
• cash flow and profitability
• funding and capital raising
• business structuring
• commercial strategy

If you would like to discuss how these proposed Budget changes may impact your business or structure, feel free to reach out.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. Wayne may also be able to assist you in preparing any grant application. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The current $20,000 instant asset write-off is set to end on 30 June 2026.

If no extension is announced, it is expected to drop back to just $1,000 per asset.

That’s not a minor adjustment.
It fundamentally changes how and when businesses invest.

What the Instant Asset Write-Off Actually Allows

Under the current rules, eligible small businesses can:

• Immediately deduct assets costing less than $20,000
• Apply the threshold per asset, not in total
• Claim multiple purchases
• Access the deduction in the year the asset is installed and ready for use

That final point is critical.

It’s not about when you buy the asset.
It’s about when it is operational.

Where Businesses Get This Wrong

A common mistake is assuming that purchasing before 30 June is enough.

It isn’t.

If the asset is not installed and ready for use by 30 June 2026, the deduction may not apply under the current threshold.

This is where timing becomes more important than intention.

Why This Matters More Than Tax

The instant asset write-off is often seen as a tax benefit.

In reality, it is a cash flow timing tool.

Bringing forward a deduction means:

• Lower taxable income now
• Improved short-term cash flow
• Faster recovery of investment cost

After June 2026, that same asset may need to be depreciated over several years.

Same purchase.
Very different financial impact.

What Smart Businesses Are Doing Now

The businesses getting value from this are not rushing out to spend.

They are reviewing planned investments and asking:

• What were we already going to invest in?
• Does bringing this forward improve our position?
• Will this asset actually drive efficiency or growth?

This is not about buying for tax.

It is about aligning timing with strategy.

The Right Question to Ask

The wrong question is:

“What can I buy before 30 June?”

The better question is:

“What were we planning to invest in over the next 12–18 months, and does it make sense to act earlier?”

Final Thought

Decisions like this sit at the intersection of tax, cash flow, and strategy.

Handled well, they can improve your position.

Handled poorly, they simply accelerate spending without improving outcomes.

Need Help Modelling This Properly?

If you are considering bringing forward asset purchases, it is worth modelling the impact properly.

Not just the tax outcome, but the cash flow and business impact as a whole.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The Reserve Bank of Australia is cutting interchange fees and banning surcharges, but the real impact on business margins is often misunderstood.

The End of “Pass-Through” Card Fees

For years, many Australian businesses have treated card fees as a pass-through cost.

Customer pays by card → fee gets added → business stays whole.
Simple.

But recent changes from the Reserve Bank of Australia are about to fundamentally reset that model.

From 1 October 2026, two things happen at once:

• Interchange fees are cut significantly, with the interchange component dropping from around 0.8% → 0.3%
• Card surcharges are banned

This changes how many businesses manage pricing, margins, and profitability.

What Are Merchant Fees in Australia?

Breaking Down the Typical 1.8% Merchant Fee

Let’s start with the headline number most businesses recognise:

“I pay about 1.8% in merchant or card fees in Australia.”

That 1.8% isn’t one fee, it’s a bundle:

• ~0.8% interchange fees (set within the payments system)
• ~1.0% made up of card network fees (e.g. Visa, Mastercard) and your provider’s margin

How the RBA Interchange Fee Changes Impact Your Costs

In simple terms, your total cost does fall.

Using the example above:
1.8% → ~1.3% (if interchange savings are fully passed through)

So yes, your costs reduce by around 0.5%.

But that’s only half the story.

The Hidden Impact of the Credit Card Surcharge Ban

Why Lower Fees Don’t Always Mean Higher Profit

If you were already absorbing merchant fees:
👉 Good outcome, your costs fall and your margin improves.

But if you were passing on credit card surcharges:

• 👉 Your costs drop 0.5%
• 👉 Your revenue drops 1.8%

That’s a net negative impact on margin.

Example: How the Surcharge Ban Affects a $100 Sale

Old vs New Payment Economics

Let’s say you sell something for $100.

Old world (with surcharge):

• Customer pays: $101.80
• You receive: $100

New world (no surcharge):

You now have two choices.

Option 1: Absorb the cost

• Customer pays: $100
• You receive: ~$98.60–$98.80

Option 2: Adjust pricing

• Customer pays: ~$101–$102
• You maintain your margin

How to Reduce Merchant Fees in Australia

If you’re currently passing on merchant fees, you need to act, not drift.

1. Review Your Payment Provider

Many businesses haven’t focused on their merchant rate because:

“It was always passed on anyway.”

That mindset no longer works.

2. Reduce Your Underlying Payment Costs

Start with:

• Least-cost routing (debit over credit)
• Lower-cost providers
• Alternative payment methods like PayID and Osko

3. Rethink Your Pricing Strategy

You have two options:

• Do nothing → your margins fall
• Adjust pricing → recover some or all of the cost

But make it a conscious decision.

What Businesses Should Do Before October 2026

• Review your merchant fee structure
• Understand your payment mix (debit vs credit)
• Model the impact on margins
• Decide how you will adjust pricing

The Bottom Line on RBA Card Fee Changes

Yes, merchant fees in Australia are coming down.

But the bigger shift is this:

You’re losing the ability to pass them on.

What was once a neutral cost is now a direct margin decision.

Ignore it, and you will feel it.
Manage it, and you can come out ahead.

Next Steps

If you want to review your current merchant costs, speak to a provider like Shabaas Pay (full disclosure: a business I work with).

If you want help working through what this means for your pricing and margins, feel free to reach out.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

A chairman brought me into a business for one reason:

The CEO knew the product inside out…
But had very little cash flow management experience.

So we built a simple cloud-based cash flow forecast the whole leadership team could see and use.

And everything changed.

Now:
💰 He knew exactly when he could pay people
⚠️ He knew when pressure was coming
⏱️ He knew when to move early instead of react late

🔍 It even picked up when the bookkeeper hadn’t billed some clients

No guesswork. No surprises.

He ran the business off the model.

Even more importantly, it changed how they made decisions.

When their cash buffer approached ~$200k:
🚀 They didn’t wait
💡 They raised capital early

When projections showed it happening again:
📊 They were already preparing the next raise

That was the difference.

Cash flow forecasting wasn’t about the numbers.
It was about timing decisions before they became problems.

Most businesses didn’t fail because they ran out of cash.

They failed because they saw it too late.

If you don’t have this level of visibility, you’re guessing.

If you want help building a model like this → reach out.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Most hiring decisions don’t fail because the role was wrong.

They fail because the timing and expectations were wrong.

On paper, it often looks fine.
Revenue is growing. The team is stretched. There is enough cash in the bank.

So, the hire feels justified.

But two questions matter more than anything.

📍 Can your business actually afford to hire this employee from a cash flow perspective
📍 What does success look like for this hire

What Does It Really Cost to Hire an Employee?

It is never just salary.

A $100k employee is usually closer to $120k to $140k once you include superannuation, payroll tax, tools, systems, and the reality that productivity is lower in the early months.

Most of that cost hits before you see the return.

This is where many hiring decisions create pressure on cash flow.

Define What Success Looks Like Before You Hire

Before hiring a new employee, you need to define what success actually looks like.

Not “help the team” or “support growth”.

Clear outcomes.

📍 What is this person responsible for
📍 What do they need to deliver
📍 When should you start seeing results

That might mean generating a defined amount of revenue within six months, freeing up time to focus on sales, or removing a bottleneck that is slowing the business down.

If you cannot define success clearly, you cannot measure whether the hire is working.

When Will the New Employee Pay for Themselves?

This is the question most businesses skip.

You need to understand how long it will take for the hire to generate or support cash coming into the business.

In many cases, the timeline looks like this.

📍 Hire starts today
📍 Productive in 2 months
📍 Work invoiced in month 3
📍 Cash lands in month 4 or 5

That creates a gap of several months where the business is funding the cost before seeing any return.

This is where cash flow pressure builds.

How Hiring Impacts Your Cash Flow

Hiring a new employee affects cash flow immediately.

Costs increase from day one, while revenue or efficiency gains take time.

Before making a decision, you need to map your expected cash flow over the next 90 to 180 days.

Look at what cash is currently available, what payments are already committed, and when income is realistically expected to come in.

Then add the impact of the new hire.

If cash becomes tight at any point, not just overall, the business is exposed.

Because most businesses do not fail due to lack of profit.

They fail because they run out of cash at a specific point in time.

Final Thought

Hiring an employee is not just a growth decision.

It is a cash flow decision.

If your business can support the timing gap and you are clear on what success looks like, hiring can accelerate growth.

If not, it can create pressure very quickly.

If you are thinking about hiring and are unsure how it will impact your cash flow, this is usually where we start with clients, mapping the numbers and defining what success needs to look like before the decision is made.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Not because they don’t understand it.

Because it doesn’t feel urgent.

The Problem Isn’t Payday Super

It’s July 2026.

That’s when two systems collide:

📅 April–June super is due
💸 Super starts being paid with every payroll

You pay super twice. Almost at once.

Why This Will Catch People

Most businesses haven’t actually set that cash aside.

They’ve relied on the timing gap.

July removes it.

💨 Cash leaves faster than expected.

What To Do Now

📊 Build a real cash flow forecast
🧪 Model July as a spike, not a normal month
🏦 Start holding super in cash now

Bottom Line

This isn’t about compliance.

It’s about cash timing.

And most businesses won’t see the problem…

Until July hits.

Need Help?

If you’re not 100% clear what July looks like for your cash…

Now is the time to fix it.

I help businesses build practical cash flow forecasts that show exactly when pressure hits, and what to do about it.

💬 Want some help to map this out reach out (contact details below).

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

I had a client hit hard during the Global Financial Crisis.

Revenue dropped.
Business confidence disappeared.
Activity slowed almost overnight.

By the time I got involved:

They had over $300k in tax debt (ATO + payroll tax).

Not a strategy problem.
A cash problem.

So we did something simple.

📅 Every Friday at 10am
📊 One cash flow conversation
🔍 Focus: the next 4 weeks only

Each week we asked:
👉 Can we pay staff?
👉 Can we meet tax obligations?
👉 If not, what needs to be renegotiated now?

No guessing.
No hoping.
Just decisions.

Week by week, they:
✔️ Stabilised cash
✔️ Negotiated with the ATO
✔️ Paid down the debt
✔️ Stayed alive

Today, the business still exists.

Without that forecast and discipline?

❌ Likely liquidation
❌ Directors personally liable
❌ Business gone
❌ Personal assets at risk

Cash flow forecasting isn’t about reports.
It’s about survival decisions before it’s too late.

If you don’t have a clear view of the next 4–8 weeks, you’re flying blind.

I help businesses build simple, practical cash flow forecasts that drive decisions (not spreadsheets).

Send me a message if you want to put one in place.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052