Our September 2025 newsletter highlights some key tax changes and developments that may affect you or your business.
What’s new?
HELP and other student debts
Do you have a study or training debt, such as a Higher Education Loan Program (HELP) debt (this used to be called a HECS debt)? The good news is that your debt has been reduced by 20% and the minimum compulsory repayment threshold has increased to $67,000 for the 2025–26 income year. In addition, the repayment rates have been simplified.
The 20% debt reduction applies to all study and training loans that existed on 1 June 2025. The ATO will apply this reduction to your loan debt on 1 June 2025; the 2025 indexation is then adjusted to the lower loan amount.
The ATO will notify you when it has applied the reduction to your study loan account.
Because of the gap from 1 June 2025 to when the reduction is applied, some of you may have paid off some, or all, of your loans. If you have a credit after the 20% reduction, you may get a refund if you don’t have outstanding tax or other government debts.
Refunds will be sent to the bank account details the ATO has for you (this could be your tax adviser’s trust account). Check to see if your financial institution account details the ATO has for you need to be updated.
The repayment thresholds and rates for the 2025–26 income year are set out in the table below.
The repayment rate is based on what is called ‘HELP repayment income’. This is effectively the sum of your taxable income, exempt foreign employment income, total reportable fringe benefit amounts, reportable super contributions and total net investment losses.
Note that the repayment thresholds and rates also apply to VET Student Loan (VSL), Student Financial Supplement Scheme (SFSS), Student Start-up Loan (SSL), ABSTUDY Student Start-up Loan (ABSTUDY SSL) and Trade Support Loan (TSL) debts.
The repayment rate is based on what is called ‘HELP repayment income’. This is effectively the sum of your taxable income, exempt foreign employment income, total reportable fringe benefit amounts, reportable super contributions and total net investment losses.
| HELP repayment income 2025-26 | Repayment rate |
| Less than $67,000 | Nil |
| $67,001-$125,000 | 15c for each $1 over $67,000 |
| $125,001-$179,285 | $8,700 plus 17c for each $1 over $125,000 |
| $179,286+ | 10% of total repayment income |
Instant asset write-off
Are you a sole trader? The instant asset write-off (IAWO) allows a small business (aggregated annual turnover of less than $10 million) to claim an immediate deduction for the cost of eligible depreciating assets that cost less than the applicable threshold. The IAWO threshold was $20,000 for 2023–24 and 2024–25, and has reverted to $1,000 from 1 July 2025. The Government has proposed to temporarily increase the threshold to $20,000 for 2025–26 but this measure is not yet law.
The $1,000 threshold applies where a depreciating asset is first used, or installed ready for use, on or after 1 July 2025 (even if acquired before that date).
The $1,000 threshold also applies to the ‘second element’ costs incurred on or after 1 July 2025 (including in respect of an asset that was first used, or installed ready for use, before 1 July 2025). ‘Second element’ costs are essentially costs incurred after the asset is acquired that bring the asset to its present condition (e.g. the cost of post-acquisition modifications) and location (e.g. transport costs).
Non-commercial loss rules
If you are a sole trader or in a partnership and want to utilise a tax loss, first check if the business activity meets at least one of the commerciality tests under the non-commercial loss rules. (Those rules do not apply to losses made by primary producers and professional artists whose income from other sources is less than $40,000.)
If you meet at least one of the commerciality tests, then you can offset the loss against other assessable income (such as salary or investment income) in the same income year.
If you do not meet the commerciality tests, you can carry the loss forward to future income years. For example, you may be able to offset it when you next make a profit.
Non-commercial losses made by an individual with adjusted taxable income exceeding $250,000 are quarantined.
Personal services income
If you operate your business through a company or a trust, income earned by the company or trust from the provision of your personal services (personal services income (PSI)) will be attributed to you unless:
- The company or trust is carrying on a personal services business (PSB); or
- The PSI was promptly paid to you as salary or wages.
The company or trust will be conducting a PSB if at least one of a number of tests are satisfied. These are the results test (the most important test), the unrelated clients test, the employment test and the business premises test.
If 80% or more of your PSI (with certain exceptions) is income from one client (or the client and their associate(s)) and the results test is not met, the company or trust will need to obtain a PSB determination from the ATO.
The company or trust cannot deduct amounts that relate to gaining or producing your PSI, unless you could have deducted the amount as an individual or the company or trust received the PSI in the course of conducting a PSB.
Even if you do not use a company or trust to derive your PSI, there are limitations on the deductions that you may claim against your PSI. For example, you may not be able to deduct certain home office expenses or occupancy expenses such as mortgage interest or rent.
Company tax rate
The standard company tax rate is 30%.
The tax rate of 25% for the 2025–26 income year applies to companies that are ‘base rate entities’. A company is a base rate entity if:
- It has an aggregated annual turnover of less than $50 million; and
- No more than 80% of the company’s assessable income is ‘base rate entity passive income’ (such as dividends, rent, interest, royalties and net capital gains).
The 25% rate has applied since the 2021–22 income year.
A company that has an aggregated annual turnover of $50 million or more, or more than 80% of the company’s assessable income is ‘base rate entity passive income’, will be taxed at the standard tax rate of 30%.
Small business tax offset
If you are a sole trader, an individual who is a partner in a business partnership or an individual who is a beneficiary of a trust that carries on a business, you may qualify for the small business tax offset if the business’ aggregated annual turnover is less than $5 million (this lower threshold applies instead of the general small business turnover threshold of $10 million). The offset is not available to an individual acting as a trustee.
The offset for the 2024–25 and 2025–26 income years is equal to 16% of the income tax payable on the taxable income that qualifies as the individual’s net small business income. The amount of the offset is capped at $1,000.
Tax time again!
Car expenses
In order to claim a deduction for car expenses:
- You must own or lease the car;
- The expenses must be for work-related trips;
- You must have spent the money yourself and were not reimbursed; and
- You must have the required records.
Vehicles with a carrying capacity of one tonne or more, or 9 or more passengers (such as utes and panel vans) are not included in the definition of a car so these must be claimed separately as travel expenses.
You can claim trips directly between multiple workplaces or to perform your work duties, but you cannot claim trips between your home and place of work, except in limited circumstances.
Home office
If you operate your business from a home office, you can deduct the expenses of running that office. A home office is a room in your home that is used exclusively (or almost exclusively) for business activities.
Expenses you can claim a deduction for include:
- Occupancy expenses — such as rent, mortgage interest, water rates, land taxes and house insurance premiums. Occupancy expenses are usually calculated by apportioning the expenses between the home office and the rest of the property on a floor area basis;
- Running expenses — these are the increased costs from using your home for your business, including electricity or gas charges for heating, cooling and lighting, cleaning costs and the decline in value and the cost of repairs of deprecating assets such as furniture, furnishings and equipment; and
- Work-related phone and internet expenses, including the decline in value of the handset. An apportionment will be required if the phone or computer is not used exclusively for work.
Other working from home expenses
If you work from home but do not have a home office as such, you can still claim deductions for what the ATO call ‘running expenses’.
To make it easier, the ATO allows a rate of 70 cents for each hour worked from home (the fixed rate method). Running expenses for these purposes are energy expenses, internet expenses, mobile and home phone usage expenses and stationery and computer consumables expenses (separate deductions need to be claimed for any other running expenses and depreciation on office equipment or furniture).
Of course, you can still claim based on your actual running expenses if it produces a larger deduction. But remember that those expenses will need to be apportioned between work and private use.
With the fixed rate method, you need to keep a record of the actual number of hours you worked from home for the whole financial year between 1 July and 30 June, and at least one record for each of the additional running expenses you incurred that the rate includes. You must also keep records for other running expenses you are claiming as a separate deduction that the rate doesn’t include.
From the ATO
Paying superannuation contributions
Your business needs to pay and report super electronically to ensure it meets SuperStream requirements.
Superannuation Guarantee (SG) payments must be made to and received by complying superannuation funds or retirement savings accounts (RSAs) by the quarterly due dates to avoid the SG charge. The SG due dates are 28 days after the end of each quarter (see the following table).
Contributions are considered as ‘paid’ only on the date they are received by the superannuation fund (not when they are paid by the employer). This means your business may need to allow extra time for the payments to be received, which is especially relevant if using a commercial clearing house.
Quarterly due dates for superannuation guarantee payments
| Quarter | Period | Payment due date |
| 1 | 1 July – 30 September | 28 October |
| 2 | 1 October – 31 December | 28 January |
| 3 | 1 January – 31 March | 28 April |
| 4 | 1 April – 30 June | 28 July |
When a due date falls on a weekend or public holiday, the payment can be made on the next working day.
Your business can choose to make payments more regularly than quarterly (for example, fortnightly or monthly). This is as long as your business’ total SG obligation for the quarter is received by your employees’ superannuation funds by the due date.
Member personal superannuation contributions
If your business makes after-tax superannuation contributions on behalf of employees, the payments are referred to as personal superannuation contributions. Make sure these are paid promptly, in accordance with the employees’ terms of employment and any legal requirement (for example, industrial award conditions).
Members’ after-tax personal superannuation contributions do not count towards your business’ SG obligations.
Other contractual requirements
Meeting the SG obligations does not ensure your business is complying with other contractual or award requirements.
Some superannuation funds, awards and contracts require superannuation to be paid more regularly (for example, monthly). When your business registers with a superannuation fund with this requirement, you are agreeing to make contributions to that superannuation fund on that basis, whether monthly or otherwise.
SuperStream payment options
SuperStream is the data standard your business must use to report and pay employee SG contributions to superannuation funds.
Under SuperStream, superannuation contributions for your employees must be paid electronically (electronic funds transfer or BPAY®). The associated data must also be sent electronically.
The data is in a standard format so it can be transmitted consistently across the superannuation system — between employers, funds, service providers and the ATO. It is linked to the payment by a unique payment reference number (PRN).
This means your business can make all contributions in a single transaction, even if they are going to multiple superannuation funds.
To meet the SuperStream requirements, your business needs to pay superannuation and send employee information electronically.
Payroll system
If your business uses a payroll system, check with the software provider that it is SuperStream-compliant. The software may need to be updated.
Some payroll systems cover data and payments and some are data only. This means payments have to be made to each fund separately. Either way, the payment must be electronic (either electronic funds transfer or BPAY®).
Single Touch Payroll
The introduction of Single Touch Payroll (STP) means that the ATO receives payroll information (tax and superannuation) on a payroll-event basis (weekly, fortnightly, monthly, other) through STP-enabled software.
Once an employer is STP-enabled, the range of employer benefits includes:
- The availability of some employer-related ATO forms (such as the TFN declaration and superannuation standard choice form) via ATO online services in myGov; and
- The availability of employee payroll information (tax and superannuation paid on their behalf) to employees via ATO online services in myGov.
Reporting payroll information using STP-enabled software is compulsory.
Your superannuation fund’s online system
Large superannuation funds have online payment services your business can use. Check with the superannuation fund for details.
Superannuation clearing house
A clearing house pays superannuation to employees’ superannuation funds. Your business sends a single electronic payment to the clearing house together with the contribution data for all employees. The clearing house does the rest.
If you have 19 or fewer employees, or a turnover of less than $10 million a year, you can use the ATO’s free Small Business Superannuation Clearing House. However, this service is closing soon (see below).
You can also choose from several commercial options or the superannuation fund may have a clearing house you can use. Talk to your superannuation fund to see what they offer.
Remember, even if making superannuation contributions is outsourced (in whole or in part), your business is still responsible for ensuring employees’ superannuation contributions are paid correctly.
Payday Super
The ‘Payday Super’ reforms were first announced on 2 May 2023, with significant changes proposed to superannuation payment arrangements. The key change will require employers to pay SG contributions in alignment with their pay cycles (that is, weekly, fortnightly or monthly), rather than quarterly, with effect from 1 July 2026.
Legislation to implement the reforms has not been introduced (draft legislation has been released).
The ATO’s Small Business Superannuation Clearing House is closing
As part of the Payday Super reforms, the Small Business Superannuation Clearing House (SBSCH) will close on 1 July 2026.
To support small businesses to transition to alternative services prior to this time, new users will be unable to register to use the service from 1 October 2025.
Existing users are encouraged to take steps now to transition to alternative options. These include reviewing existing software and payroll packages, which may already include superannuation functions, or looking at options offered by superannuation funds, commercial clearing houses, or other payroll software or providers.
Published 30 September, 2025