Tips to help you this tax time
With tax time around the corner, it's time to start getting your records in order for your 2025-26 tax return.
The Australian Taxation Office (ATO) has made it as easy as possible. They have a range of information, digital tools and services to help small business owners and operators get their tax and super right. Here are some helpful tips for you to keep in mind this year.
Remember the 3 golden rules for claiming deductions
You can claim a deduction for most expenses you incur running your business, as long as they are directly related to earning your assessable income. If you're not sure about what to claim, here are the 3 golden rules:
- The expense must be for your business – not for private use.
- If the expense is a mix of business and private use, you can only claim the portion that is used for your business.
- You must have records to prove it.
For more information on business tax deductions, visit Business deductions.
Tax time toolkit for small businesses
The ATO’s Tax Time toolkit can help you during tax time and throughout the year. The toolkit has a directory of links to useful information and fact sheets including:
- claiming home-based business expenses
- claiming motor vehicle expenses
- claiming travel expenses
- claiming digital product expenses
- using business money and assets
- pausing or permanently closing your business.
For more information, visit the Tax Time toolkit.
Income deductions for home-based businesses
If you run your business from your home and have a dedicated area set aside as a ‘place of business’, you may be able to claim occupancy and running expenses.
If you don’t have an area set aside as a place of business but you do some work from home, you may still be able to claim a deduction for some of your expenses relating to the area you use.
Fixed rate method
For the 2025-26 income year, you may be able to use the fixed rate method. This is a fixed rate of 70 cents for every hour you work from home that covers specific expenses such as electricity, internet and phone.
If you use the fixed rate method, you won’t be able to claim an additional separate deduction for the expenses already covered by this method. However, you can separately claim a deduction for the decline in value of depreciating assets, such as laptops, mobile phones and office furniture.
Claiming actual expenses
If you don't use the fixed rate method, you can claim the actual expenses you incurred while working from home.
Whichever method applies to you, remember to keep complete and accurate records, for at least 5 years, so you can substantiate your claims.
You can find out everything you need to know by visiting Home-based business.
Pay as you go (PAYG) instalments
If you’re running a new business, you should consider voluntarily entering into PAYG instalments.
PAYG instalments allow you to make regular prepayments of the tax on your business income, so you shouldn’t have a large tax bill when you lodge your return.
Find out how to start paying PAYG instalments by visiting PAYG instalments.
If you don’t voluntarily enter, you may be automatically entered into PAYG instalments if you earn business and investment income over the threshold.
Review your tax position regularly so the amount you prepay is closer to your expected tax for the year.
Find out how to vary your instalments by visiting Varying PAYG instalments.
Take advantage of small business concessions
It’s worth finding out whether you’re eligible for small business concessions, such as simplified depreciation rules, the small business income tax offset and immediate deductions for pre-paid expenses. They can help reduce your tax bill and some may also save you time.
For more information on available concessions, check out Small business concessions.
Instance asset write-off
Additionally, using the instant asset write-off, eligible small businesses can deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2025 to 30 June 2026.
The $20,000 limit will apply on a per asset basis, so small businesses can instantly deduct the full cost of multiple assets, as long as the cost of each asset is less than the limit.
If you use the simplified depreciation rules and the cost of the asset is the same as or more than the relevant instant asset write-off limit, the asset must be placed into the small business pool.
For more information, check out Instant asset write-off.
Work out your motor vehicle expenses the right way
As a business owner, you can claim a tax deduction for expenses for motor vehicles – cars and certain other vehicles – used in running your business. You can claim expenses like fuel, insurance premiums, registration, depreciation, as well as servicing and repairs.
Your business structure and the type of vehicle you use affect the way you calculate motor vehicle expenses.
The car limit remains $69,674 for the 2025-26 income year. The car limit is the cost you can use to work out the depreciation of passenger vehicles that are designed to carry a load of less than one tonne and fewer than 9 passengers, excluding motorcycles or similar vehicles.
The maximum value you can use for calculating your depreciation claim is the car limit in the year in which you first used or leased the car.
Find out how by visiting Motor vehicle expenses.
Stay on top of your employer obligations
If you employ staff, make sure you’re prepared for your end of financial year (EOFY) tax and super obligations. As Tuesday 30 June 2026 approaches, stay up to date with your employer reporting obligations.
Fringe benefits tax (FBT)
The FBT year runs from 1 April to 31 March. Did you provide staff benefits on top of their salary and wages during the FBT year? The due date to lodge your FBT return and pay any FBT owed is Thursday 21 May 2026. However, if you already have a tax professional that lodges electronically on your behalf, you have until Thursday 25 June 2025.
Payday Super
From 1 July you must pay employees their super guarantee on payday, at the same time as their salary and wages. How you calculate super guarantee amounts is also changing. From 1 July, super guarantee amounts will be calculated as 12% of qualifying earnings (QE). QE includes ordinary time earnings, salary sacrifice contributions and other amounts that are currently included in an employee's salary or wages for super guarantee. Don’t wait until 1 July to prepare for Payday Super.
Single touch payroll (STP) reporting
Remember to make STP finalisation declarations by Tuesday 14 July 2026 for all employees you’ve paid during the financial year. Accurate reporting means your employees have the right information to lodge their income tax returns. For more information, visit End-of-year finalisation through STP.
It’s important to keep good records and have good payroll governance for your tax and super reporting. If you make a mistake, take the steps to correct it as soon as possible. You can find out more by visiting Record keeping for business.
Record keeping and digital services
A good record keeping system will help you manage your tax and super obligations all year round. This will make it easier to report and lodge your tax return on time.
You can use the ATO’s record keeping evaluation tool to help you make improvements and make tax time even easier. Use the tool by visiting Record keeping evaluation tool.
The right digital tools can also help you perform daily business activities easily and securely. Make sure you’ve set up myID and Relationship Authorisation Manager (RAM) to access the ATO’s online services, including Online services for business which allows you to manage your business reporting and transactions in one place.
For more information, visit Businesses and organisations online services.
Essentials to strengthen your small business
Are you looking to improve your financial, record keeping and business knowledge to support your business' long-term health?
The ATO have recently launched a free online learning platform to help small businesses understand how to handle their tax and super basics.
Essentials to strengthen your small business has courses specifically designed for small business needs. Course information is targeted, up-to-date and interactive.
You can pick and choose a specific learning pathway relevant to your needs, where you’re at in the business lifecycle and the industry you’re in. You can also complete each course at your own pace by saving your progress and coming back another time.
For more information, check out Essentials to strengthen your small business.
Download the ATO app and use Digital ID
The ATO app is a simple and easy way you can access and manage your tax and super on the go. The ATO app is free to download and use. As an individual or sole trader, you can quickly access your personal tax and super information in one place.
Find out more on the ATO app.
There are also several helpful features and tools you can use. You can use the myDeductions tool in the ATO app to scan receipts, track expenses and log work-related trips to stay on top of your vehicle.
When you are ready to prepare your tax return, your records from the myDeductions tool can be sent to your tax agent via email or can be used to prepare your return yourself.
To take advantage of all the app features and personalise your experience, create a myID account and link it to the ATO. When setting up, secure your sign in and use a Digital ID set to the highest level you can achieve.
Ask for help if you need it
Remember, it's important to lodge and pay in full and on time. If you're worried you won't be able to lodge and pay by the due date, contact your registered tax professional or visit the ATO website to find out what support options are available to you.
Find more information with Supporting your small business.