Australian Tax Planning 2026: Essential Tips for Businesses and Individuals
Let’s be honest: tax planning usually sits somewhere between “sort out the junk drawer” and “finally read the insurance policy” on the list of things people want to do. But getting on top of your tax before the rush can make a real difference to your cash flow, your savings, and your stress levels.
As we move through the 2025–26 financial year, there are a few important ATO rules, thresholds and opportunities worth knowing about. Whether you run a small business, work for yourself, or earn a higher income and want to be smarter with your money, a bit of planning now can save headaches later.
Key takeaways:
- The concessional super contribution cap stays at $30,000 for the 2025–26 financial year, which can be a smart way to reduce taxable income.
- Small businesses may be able to use the $20,000 instant asset write-off for eligible assets.
- Higher income earners with income plus concessional contributions over $250,000 need to watch for Division 293 tax and may benefit from carry-forward super rules.
- Your business structure—Sole Trader, Company, or Trust—can have a big impact on tax, flexibility and asset protection.
Here’s a practical guide to help you make better tax decisions for the 2026 financial year.
Maximise Your Superannuation Contributions
Superannuation can feel like something you only think about “later”, but it can also be one of the most useful tax planning tools you have right now. For the 2025–26 financial year, the concessional contribution cap remains $30,000.
That includes employer Super Guarantee contributions, salary sacrifice, and personal contributions you claim as a tax deduction. In simple terms, money going into super this way is usually taxed at 15% inside the fund, which is often much lower than your personal tax rate. So if you’re earning well, topping up your super can be a tidy way to build retirement savings while trimming your tax bill.
Think of it like this: instead of sending more of your income straight to tax, you may be able to redirect part of it into your future.
Carry-Forward Concessional Contributions
If your total super balance was under $500,000 on 30 June of the previous financial year, you may be able to use the carry-forward rules. That means you can use any unused concessional cap amounts from the past five financial years.
This can be especially helpful in a year when your income jumps. For example, if you sold an investment, had a particularly strong business year, or picked up a large bonus, a catch-up super contribution could help soften the tax hit. It’s one of those strategies that can look boring on paper but make a noticeable difference in real life.
Small Business Instant Asset Write-Off
If you’re a small business owner, you already know the balancing act: keep cash in the business, invest in what you need, and try not to get caught out at tax time. That’s where the instant asset write-off can help.
For the 2025–26 income year, the threshold is $20,000. Small businesses with an aggregated turnover of less than $10 million may be able to immediately deduct the business portion of eligible depreciating assets costing under $20,000, as long as they are first used or installed ready for use by 30 June.
So if you’ve been putting off buying a new laptop, tools, office furniture or other equipment the business genuinely needs, timing matters.
How to optimise this:
- Plan purchases: If you already need new equipment, buying before the end of the financial year may bring the deduction forward and reduce this year’s tax bill.
- Asset pooling: Assets costing $20,000 or more can usually go into a small business pool and be depreciated over time—15% in the first year and 30% in later years.
A simple example: if your old office computer keeps freezing during every Zoom call, replacing it before 30 June may not just save your sanity—it could also improve your tax position.
Strategies for High-Income Earners
If you’re on a higher income, tax planning becomes even more important because the stakes are higher. Once you move into the top tax brackets, small decisions can have a bigger impact, especially when super and investment income are involved.
One issue that often catches people by surprise is Division 293 tax.
Navigating Division 293 Tax
Division 293 tax applies when your income plus concessional super contributions goes over $250,000. If that happens, you may need to pay an extra 15% tax on some or all of your concessional contributions.
That can sound painful, but there’s a bit of perspective needed here. Even with the extra tax, super can still be more tax-effective than earning the same money outside super at the top marginal rate.
If you’re hovering around that $250,000 mark, it may be worth planning ahead. Depending on your situation, that could include bringing forward deductible expenses, reviewing investment strategies, or deferring income where it’s commercially appropriate. The aim isn’t to do anything clever for the sake of it—it’s to avoid nasty surprises and make sure your money is working harder for you.
Business Structure Optimisation: Sole Trader vs. Company vs. Trust
Your business structure isn’t just a box you ticked when you started out. It affects how much tax you pay, how you report income, and how well your personal assets are protected.
A lot of people start with the simplest setup, which makes sense. But as income grows, that same structure can start costing more than it saves.
Sole Trader
Being a sole trader is straightforward and usually cheaper to set up and run. That’s why many people begin here. But all business profit is treated as your personal income, which means it’s taxed at individual marginal rates.
That can be fine in the early days. But if your business has grown quickly, you may find yourself paying a much higher rate of tax than expected. There’s also no real legal separation between you and the business, which means personal assets can be more exposed.
In short: easy to start, but not always the best long-term fit.
Company Structure
A company is a separate legal entity, which can offer both tax and legal advantages. For base rate entities, the company tax rate is 25%, which is often lower than the top personal tax rates.
That can give business owners more room to retain profits in the business and reinvest in growth. Then, when profits are paid out as dividends, franking credits can help reduce double taxation.
A simple way to think about it: a company can give you more structure, more separation, and potentially more control over when and how profits are accessed.
Family Trust (Discretionary Trust)
A discretionary family trust can be a useful option for tax planning and asset protection. The trustee can decide how trust income is distributed among beneficiaries, such as family members, which may help reduce the overall tax paid across the family group.
For example, if one family member is on a lower tax rate, distributing some income to them may be more tax-effective than having all income taxed in one person’s name. That said, trusts come with more rules and admin, and if income is not distributed properly, it can be taxed at the top marginal rate.
Trusts can be powerful, but they need to be handled carefully.
The takeaway for structures: Many business owners eventually use a mix of structures. For example, a company may run the business, while a discretionary trust owns the shares in that company. That setup can help with both asset protection and flexibility around income distribution. It’s not right for everyone, but it shows why reviewing your structure as your business grows is so important.
Next Steps for 2026
Good tax planning is rarely about last-minute scrambling in June. It’s usually about making a few smart decisions early enough that you still have options.
That might mean reviewing your super contributions, deciding whether to buy business equipment before 30 June, or asking whether your current business structure still suits where you are now. Even one or two changes can make a meaningful difference.
If there’s one takeaway from all of this, it’s simple: don’t wait until tax time to think about tax.
And as always, speak with a registered tax agent or financial adviser before acting on any strategy. The best tax plan is one that fits your real circumstances, not just a checklist from the internet.