Practice Update - June 2026

Australian Federal Budget 2026–2027 

The 2026–27 Federal Budget introduces a broad range of proposed tax, superannuation and business reforms that may significantly reshape Australia’s investment and operating landscape over the coming years. 

Key measures include proposed changes to capital gains tax, negative gearing, discretionary trust taxation, expanded business and R&D incentives, and the implementation of the OECD Pillar Two framework. Together, these reforms signal a substantial shift in the Government’s long-term approach to taxation and economic policy. 

For businesses, investors and advisers, understanding the practical implications early will be critical to planning and managing future tax outcomes. 

At Lynden Group, we are closely monitoring these developments and assessing how the proposed measures may impact individuals, SMEs, investors, and cross-border groups. 

Read our latest article for a detailed breakdown of the key Federal Budget announcements and what they could mean for you and your business here. 

Supporting choice in superannuation 

A Bill containing amendments related to the choice of fund process when onboarding employees has completed passage through Parliament. New legislation that took effect from 27 March 2026 aims to simplify the superannuation fund choice process during employee onboarding. The changes allow employers and their authorised agents greater flexibility to request an employee's stapled super fund details from the ATO and provide that information to employees when they commence employment, helping them make informed super fund choices. 

A stapled super fund is an employee's existing superannuation fund that follows them from job to job unless they choose a different fund. 

Employers should consider reviewing their onboarding and payroll processes to ensure they can efficiently obtain and provide stapled fund information as part of the employee's commencement process. The changes apply to superannuation contributions made on or after 27 March 2026. 

Key superannuation and ETP rates and thresholds for 2026-27 

The ATO has released several key superannuation rates and thresholds that will apply from 1 July 2026. Employers should review payroll systems and superannuation processes to ensure they are updated for the new financial year. 

Measure	2026-27 Rate / Threshold
Super Guarantee (SG) Rate	12%
Maximum Superannuation Contributions Base	$270,830 per year
Maximum Government Co-contribution	$500
Co-contribution Lower Income Threshold	$49,293
Co-contribution Higher Income Threshold	$64,293
Genuine Redundancy and Early Retirement Scheme Payment Caps	Increased for 2026–27
Eligible Termination Payment (ETP) Cap	$270,000

With Payday Super also commencing from 1 July 2026, employers should ensure payroll systems, superannuation calculations and employee onboarding processes are updated to reflect the latest requirements and thresholds. 

It’s the final countdown to Payday Super! 

With Payday Super set to commence on 1 July 2026, employers should take steps now to ensure their payroll and superannuation processes are ready. Under the new rules, super contributions will generally need to be paid within 7 business days of each payday, replacing the current quarterly payment cycle. Employers should review their payroll systems, verify employee records, and plan for the cash flow impact of more frequent super payments. Early preparation will help minimise errors, avoid penalties, and support a smooth transition to new requirements. 

Landcare operations 

Primary producers, businesses using rural land for a taxable purpose (other than mining or quarrying), and eligible irrigation water providers may be entitled to an immediate tax deduction for certain capital expenditure on landcare operations.  

Eligible activities include eradicating animal pests, controlling invasive plant growth, preventing or combating land degradation, constructing drainage works to manage salinity, and installing qualifying fencing, levees or related structural improvements. Where land is used partly for non-taxable purposes, such as a private residence, the deduction may be reduced accordingly.  

Businesses undertaking landcare activities should review their eligibility and maintain appropriate records to support any claims. 

Business deductions 

Businesses may be able to claim a tax deduction for expenses incurred in earning assessable income, including day-to-day operating costs, purchases of goods and services, and certain capital expenses such as depreciating assets. 

To be deductible, an expense must be incurred for a business purpose, appropriately apportioned where there is a private use component, and supported by adequate records. 

Businesses generally cannot claim deductions for private expenses, traffic fines, entertainment expenses (subject to limited exceptions), or the GST component of expenses where a GST credit is available. 

An important distinction to keep in mind is the difference between operating expenses and capital expenditure. Operating expenses are typically deductible in full in the year they are incurred, whereas capital expenditure is generally claimed over time through depreciation or other capital allowance provisions. Understanding the distinction between deductible operating expenses and capital expenditure remains important when determining the timing and availability of deductions. 

Case Note: Poor Record-Keeping Costs Taxpayer GST Credits - A Reminder for All Businesses 

In ZBDD and Commissioner of Taxation (Taxation) [2026], ARTA 553, the Administrative Review Tribunal (ART) has partially allowed a taxpayer’s appeal concerning input tax credits, but denied claims for the majority of credits claimed as the burden of proof was not met. 

The taxpayer was in the business of vocational education and training, and provided accredited online courses. Dispute in the relevant periods arose as to the availability of input tax credits for 15 quarters ended 30 June 2016 to 31 December 2019 inclusive. The impact of cyber events had resulted in a loss of some material to support the claims.   

In respect of certain invoices, the ART found that, on the balance of probabilities, they comprised taxable supplies, had a creditable purpose given the GST-free nature of the taxpayer’s supplies, and the burden of proof was satisfied by the taxpayer. Subject to additional checks by the Commissioner, input tax credits for those invoices were allowable. However, no input tax credits were ultimately allowed for expenses related to professional educator contractors, which formed the bulk of the taxpayer’s claimed input tax credits, as the taxpayer had not met its burden of proof in respect of those claims. 

Businesses should ensure GST records are complete, backed up, and retained for the required period. 

Contact Lynden Group if you would like assistance reviewing your tax obligations, exemptions, or property-related compliance requirements. 

Email: info@lyndengroup.com