2025 EOFY: What You Need to Know

As we approach the new financial year, a range of regulatory changes are set to impact Australian small businesses. From tax deductibility rules to super contributions and PAYG cycles, proactive planning is more important than ever. Here's what you need to know to stay ahead in 2025–26.

🚫 No More Tax Deductions for ATO Interest Charges

From 1 July 2025, businesses will no longer be able to claim tax deductions for:

• General Interest Charge (GIC)

• Shortfall Interest Charge (SIC)

This change will effectively increase the real cost of unpaid tax, as these interest charges will become non-deductible expenses.

The ATO has returned to firm enforcement post-COVID, with fewer concessions for late or unpaid tax.

✅ What You Can Do Instead

We recommend businesses consider alternative finance options, such as:

• Business loans

• Invoice financing

• Equipment refinancing

These options retain their tax deductibility and often offer lower interest rates and longer repayment terms than ATO payment plans.

📉 What Are GIC and SIC?

• GIC is charged daily on overdue tax debts, compounding over time.

• SIC applies to tax shortfalls discovered through amended assessments.

💡 Note: GIC and SIC amounts incurred before 1 July 2025 will remain deductible.

📈 Superannuation Guarantee Rising to 12%

From 1 July 2025, the Superannuation Guarantee (SG) rate will increase from 11.5% to 12%, further raising payroll costs.

Important:

• This applies to all salary and wages paid on or after 1 July 2025, even if some of the pay period falls before that date.

• Ensure payments reach employees' super funds on time, especially if using a clearing house, as payments are only "made" when received by the fund.

🔁 PAYG Withholding Changes

You may have been notified by the ATO in April of a change to your PAYG withholding cycle based on your annual withholding amount:

Annual Withholding New Requirement$25k – $1MMonthly payment and reporting$1M+Electronic payment within 6–8 days of payroll

If your withholding cycle is changing, update your payroll systems before 1 July to stay compliant. You may request to stay on your current cycle if your forecasted 2025–26 withholding is below the relevant threshold.

💡 Energy Relief for Small Businesses

There’s some good news: The federal government will roll out $150 electricity rebates for around one million small businesses from 1 July.

Eligibility depends on being classified as a "small customer" by your state or territory based on electricity usage. Most eligible businesses will receive the rebate automatically—no action required.

📌 Final Thoughts

From rising super contributions to the loss of tax deductibility on ATO interest, these changes could significantly impact your cash flow and financial planning. Now is the time to:

• Review your finance facilities

• Assess working capital needs

• Speak to your accountant or lending specialist

At Rho Finance, we help businesses structure proactive, forward-thinking lending strategies—avoiding last-minute cashflow scrambles and costly missteps. Reach out if you'd like support in planning your finance for the year ahead.

www.rhofinance.com.au

www.rhohomeloans.com.au