The last 90 days of the financial year are when the difference between an organised business and a reactive one shows up in the assessment. Most of the levers worth pulling cannot be activated in July — they have to land before 30 June.
This article covers the six pre-EOFY decisions that move the needle for Australian SMEs, the actions that don't (despite their popularity), and the timing framework we use with clients to make sure every relevant item lands inside the window.
The big six pre-EOFY decisions
1. Instant asset write-off (A$20,000) — verify eligibility, time the install
The A$20,000 instant asset write-off is in effect for the 2025–26 income year for businesses with aggregated annual turnover under A$10M. From 1 July 2026 the Federal Budget 2026–27 has confirmed it as a permanent feature with no sunset — meaning the EOFY scramble for asset purchases becomes less critical from FY 2026–27 onwards. But the rules in 2025–26 still apply with one critical timing trap.
The asset must be installed and ready for use by 30 June 2026. Ordering an asset on 25 June and having it delivered 5 July means you miss the window — the deduction falls into 2026–27. For high-ticket items (machinery, vehicles, system upgrades), the order date is irrelevant; only the install/ready-for-use date matters.
Our instant asset write-off eligibility calculator checks the three thresholds (cost, turnover, dates) and shows the deduction. For ineligible assets, it shows the small-business pool fallback (15% in year 1, 30% diminishing thereafter).
2. Prepayments — up to 12 months for SBE taxpayers
Small Business Entities (aggregated turnover under A$10M) can deduct up to 12 months of prepaid expenses in the year of payment, provided the prepayment is for a period not exceeding 12 months and ending in the following income year.
Useful prepayment categories:
- Rent — pay the next 12 months of office or warehouse rent before 30 June; deduct it all in 2025–26.
- Insurance premiums — annual policies prepaid by 30 June; full deduction.
- Professional subscriptions — accounting software, association memberships, professional indemnity policies.
- Interest on business loans — prepay up to 12 months of interest where the loan terms allow.
Prepayments only make sense if you can fund them without compromising operating cash flow, and only if the deduction this year is more valuable than next year. For a business expecting a higher tax bracket in 2026–27 (e.g., because of growth), deferring the deduction may be worth more than accelerating it.
3. Super contributions — must be received by the fund by 30 June
Concessional contributions are deductible in the year the fund receives them, not the year you pay them. For 2025–26 the concessional cap is A$30,000 (lifted from A$27,500 for 2024–25).
- Allow 5–7 business days for clearing. Contributions initiated on 26 June through a clearing house may not land in the fund before 30 June.
- Watch the cap. Contributions above A$30,000 are added to your assessable income for the year and you pay tax at marginal rates on the excess (with a 15% offset for the contribution tax already paid by the fund).
- Carry-forward unused cap. If your total super balance was under A$500K at 30 June 2025, you can carry forward unused concessional cap from the previous five years. A real planning lever, but only relevant if your 30 June 2025 balance was below threshold.
4. Trust distribution minutes — must be signed by 30 June
Discretionary trusts that fail to make a valid distribution resolution by 30 June 2026 face undistributed income taxed at 47% in the trustee's hands. The deadline is hard. The ATO has been signalling tighter scrutiny on backdated and verbal resolutions — signed and dated minutes are now the only safe approach.
Practical points:
- Resolutions must identify beneficiaries by name or class (the latter only if the trust deed allows).
- Distributions of streamed components (franked dividends, capital gains) need to be specifically identified in the resolution to flow with their tax character.
- A “default beneficiary” clause in the deed catches anything not distributed; that beneficiary becomes liable for the tax even if they received nothing in cash.
- Section 100A risks: distributions to adult-child beneficiaries who never see the cash (“reimbursement agreements”) attract penalties under Section 100A and the ATO's 2022 ruling. Distribute to who will actually receive — not who is most tax-efficient on paper.
5. Division 7A loan minimums — and the new 8.37% benchmark
If you have a complying Division 7A loan agreement (private-company loan to a shareholder or associate), the minimum yearly repayment for 2025–26 must be paid before 30 June 2026. The 2025–26 benchmark interest rate is 8.37% — down from 8.77% in 2024–25.
Three rules:
- Pay the minimum. Underpaying makes the shortfall a deemed unfranked dividend in the borrower's hands.
- Interest on the loan. Must be calculated at or above 8.37% for 2025–26. Charging lower means the loan itself can be deemed.
- Document everything. A loan needs a written, signed agreement before lodgement of the company return; otherwise the entire loan balance is deemed a dividend.
6. Dividend timing — pre vs post 30 June
Declaring a dividend before vs after 30 June changes both the franking credit year and the recipient's tax liability:
- Pre-30 June declaration. Dividend (and any attached franking credits) sits in the recipient's 2025–26 return. Use when the recipient's marginal rate is lower in 2025–26 than expected in 2026–27.
- Post-30 June declaration. Pushes the dividend into 2026–27. Use when the recipient expects a lower marginal rate next year, or when capital gains in 2025–26 are already pushing them into the top bracket.
- Franking account balance. Check the company's franking account before declaring — over-franking can trigger franking deficit tax.
The actions that don't move the needle
Spending money to “get a deduction” is not a strategy. The 27c–47c saved per dollar still leaves 53c–73c out the door. We see this most often with:
- Last-minute capital purchases the business does not actually need. The deduction is real; the depreciation flowing through is real; the cash gone forever is also real.
- Super top-ups that breach the concessional cap. The cap exists for a reason. Excess concessional contributions get added back to your assessable income and you pay tax at marginal rates — undoing the deduction.
- Stockpiling consumables beyond reasonable business need. The ATO scrutinises bulk year-end purchases of items that won't be used for a year.
- Pre-paying expenses that don't pass the 12-month rule. Three-year insurance policies aren't fully deductible upfront.
- Donations to charities that aren't DGRs. Only deductible gift recipient (DGR) status makes a donation deductible. Many community causes don't qualify.
Our pre-EOFY rhythm with clients
On the Growth and Scale plans, pre-EOFY conversations run quarterly. The May review is the deeper one. By the time June arrives, the decisions have already been made and the actions are scheduled — not scrambled.
The rough timeline we work to:
- March/April — first projection of estimated 2025–26 tax liability. Identify whether the business is in a higher or lower bracket than the prior year.
- May — detailed planning session. Decide on prepayments, super top-ups, asset purchases, distribution intentions and dividend timing.
- Early June — execute. Asset orders placed with installation dates locked. Super contributions initiated through clearing house with sufficient buffer. Loan repayments scheduled.
- Mid June — distribution resolutions drafted, reviewed with the client, signed before 30 June.
- Late June — confirmation that every action has landed before close of business 30 June.
Pre-EOFY conversations on Growth and Scale plans run quarterly, with a deeper review in May. By the time June arrives, the decisions have already been made and the actions are scheduled — not scrambled.
What to do this week if you haven't planned yet
- Pull a projected P&L for the full year. If 2025–26 profit is materially higher than 2024–25, the tax bill will be too — start planning now.
- Check the instant asset write-off calculator against any planned asset purchases. Confirm the install date is before 30 June.
- Check super contribution status against the A$30,000 cap. If you have carry-forward room from prior years, this is the cheapest deduction available.
- Draft trust distribution resolutions now, sign before 30 June. Don't leave for the last week.
- If you have a Division 7A loan, calculate the minimum repayment at 8.37% and schedule the payment before 30 June.
The 90-day pre-EOFY window is where good tax planning lives. If you're reading this on 20 June, the conversation is still possible — just tighter than it needed to be.
References: ATO — Division 7A benchmark interest rate (8.37% for 2025–26), Section 100A trust reimbursement agreements, Concessional contributions cap, Deductions for prepaid expenses, $20,000 instant asset write-off. Australian Government Budget 2026–27 announcements on the permanent A$20K instant asset write-off from 1 July 2026. Tax laws change frequently — confirm specific treatments with a registered BAS Agent before relying on them for a 30 June decision.
This information is general in nature and does not constitute personal financial or tax advice. Please contact us to discuss your individual circumstances. Tax laws are subject to change; information on this page reflects legislation in effect as of May 2026.