1 July 2026: The Legal and Commercial Changes Every Australian Business Should Be Across

For many business owners, 1 July is simply the start of another financial year. Payroll rolls over, accountants get busy and everyone starts talking about tax returns.

From our perspective, it is much more than that.

Every year, a range of legislative, regulatory and commercial changes take effect on 1 July. Some are highly publicised. Others receive very little attention until businesses find themselves dealing with an avoidable problem months later.

Whilst not every change will affect every business, there are several reforms commencing this financial year that almost every employer, professional services firm and growing SME should understand.

1. Payday Super Changes the Way Businesses Manage Cash Flow

This is likely to be the most significant operational change for many employers.

Historically, employers have generally paid superannuation quarterly. From 1 July 2026, superannuation contributions will instead need to be paid alongside each payroll cycle, with contributions required to reach an employee’s superannuation fund within a short, fixed period after payday.

This is far more than a payroll setting.

Businesses should be reviewing:

• payroll software and integrations
• cash flow forecasting
• payroll procedures
• finance processes
• working capital requirements

Businesses that have historically relied on holding superannuation until the quarterly due date will need to rethink their cash flow. For many SMEs, this will be one of the most significant changes to working capital management in years.

It is also important to distinguish between the amount of super and the timing of super. The Superannuation Guarantee rate has now reached 12%, completing its scheduled increases. The change this year is not how much employers contribute, but when those contributions must be made.

2. Minimum Wage and Award Increases

Every employer should review their payroll before processing the first July pay run.

The increase to the National Minimum Wage and Modern Award rates means businesses should ensure:

• employees remain correctly classified
• payroll software has been updated
• annualised salaries still satisfy award obligations
• employment agreements remain consistent with current award requirements

One of the more common payroll issues we see is not deliberate underpayment. It is businesses relying on payroll systems that have simply not been updated after an annual wage increase.

That risk has become considerably more serious. Deliberate wage theft is now a criminal offence, making payroll compliance something that deserves regular attention rather than an annual review.

3. Personal Income Tax Cuts Affect Your First Pay Run

From 1 July 2026, the lowest marginal tax rate reduces, with a further reduction already legislated for the following financial year.

For employers, the practical issue is relatively straightforward.

PAYG withholding tables change.

Businesses should ensure their payroll software has been updated so employees have the correct amount of tax withheld from their very first pay in the new financial year. Whilst employees will ultimately reconcile their tax position through their tax return, incorrect withholding often creates unnecessary confusion and additional administration.

4. The Instant Asset Write-Off Remains Available

The instant asset write-off continues to provide valuable opportunities for eligible small businesses investing in equipment, technology, vehicles and other qualifying business assets.

The opportunity is there, but businesses should not assume every purchase qualifies.

The applicable threshold, eligibility requirements and the date an asset must be installed and ready for use remain critical considerations and should always be discussed with your accountant before committing to significant expenditure.

Commercial decisions are often influenced by tax concessions. Understanding those concessions before making the purchase generally leads to better decisions than trying to structure them afterwards.

5. Anti-Money Laundering Laws Continue to Expand

Australia’s anti-money laundering regime continues its expansion into additional industries.

Legal practices, accounting firms, real estate businesses and other designated sectors should be aware that new compliance obligations are either commencing or being progressively introduced.

Depending on the services being provided, businesses may need to implement:

• customer identification procedures
• risk assessments
• internal AML compliance programs
• ongoing monitoring
• staff training

For many professional service businesses, this is not simply another compliance obligation. It represents a significant operational project requiring new systems, policies and staff education.

Waiting until enforcement activity begins is unlikely to be the most efficient approach.

6. Privacy Reform Continues to Raise Expectations

Privacy reform continues to gather momentum and affects almost every business.

If your business collects customer information, employee records or client data, these reforms are relevant.

The first tranche of Privacy Act reforms has already commenced, including a statutory cause of action for serious invasions of privacy together with stronger regulatory powers and increased penalties. Further reforms remain under consideration.

Businesses should take the opportunity to review how personal information is collected, stored, used, disclosed and ultimately destroyed. Privacy policies should reflect what actually occurs inside the business rather than simply existing because someone downloaded a template several years ago.

Looking Ahead

Not every important reform begins on 1 July.

Several significant changes are approaching, and businesses would be well served by preparing now rather than waiting until the commencement date.

Merchant Card Surcharges

Businesses that currently pass merchant processing costs onto customers should keep a close eye on proposed reforms that are expected to prohibit surcharges for certain card transactions.

Even before the reforms commence, businesses should understand what impact those changes may have on pricing and margins.

Restraints of Trade and Non-Compete Clauses

The Federal Government has announced its intention to significantly limit the use of non-compete clauses for employees below the high-income threshold.

Businesses that rely on restraints to protect goodwill, confidential information and client relationships should begin reviewing their employment agreements now. Waiting until the legislation is enacted may leave insufficient time to properly restructure contractual protections.

Subscription and Auto-Renewal Contracts

Businesses offering memberships, subscription services or automatically renewing contracts should also be watching developments closely.

The Federal Government continues to progress reforms designed to eliminate so-called subscription traps through stronger disclosure obligations and simpler cancellation processes.

Businesses built around recurring revenue should review their customer agreements now rather than waiting for the reforms to become mandatory.

Additional Tax on Large Superannuation Balances

The proposed additional tax on earnings attributable to very large superannuation balances continues to attract considerable debate.

Whilst the final form of the legislation remains uncertain, business owners with significant balances, particularly within self-managed superannuation funds, should continue discussing the proposal with their advisers as part of their broader retirement and succession planning.

Also Worth Noting

A handful of additional changes deserve attention.

The right to disconnect now extends to small business employers, requiring businesses to think more carefully about after-hours communication and employee expectations.

In addition, the ATO’s general interest charge and shortfall interest charge are no longer tax deductible. For businesses carrying tax debt, this increases the real cost of delaying payment and reinforces the importance of proactive cash flow management.

The Bigger Picture

Each of these changes is manageable on its own.

Taken together, however, they continue a broader trend. Australian businesses are expected to have stronger systems, better payroll processes, more sophisticated compliance frameworks and greater transparency in how they deal with employees and customers.

Businesses that prepare early generally experience these reforms as little more than administrative updates.

Businesses that leave compliance until an employee, customer or regulator identifies a problem often discover that fixing the issue is significantly more expensive than preparing for it.

If you are unsure whether any of these changes affect your business, now is the time to find out. A conversation before 1 July is almost always cheaper than one after something has gone wrong.