End of Financial Year Planning for Australian Small Business

EOFY as a Planning Event, Not Just a Compliance Event

Most Australian small businesses treat June 30 as a deadline — a point at which compliance obligations need to be met before handing everything to the accountant. The businesses that grow strategically treat it differently: as the most important planning milestone of the year.

The weeks before and after June 30 are when you have the most clarity on your financial year's performance, the most opportunity to make decisions that affect your tax position, and the most natural moment to set up the new year properly.

Here's how to approach it in three phases: before June 30, at June 30, and after July 1.

Before June 30: Tax Planning Actions

Prepay Deductible Expenses

If you're a cash-basis taxpayer (most small businesses are), prepaying deductible business expenses before June 30 brings the deduction into the current financial year. This is legitimate tax planning, not avoidance. Expenses that make sense to prepay:

• Business insurance (annual renewal, prepaid for the next 12 months)
• Software subscriptions (annual plan rather than monthly)
• Business-related training and professional development
• Trade association memberships and industry body fees
• Rent (if paying in advance is practical)

Write Off Bad Debts

If you have invoices that are genuinely unrecoverable — the client has gone into liquidation, moved overseas, or simply refuses to pay after repeated attempts — write them off before June 30. The deduction applies in the year the debt is written off, not the year the invoice was issued.

In Xero, raise a credit note against the invoice, code it to a "Bad Debts Written Off" expense account, and apply it to the invoice. Your BAS agent will check whether a GST adjustment is also available.

Purchase and Install Equipment

For the instant asset write-off to apply in 2024–25, the asset must be purchased and installed ready for use by June 30. "On order" doesn't count. Check with your accountant on the current threshold and any temporary increased limits.

Top Up Superannuation

The concessional contributions cap for 2025–26 is $30,000. If your employer SGC contributions for the year are below this cap, you may be able to make additional personal concessional contributions before June 30 to top up. These are taxed at 15% in the fund — significantly lower than the marginal rate for most business owners earning $120k+.

The contribution must be received by the super fund before June 30 (not just initiated). Allow at least 3–5 business days for processing. Talk to your accountant before making extra super contributions.

At June 30: Closing Off the Year

The final week of June requires specific actions to ensure your year-end position is accurate:

• Issue all invoices for work completed by June 30. Revenue is recognised when earned (for accrual-basis businesses) or when invoiced (for cash-basis). If work was done in June, invoice it in June.
• Check bill dates. Ensure bills for June expenses are dated June, not July. An incorrectly dated supplier bill can shift a deduction into the next financial year.
• Reconcile all bank accounts. Every account should be fully reconciled as at June 30. This is the foundation for your balance sheet and your accountant's year-end work.
• Finalise payroll for the year in Xero. STP finalisation must be submitted by 14 July. Run the last pay of the year, then finalise via Payroll → Single Touch Payroll in Xero.

Common EOFY Mistakes

• Forgetting STP finalisation: Your employees cannot lodge their personal tax returns until you've finalised their income statement in Xero. Delays cause frustration and create ATO pressure. Deadline is 14 July.
• Not writing off bad debts before June 30: If you wait until July, the deduction moves to the next year. Review your aged receivables in May and make a call on any debts older than 90 days.
• Timing invoices to shift income: Delaying June invoices to July to defer income is legitimate if the work genuinely isn't complete. But backdating July invoices to June — or vice versa — is not. Get the dates right.
• Missing the super contribution deadline: Super contributions must clear the fund by June 30. Anything processed after this date falls in the new financial year regardless of when you initiated the payment.

After July 1: Setting Up the New Year

The first week of July is when you set up the new financial year properly:

• Update Xero payroll with new super rate: From 1 July 2025, the SGC rate increases to 12%. Update this in Xero Payroll settings before processing any pays in the new year.
• Update award rates in payroll: The annual Fair Work wage review takes effect 1 July. Check the applicable Modern Award for each employee classification and update minimum rates in Xero Payroll.
• Review and update your pricing: CPI adjustment? Award rate changes that increase your labour costs? July is the natural time to pass these increases on to clients with a new price schedule.
• Set your annual budget in Xero: New year, new budget. Enter your monthly targets in Xero Budget Manager and start tracking budget vs actuals from July.
• Review your structure: Your accountant may have recommendations from the year-end review — restructuring to a company, changing trust distributions, updating shareholder agreements. July is the time to act.