New financial year checklist for commercial finance brokers: Planning for FY2026-27 client conversations
As business clients enter FY2026–27, a cluster of regulatory changes, compliance deadlines and cash flow pressures are converging at once. This guide summarises the five issues most likely to generate working capital conversations with clients in July 2026 — and the key facts you need to have those conversations well.
- Payday Super begins 1 July 2026, requiring super contributions within 7 business days of each payday instead of quarterly.
- July presents a dual-payment risk — the final quarterly SG payment and first Payday Super payments may overlap.
- The $20,000 instant asset write-off is expected to become permanent from 1 July 2026, but is not yet law.
- Fuel excise relief tapers from 1 July and ends entirely from 1 August — plan client cost forecasts accordingly.
- Late payments are at a six-year high, and ATO enforcement is intensifying — working capital pressure is compounding for many SMEs.
Australian businesses are beginning FY2026–27 under a sustained three-way squeeze on cash flow. Interest rates remain elevated, increasing borrowing costs. Operating expenses continue to rise, while late payments are at a six-year high according to CreditorWatch’s Business Risk Index. Weaker consumer demand is limiting businesses’ ability to pass on costs.
Layered over that are several regulatory and structural changes taking effect from 1 July 2026 — including the introduction of Payday Super — that will increase pressure on working capital across a broad range of business types and industries.
For brokers, the new financial year is a natural entry point for conversations about funding structure, cash flow resilience and working capital capacity. The issues below are likely to be relevant to many of your business clients, regardless of sector.
Payday Super commenced on 1 July 2026, fundamentally changing how employers manage superannuation guarantee (SG) obligations. Under the new rules, SG contributions must be received by employees’ super funds within 7 business days of each payday — replacing the previous quarterly payment cycle.
The SG rate remains 12%, and the legislation applies to all eligible employees including certain contractors paid mainly for their labour. The Small Business Superannuation Clearing House (SBSCH) closed to new users from 1 October 2025 and permanently closed on 30 June 2026; affected businesses need an alternative SuperStream solution.
The cash flow implications are significant. Businesses that have historically used the gap between quarterly SG payment dates as an informal cash flow buffer will lose that buffer entirely. For businesses with weekly or fortnightly pay cycles, super now leaves the business as frequently as wages. July 2026 also presents a dual-payment risk: the final quarterly SG payment for the April–June 2026 quarter is due by 28 July, and the first Payday Super payments begin immediately on 1 July. Both may fall in the same window.
The ATO has introduced a risk-rated compliance framework for FY2026–27 (PCG 2026/1), classifying employers as low, medium or high risk. Employers making genuine attempts to comply but experiencing occasional minor errors are expected to be treated as low risk. Deliberate non-compliance or failure to make contributions per payday will attract firmer action. Late or missed payments trigger the redesigned Super Guarantee Charge (SGC), which is assessed by the ATO (not self-assessed), and can include an administrative uplift of up to 60%.
Key considerations for client conversations
Cash flow modelling: Have clients reviewed how more frequent super payments will affect their working capital position? The impact will be most acute for businesses with weekly or fortnightly payroll and tight margins.
July double-up risk: The final April–June quarterly SG payment (due 28 July) and the first Payday Super payments (from 1 July) may fall in the same period. Clients should understand how this is managed in their payroll system.
Payroll system readiness: STP Phase 2 reporting is required; clients need payroll software that correctly maps ‘qualifying earnings’ (the new SG calculation base) and processes contributions via SuperStream.
Working capital gaps: Businesses with long customer payment cycles may find it harder to fund more frequent super obligations. Debtor finance can help unlock cash tied up in unpaid invoices.
The 2026–27 Federal Budget, announced 12 May 2026, includes a measure to make the $20,000 instant asset write-off (IAWO) a permanent feature of the tax system from 1 July 2026. The extension of the IAWO for FY2025–26 is already law. The permanent measure has been introduced to Parliament as the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 but is not yet legislated.
Under the measure as announced, small businesses with aggregated annual turnover of less than $10 million can immediately deduct the full cost of eligible depreciating assets costing less than $20,000, provided the asset is first used or installed ready for use in the relevant income year. The $20,000 threshold applies on a per-asset basis. Assets that exceed the threshold continue to be depreciated through the small business simplified depreciation pool.
For brokers, the permanence of the measure — once legislated — removes the annual uncertainty that has historically complicated asset finance conversations. Clients no longer need to rush purchases ahead of a potential write-off expiry, and investment decisions can be made based on genuine business need and timing rather than tax deadlines.
Key considerations for client conversations
Investment timing: The annual ‘race to 30 June’ driven by write-off uncertainty is removed once the measure is legislated. This creates more natural, needs-based conversations around asset investment.
Working capital and asset finance: Clients planning eligible asset purchases may benefit from trade finance or other working capital solutions to fund the investment without drawing down operating cash.
Eligibility check: Clients need to confirm their aggregated annual turnover is below $10 million and that assets meet ATO eligibility requirements. Mixed-use assets are deductible only to the extent of business use.
Legislative status: The permanent write-off has been announced but is not yet law. Advise clients to confirm the measure has passed before making purchasing decisions based solely on the permanent status.
*Note: The 2025–26 extension is law, but the measure to make the $20,000 threshold permanent from 1 July 2027 has been announced in the 2026–27 Federal Budget.
The temporary fuel excise relief announced at the end of March 2026 — which reduced the excise rate from 52.6 cents per litre to 20.6 cents per litre — has not ended cleanly. Prime Minister Albanese announced an extension for July 2026, but at a reduced rate. From 1 July, the saving is approximately 16 cents per litre (roughly half the relief provided since April). From 1 August 2026, the full indexed excise rate is expected to return.
The heavy vehicle road user charge, which was reduced to zero from 1 April, has also been extended at a reduced rate of 16 cents per litre through to 2 August 2026.
The graduated taper means businesses should plan for a two-step increase in fuel-related costs: a partial increase from 1 July, then the full rate from 1 August. Sectors most exposed include transport and logistics, construction, agriculture and field services. However, higher fuel costs can also flow through supply chains, affecting supplier costs and margins more broadly.
Businesses that claim fuel tax credits (FTCs) should note that FTC rates change based on the date fuel is acquired, not the date it is used. Updated ATO rate tables apply for fuel acquired from 1 July and again from 1 August.
Key considerations for client conversations
Operating cost forecasting: Fuel-dependent clients should update their FY2026–27 operating cost forecasts to reflect the stepped increases in July and August. Two changes — not one — affect the full-year budget.
Fuel tax credits: Businesses eligible for FTCs (heavy vehicles, off-road use) should update their rates using ATO tables for the relevant acquisition dates. FTC rates changed from 1 April, will change again from 1 July, and again from 1 August.
Margin and contract review: Clients with customer or supplier contracts should review whether fuel cost increases can be passed on, particularly in transport, logistics and manufacturing.
Cash flow management: If higher operating costs create short-term funding gaps, working capital solutions may help bridge the difference while businesses adjust pricing and purchasing strategies.
B2B payment arrears are at their highest level since January 202, according to CreditorWatch’s latest Business Risk Index, increasing cash flow pressure across Australian businesses. The squeeze on the cash conversion cycle is most acute in sectors such as hospitality, construction, transport and manufacturing.
The CreditorWatch report notes that more invoices are moving beyond 60 days overdue, and describes the trend as reflecting structural cash flow weakness rather than a cyclical slowdown.
Late payments create a compounding problem at EOFY and into the new financial year. A business may owe tax, super or other obligations based on revenue recognised before 30 June — even if the corresponding invoices remain unpaid. This means businesses can face obligations they must fund with cash that is still sitting in a customer’s account.
With Payday Super adding more frequent cash outflows from 1 July, the timing mismatch becomes more acute for businesses with long payment cycles.
Key considerations for client conversations
Working capital structure: Businesses carrying significant receivables while managing tax, super and supplier obligations may have a structural funding gap. Debtor finance may help unlock working capital tied up in unpaid invoices.
Debtor quality and concentration: Late payment trends make debtor quality more relevant to lending decisions. Clients should understand their largest exposures and payment history.
Cash flow forecasting: Help clients distinguish between revenue recognised and cash actually received. The gap between the two is often where funding pressure sits.
Receivables management: Review credit terms, deposit requirements and overdue follow-up processes. Tighter terms reduce working capital requirements.
The ATO has been systematically increasing enforcement activity on outstanding tax debt since the post-pandemic pause ended. CreditorWatch data shows tax debt defaults are at elevated levels, with several of the largest monthly inflows since the post-COVID enforcement ramp-up recorded in recent months. Sole traders account for 54% of businesses with ATO tax debt defaults greater than $100,000.
The broader debt picture is significant: CreditorWatch data from late 2024 showed that approximately one-third of businesses with ATO tax debt defaults exceeding $100,000 that were more than 90 days overdue had either become insolvent or voluntarily closed. An additional compliance dimension applies from 1 July 2025: ATO interest charges (the general interest charge and shortfall interest charge) are no longer tax deductible, making outstanding tax debt more expensive to carry than in prior years.
The ATO’s enforcement tools include business tax debt disclosures to credit reporting bureaus, garnishee orders, and Director Penalty Notices. A business with disclosed tax debt may find its credit position and ability to access external finance affected. For clients with existing debt, the interaction between ATO enforcement and their working capital arrangements is a relevant planning consideration.
Key considerations for client conversations
Debt visibility: Clients with undisclosed ATO debt may have a credit profile that doesn’t fully reflect their financial obligations. Checking the ATO debt status is relevant before structuring a finance solution.
Cost of carrying tax debt: ATO interest charges are no longer deductible from 1 July 2025. Clients carrying tax debt are effectively paying a higher net cost than they may have previously assumed.
Payment plan and engagement: The ATO’s compliance approach distinguishes between businesses that engage proactively and those that don’t. Early engagement and payment plans reduce the risk of escalated enforcement.
Working capital and tax obligations: Businesses relying on unpaid tax to fund working capital are creating a compounding debt problem. External working capital finance may help clients meet tax obligations without jeopardising business operations.
Payday Super, late payments, fuel costs and ATO enforcement don’t sit in isolation — they converge on the same pressure point: working capital.
A business managing more frequent super payments, waiting 60+ days to be paid by customers, absorbing higher fuel costs, and carrying an ATO debt is experiencing a compounding drain on operating liquidity, even if revenue is healthy.
For commercial finance brokers, the new financial year is an opportunity to review how clients are structured to manage that pressure.
The businesses most likely to need a working capital conversation are those with significant receivables, irregular cash flow, upcoming compliance obligations, or a history of using available cash to cover short-term obligations rather than managing against a funding facility.
Cash flow is now the central issue for Australian businesses.
If you're preparing clients for the new financial year Octet works alongside brokers to structure working capital solutions across trade, debtor and supply chain finance that unlock funds tied up in unpaid invoices, manage supplier payments and meet upcoming obligations without putting unnecessary pressure on day-to-day cash flow.
With a streamlined application and approval process, brokers can access funds faster for their clients when it matters most. Octet’s proprietary platform also helps businesses unlock working capital across their cash flow cycle, enabling them to buy, sell and get paid more efficiently.
Talk to your dedicated Octet working capital specialist today about how our funding solutions can help your clients navigate the start of FY2026-27 with a strong cash flow position.
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Disclaimer: The above article content and comments are our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.