Understanding the tax changes introduced in the 2025 Federal Budget is essential for small businesses across Australia. With updated thresholds, ongoing support measures, and a continued focus on compliance, staying informed can help businesses make smarter financial decisions.
In this article, we’ll break down the most important tax updates for small businesses in 2025 and explain what they mean for you.
1. Instant Asset Write-Off Extended Again
One of the headline announcements is the extension of the $20,000 instant asset write-off for eligible small businesses.
What does this mean?
If your business has an annual turnover under $10 million, you can continue to immediately deduct the full cost of assets costing less than $20,000. These assets must be installed and ready for use between 1 July 2023 and 30 June 2025.
Examples of eligible assets:
-
Office furniture
-
Computers and tech equipment
-
Work vehicles
-
Tools and machinery
Why it matters:
Immediate deductions help reduce your taxable income in the same financial year, improving your cash flow.
2. Personal Income Tax Cuts Could Influence Your Business
Although personal income tax cuts primarily affect individuals, many small businesses – especially sole traders – will also feel the impact.
From 1 July 2024, tax bracket changes include:
-
A new 16% rate for income between $18,201 and $45,000 (down from 19%)
-
30% for income between $45,001 and $135,000
-
37% for income between $135,001 and $190,000
-
45% for income over $190,000
What does this mean for your business?
-
If you’re a sole trader or partnership, your personal tax rate applies to business income.
-
The changes could increase take-home pay and allow more money to be reinvested into the business.
3. Superannuation Guarantee Changes Still in Motion
The superannuation guarantee rate increased to 11% on 1 July 2023, and will continue to rise until it reaches 12% in 2025.
What employers need to know:
-
You must pay super on time (at least quarterly).
-
Contributions are tax-deductible if paid by the deadline.
-
Late payments may result in penalties and loss of the deduction.
💡 Tip: Set up automated payments or reminders to avoid missing super due dates.
4. More ATO Focus on Small Business Compliance
The ATO continues to increase its focus on small business tax compliance in 2025.
Key focus areas include:
-
Unreported income (especially cash payments)
-
Incorrect GST claims
-
Superannuation non-compliance
-
Work-related deductions
The ATO is also using more data matching tools and AI-driven systems to spot mistakes.
💡 Tip: Keep detailed records, use accounting software, and talk to a qualified accountant to stay compliant.
5. Support for Energy-Efficient Upgrades and R&D
While not a tax cut, the government is offering increased support for small businesses investing in energy-efficient upgrades or involved in research and development.
-
Grants and incentives may apply for solar installations, battery storage, and energy-efficient appliances.
-
The R&D Tax Incentive remains available, offering refunds or offsets to businesses conducting eligible R&D activities.
💡 Tip: These schemes can reduce long-term costs and improve business sustainability.
6. Tax Advice Is More Valuable Than Ever
With so many changes to navigate, professional tax advice can help you:
-
Maximise available deductions
-
Reduce risk of non-compliance
-
Prepare ahead for future obligations
Whether it’s reviewing your business structure, budgeting for super, or planning asset purchases, a trusted Penrith accountant can keep you on track.
Conclusion
Tax changes in 2025 offer both opportunities and risks for small businesses. By understanding the latest updates—like the extended instant asset write-off, personal tax adjustments, and super changes—you can plan ahead and avoid nasty surprises at tax time.
Want to make sure your business is prepared? Carmody Accounting is here to help local businesses stay compliant, efficient, and profitable.
