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With Christmas coming up, it’s important to understand the ATO rules around parties and gifts so you don’t get caught with unexpected tax bills.

Here are the key things to remember:

Keep costs under $300 per person

If each benefit (party OR gift) is under $300, it may be FBT-exempt under the minor benefits rule.

Christmas Parties

• Off-site: Under $300 per head = likely FBT-free.
• On-site (during work hours): Usually FBT-free for employees.
• Costs for partners/guests may attract FBT if over $300.

Transport

• Taxi/transport to an off-site party counts toward the $300 limit.
• Taxi to an on-site party for employees is FBT-exempt.

Gifts for Employees

• Non-entertainment gifts (hampers, wine, gift cards) = tax deductible + GST credits.
• Entertainment gifts (movie, concert tickets) = not deductible and no GST credits.

Clients & Suppliers

• Christmas events for clients = not deductible (classed as entertainment).
• Gifts like wine, hampers, branded items = usually tax deductible.
• High-value tech or capital items = not deductible.

Good Record-Keeping Is a Must

Track: costs per person, gift values, event details & FBT calculations.

What It Means for Employers

Significant changes are coming to how superannuation is paid. The government’s Payday Super reform is now law and will take effect from 1st July 2026. This means employers will be required to pay their employees’ superannuation at the same time as their salary and wages.

Business owners should start preparing now to ensure a smooth transition to Payday Super. Early action will help your business stay compliant, manage cash flow effectively, and avoid unnecessary pressure as the start date approaches.

What is Payday Super

Payday Super is a change to how employers pay superannuation. From 1st July 2026, employers will be required to pay super at the same time as wages.

The ATO has also introduced a draft Practical Compliance Guideline (PCG 2025/D5) outlining its approach to compliance during the first year of Payday Super.

The ATO intends to focus its compliance efforts on employers who fail to pay the minimum SG contributions and do not take prompt action to rectify any issues. Employers who make genuine efforts to comply and resolve issues quickly are less likely to face compliance action.

How It Will Work

• Super contributions must reach the fund within seven calendar days of payday.
• Payment frequency will align with payroll cycles.

What Small Businesses Can Do Now?

There are practical steps that can be taken now to prepare for July 1st:

• Review payroll cycles: Weekly pay will require weekly super payments, and monthly pay will require monthly payments.
• Check payroll software: Confirm that systems can manage more frequent payments or identify suitable alternatives.
• Update employee super details: Ensure fund information is accurate and active.
• Plan for cash flow: More frequent super payments will place greater demand on cash flow.
• Stay informed: Monitor updates from the ATO and ICB as the reform progresses.

Supporting Small Business

This reform represents one of the most significant payroll changes in recent years, and there is limited time to prepare. Bookkeepers and BAS Agents play a key role in helping small businesses understand what is coming and plan accordingly.

The best approach is to stay informed, start planning early, and help clients prepare for change.

Protecting Digital Devices

Digital devices are central to running any small business, making cybersecurity essential. The Australian Signals Directorate’s Australian Cyber Security Centre has released three new ‘how to’ guides to help small businesses protect the devices they use most: Apple, Google, and Microsoft.

These guides give practical, step-by-step instructions for securing each platform. They show business owners and staff how to configure security settings, protect sensitive data, and reduce the risk of threats like phishing, ransomware, or account compromise. The advice goes beyond general tips and aligns with international standards as well as Australia’s own protective frameworks.

The guides are written for non-technical users, making it easier to put essential protections in place on phones, laptops, and tablets that are used for financial workflows, client communications, and cloud-based accounting systems. They also help businesses stay on top of privacy and data protection obligations.

For small businesses without dedicated IT support, these guides are a practical way to build cyber resilience. They work well alongside the ACSC’s broader Small Business Cyber Security Guide and are particularly useful when onboarding staff who use personal devices for work. Following the guidelines makes it easier to maintain consistent security across your team and reduce everyday risks.

Download the guide for your device or operating system:

• Apple [PDF 392Kb]
• Google [PDF 386Kb]
• Microsoft [PDF 394Kb]

Source: Small business hub | Cyber.gov.au

What Business Owners Need to Know

More payroll platforms now offer employee self-onboarding. Instead of details being manually keyed in by you, your bookkeeper or payroll officer, employees enter their own information directly into the system. This saves time, reduces errors, and streamlines administrative tasks.

Even with these tools, your business is still legally responsible for record-keeping and ATO compliance. If you engage a bookkeeper or BAS Agent for payroll services, they can guide you and manage payroll, but the liability always sits with you, the employer.

What This Means for You

When your team or bookkeeper uses digital onboarding, remember:

• Records must be accurate and complete. Even if the employee entered their own details. Review TFNs for apparent errors (they should be nine digits). Confirm super fund status using the Super Fund Lookup. Cross-check other key information, such as bank accounts and birthdates, against onboarding forms or ID.
• Payroll records must be kept for five years from the date of lodgment. Onboarding documents such as TFN declarations, super fund choices, and contracts must be kept for five years after an employee leaves.
• Compliance documents such as agreements, award classifications, and job descriptions must also be on file.
• If an employee skips a step or makes an error, the business can still be held liable.

A Note on Tax File Numbers:
TFN declarations must be stored securely for a minimum of five years. TFNs are classed as sensitive information, so your business must protect them from misuse or unauthorised access under both ATO rules and the Privacy (TFN) Rule 2015.

Practical Steps for Business Owners

Even if you use payroll software or rely on employees to enter their own details, the responsibility for compliance stays with the business. To keep things on track:

• Set clear onboarding processes. Make sure every new employee knows what information they need to provide, why it matters, and how it will be used.
• Check the details. Review employee information before the first pay run. Look for errors in TFNs, bank accounts, dates of birth, and super fund details.
• Keep records secure and complete. Store TFN declarations, contracts, and super fund choices safely. These must be kept for at least five years after an employee leaves.
• Confirm your payroll system does the job. The software should save documents securely and be able to produce compliant pay slips if asked.
• Keep a paper trail. Save emails, notes, and reminders related to payroll and onboarding. They can be valuable if there’s ever a dispute or audit.

ATO Requirements

The ATO does not set rules about how businesses collect new employee information, but it is very clear on what must happen after the details are collected. Records must be complete, accurate, and maintained in a format that can be produced if the ATO requests them. For employers using onboarding software, this means checking that the system can generate compliant records, hold documents for the right period, and store them securely. The responsibility lies not with the software provider, but with the business to ensure the technology supports proper record-keeping.

Why It Matters

Strong onboarding is about more than avoiding fines or audits. It sets the tone for the employment relationship. When employees see their pay and tax details handled properly, it builds trust and prevents problems later.

Digital onboarding tools can make things smoother, but they are not a replacement for good compliance practices. With the right systems and support from your bookkeeper, you can protect your business and your employees.

Find A BAS Agent You Can Trust

The Tax Practitioners Board (TPB) has been listening to feedback and have developed a new advertising campaign to promote the necessity for businesses to use the services of a registered BAS Agent.

Their ‘Find a BAS agent you can trust’ campaign raises awareness among businesses of the risks of using unregistered BAS preparers. Unregistered preparers don’t have the required qualifications to advise clients on their obligations, and if they lodge statements to the Australian Taxation Office on behalf of a business, such as yours, they are doing so illegally. Incorrect or incomplete submissions may result in penalties or legal consequences for the client.

Accurate financial reporting is vital for businesses, and this campaign links through to the online register to allow businesses to check that their BAS Agent is registered with the TPB. Because BAS can be submitted monthly, quarterly or annually, the TPB are running the campaign throughout 2025 and 2026 and will refine targeting and messaging throughout the year.

Is Your BAS Agent Registered?

To confirm if a BAS Agent is registered with the TPB, you can:

• Search the TPB Register
• Look for the registered tax practitioner symbol.

TPB Register

The TPB Register includes details of registered tax practitioners and some deregistered practitioners, including the reasons for termination of their registration. For further information about how to use the register, refer to Help with using the TPB Register.

Registered Tax Practitioner Symbol

The registered tax practitioner symbol is an easy way for consumers to see if their BAS Agent is registered with the TPB. The practitioner’s symbol may be found on a range of business materials, including websites, stationery, email signature blocks, brochures and business cards. For further information, refer to Look for the symbol.

Further information:

• Finding and using a tax practitioner
• Risks of using unregistered tax practitioners

The Cyber Wardens: Safe AI for Small Business course is both worthwhile and easy to follow. It provides a clear understanding of how artificial intelligence is already being used in business, and how cyber criminals are using it too. The course is practical, relevant, and full of useful tips that can be applied straight away.

AI is Already Part of Everyday Business

Many of us are using AI without even realising it. From email filters and fraud alerts to automatic replies, these tools are built into systems we use every day. They can help save time, reduce admin, and improve accuracy, which is a real benefit for small business owners.

Cybercriminals are Using AI Too

One of the most important takeaways was how AI is changing the way scams work. Emails are now much more convincing, fake phone calls sound real, and deepfake videos are being used to trick people. It is harder to tell what is real and what is not, so it’s more important than ever to be cautious.

Small Actions Can Make a Big Difference

The course focuses on changes that are simple but effective . Setting up multi-factor authentication, verifying requests by phone, and double-checking email addresses are all easy habits to build. One tip to take note of is having a code word to confirm anything unusual with your team.

AI Tools Can Be Helpful When Used Carefully

This is not about avoiding AI. In fact, the course shows how AI can support your business when used thoughtfully. It can help manage bookings, flag suspicious activity, and even assist with customer communication. The key is to stay in control of what information you share and where.

Everyday Habits Are Worth Reviewing

The course highlights a few everyday practices that can quietly open the door to cyber risks. Things like using public Wi-Fi for work accounts or forgetting to log out of sensitive platforms might seem harmless, but they can create vulnerabilities. It is a good reminder to be a bit more intentional with how and where you access important information. Small changes, such as using secure connections and logging out properly, can make a real difference.

Some Industries Need Extra Care

If your business handles financial or personal data, such as in bookkeeping, accounting, or payroll, the risks are even higher. The course includes advice specific to these areas, such as verifying all payment instructions by phone, using multi-factor authentication for financial systems, and keeping your software updated to close off weak points.

If Something Goes Wrong

The course also explains what to do if you are hacked or if your identity is stolen. It covers who to contact, how to secure your accounts, and where to report incidents. Knowing these steps in advance can help you stay calm and take the right action quickly.

Final Thoughts

For small business owners unsure where to start with cybersecurity or how AI fits in, this course is a strong starting point. It’s clear, practical, and highlights where the real risks are. The recommended changes are straightforward but can make a big difference. It doesn’t take long to complete and provides a solid understanding of what to look out for and how to respond.

Where to Find Support

IDCARE: An independent not-for-profit and the only service of its kind globally, offering expert support and frontline insights into scams, identity theft, and cybercrime. Visit IDCARE’s website: www.idcare.org

Australian Cyber Security Centre: The ACSC is the government’s lead agency for cybersecurity, providing threat intelligence, incident response, and technical guidance to protect Australian businesses, individuals, and critical infrastructure from cyber threats.

Report a cybercrime, incident or vulnerability: Report and recover | Cyber.gov.au

Payroll Record Keeping

The Fair Work Ombudsman (FWO) has been doing spot checks on small businesses across six cities to see if employers are keeping proper records. If you have staff, now is a good time to make sure everything is in order.

Around 50 businesses were visited in locations such as Sydney, Melbourne, Perth, Hobart, Adelaide, and Cairns. Inspectors focused on retailers and service businesses such as butchers, florists, bakeries, phone repair shops, beauty salons and car washes. These types of businesses often hire younger staff or migrant workers, who may not always be aware of their rights or feel confident in speaking up.

Inspectors checked pay slips, timesheets, and whether employees had received the correct Fair Work Information Statement and Casual Employee Information Statement. When records were missing or poorly kept, employers received fines on the spot. The penalties can range from $1,878 for an individual issue to $9,390 for a company.

The FWO indicates that missing or sloppy records are often a sign that there could be underpayments or other issues. In the last financial year, they issued 760 fines nationwide, totalling nearly $1 million.

This is not about punishing honest mistakes. It is about making sure businesses are following the law and treating their workers fairly. Keeping good records also makes your life easier when it comes to payroll, audits and sorting out any mistakes quickly.

Reference: FWO – Record-keeping blitz for businesses nationwide

Business Record Keeping Requirements

Employers must keep specific records for each employee. These include basic information such as the employee’s name, start date, employment type (full-time, part-time, or casual), and pay rate. Employers must also record what has been paid, any deductions, and details of extras, such as overtime, bonuses, or allowances. If an employee works irregular hours or overtime, start and finish times must be recorded.

Other required records include leave balances, details of any leave taken, and information on superannuation contributions, including the dates and locations of payment. Additionally, copies of any relevant agreements, such as those for leave in advance or flexible work arrangements, are also required. If employment ends, the employer must document the circumstances and date of termination.

These records must be kept confidential, but employees have the right to request access at any time. Failing to maintain proper records can result in penalties, so it’s essential that everything is accurate and well-organised.

Time and wages records must be kept for seven years. They need to be in English, legible, and readily available if requested by a Fair Work Inspector. Records can only be changed to correct genuine errors. Keeping false or misleading records is against the law and may result in further penalties. Clear and accurate record-keeping protects both the employer and the employee.

If you’re a small business owner, having a trusted bookkeeper is one of the best ways to stay on top of your financial obligations. Bookkeepers bring the right mix of accuracy, experience, and up to date knowledge to help you avoid costly mistakes. They ensure the details are accurate, allowing you to focus on running your business with confidence.

Reference: FWO – Record-keeping

The Role of the Bookkeeper

Professional Bookkeepers offer practical support to small businesses in areas such as record-keeping and compliance. They can review current systems, identify gaps, and recommend simple adjustments to ensure everything is being captured accurately. They help set up and maintain processes for timesheets, pay runs, leave tracking, and super payments, so nothing is missed. They also make sure that employees receive the correct Fair Work Information Statement and Casual Employee Information Statement and that records are stored properly and securely.

If there has been a mistake or something has fallen behind, a bookkeeper knows how to bring things up to date and correct errors without making the situation worse. They can also help business owners understand their record-keeping obligations and know what to expect if a Fair Work Inspector asks questions. Your Professional Bookkeeper will be able to assist you with any matters relating to the importance and understanding of your record-keeping obligations.

FWO Resources

The FWO offers pay slip and record-keeping templates to help employers get it right. The FWO’s Small Business Showcase also offers a range of tailored resources for small business employers. The FWO provides an online learning centre for employees and employers, including this course, which specifically covers record-keeping and pay slips. Small businesses can also audit their own compliance with their obligations with this checklist.

Employees can keep track of their hours worked through the Record My Hours app.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. A free interpreter service is available on 13 14 50. Information can also be provided to the FWO anonymously, including in 16 languages other than English.

Scrapping Deductions for GIC and SIC

From 1st July 2025, taxpayers will no longer be able to deduct the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) on their tax returns. This change, passed by Parliament on 26th March, means taxpayers will need to reconsider how they manage tax debts.

Under the new rules, the Commissioner can still remit interest charges in cases where it is fair and reasonable, taking into account the circumstances surrounding delayed tax payments or shortfalls.

This change is designed to create a more level playing field for those who already meet their obligations.

What are GIC and SIC?

• GIC (General Interest Charge):
  The GIC is imposed on unpaid tax liabilities when taxpayers fail to pay their tax on time. The GIC rate for the January-March 2025 quarter is 11.42%. The charge accrues daily on a compounding basis until the overdue amount is paid. It applies to late payments of taxes such as income tax, GST, or other tax obligations.
• SIC (Shortfall Interest Charge):
  The SIC applies to tax shortfalls due to incorrect self-assessment. It applies from the due date of the tax liability until the Commissioner issues an amended assessment. Once the assessment is amended, the GIC applies. The SIC is calculated at a lower rate than the GIC, currently 7.42% for the January-March 2025 quarter.

The key difference between the two is that GIC applies to late tax payments. In contrast, SIC applies when an assessment is amended, resulting in an increased liability due to incorrect self-assessment.

Reconsider How You Manage Tax Debt

The ATO advise that good cash flow habits can help your business stay on top of tax obligations and avoid falling into debt. They recommend the use of digital tools that suit your business to automate tasks like GST reporting and tracking your tax position. Make it a habit to set aside GST, PAYG withholding and super contributions regularly. Having a separate bank account for these can make it easier. Plan ahead by tracking what money is coming in and going out so you’re ready for upcoming expenses. Keep your business records accurate and up to date, and back them up regularly. If you’re unsure about anything, a registered tax or BAS agent can help you stay on track.

Small Business Restructuring

The Small Business Restructuring (SBR) Process provides financially distressed small businesses with a simplified and cost-effective mechanism for reorganising and recovering from financial difficulties. Simplified debt restructuring has been introduced in order to remedy some of the perceived problems with voluntary administration, particularly for small businesses or SMEs.

Small business owners can benefit from closely monitoring their financial records and key indicators to identify early signs of financial distress. Understanding these warning signs can help in addressing potential debt issues before they escalate.

A skilled bookkeeper can provide valuable insights by recognising financial red flags and, when necessary, recommending the engagement of insolvency and business recovery services. Seeking professional assistance at the right time can lead to strategic recovery plans, debt restructuring, and legal guidance, helping businesses navigate financial challenges and work toward stability.

What if a Director Receives a Director Penalty Notice? (“DPN”)

A director penalty notice, or DPN for short, is one of the preferred tools of the Australian Taxation Office (ATO) when it comes to pursuing directors. However, DPNs often come as a surprise to directors trying to maintain their business in the post-pandemic economy.

The DPN regime makes directors personally liable for a company’s tax debts for PAYG, GST, Luxury Car Tax, Wine Equalisation Tax, and superannuation guarantee charge (SGC) debts. This exposure, however, only occurs after the time period set in the DPN has passed.

If there’s one clear trend to take away from the past year, it’s the ATO’s growing willingness to issue DPNs to clients who do not comply with tax regulations. When it comes to DPNs, the risk of personal exposure largely depends on whether your client has received a non-lockdown or lockdown DPN.

If you’re unsure of the distinction between these two types, we recommend reading the in-depth article on DPNs for more details. DPNS – What You Need to Know and Avoiding Personal Liability – Hamilton Murphy for more information.

If a director receives a non-lockdown DPN, it’s important to take action quickly so they can avoid personal liability. By starting an SBR within twenty-one (21) days of receiving a DPN, a company director can avoid being held personally liable for the amounts demanded under the DPN. Once the SBR is successfully completed, the ATO must compromise on any remaining portion of the debt following the dividend paid to creditors.

If a director has received a lockdown DPN or a DPN with a lockdown and non-lockdown portion, the Director will be made personally liable for the full amount of any lockdown portion. In this instance, if any SBR or other insolvency appointment is initiated, the ATO may seek to recover either the full quantum of their debt or the balance following a dividend of less than 100 cents/dollar.

What if The Director Has a Personal Guarantee?

Directors commonly provide personal guarantees when financing assets. Financiers also typically register a security over the asset on the Personal Property Securities Register (“PPSR”). Personal guarantees are commonly used in business loans, leases, and trade agreements to provide creditors with additional security.

According to insolvency specialists Hamilton Murphy, as long as these finance agreements are managed in the ordinary course of business, financiers rarely rely on personal guarantees to meet the Company’s obligations. Issues generally arise when there are significant arrears on an account prior to the appointment of a restructuring practitioner. In such cases, the financier, as a secured creditor, may utilise their security and the personal guarantee from the director(s) to make up any shortfall arising from a compromise under an SBR.

It’s worth noting that during an SBR, there is a moratorium on creditors taking action under a personal guarantee. Once the restructuring period ends, a creditor holding a personal guarantee is free to pursue the director for the full quantum owed by the Company. In such cases, it is important to seek advice and make arrangements for payment with the creditor.

Key Takeaways

SBRs offer a great opportunity for eligible small businesses to compromise onerous legacy debts swiftly and effectively, helping your clients maintain their relationship with you and position themselves for profitable future trading.

Although an SBR cannot completely eliminate personal liability in the event of a lockdown DPN or personal guarantee, there are strategies to mitigate these risks. When prompt action and guidance from an insolvency expert are taken, your business will be afforded the best possible chance to recover its position.

Your bookkeeper is integral to the success of the Small Business Restructuring (SBR) process. They provide essential financial clarity by maintaining accurate and up-to-date records, which are crucial for assessing the business’s viability and creating a reliable restructuring plan.

ATO Debits Offset ATO Credits

Offsetting occurs when the ATO uses credit from one tax account to pay off a liability on another account, including tax debts or debts with other government agencies. This process is automatic, and credits are applied to tax debts first before being used for debts with other government agencies.

How Offsetting Works

Many business taxpayers have multiple accounts for different tax obligations. If the ATO owes money to a taxpayer, they would typically receive a refund. However, the refund may be reduced or withheld if the taxpayer has an outstanding debt. Offsetting can occur in the following situations:

• Outstanding tax debts with the ATO: For example, a BAS refund may be offset against an income tax debt.
• Previously held debts: The ATO may use credits to reduce debts previously placed on hold.
• Debts with other government agencies: For example, a BAS refund may be offset against a debt with Services Australia.

Generally, the ATO will offset credits against liabilities that are due but not yet payable. A liability is considered ‘due’ when an entity is legally required to pay it, even if the actual payment date has not yet arrived. It becomes ‘payable’ once the payment date arrives.

For Example:

A business files its BAS and owes $1,000 in GST, but the payment isn’t due until next month. The ATO considers the $1,000 due because the business is legally required to pay it, even though the payment date is in the future. If the business has a credit of $500 in another tax account, the ATO might use that credit to reduce the $1,000 debt, even though it’s not yet time to pay.

Contact the ATO Before Lodging

If offsetting will cause financial hardship, an authorised bookkeeper can request a refund on your behalf instead of allowing the credit to be offset against the liability. The ATO may also exercise discretion to reverse the offset after it has occurred if the circumstances at the time warrant it.

If you’re expecting a BAS refund, your bookkeeper can help you understand how the ATO may offset the amount against any outstanding liabilities or other debts — even those not yet payable. Speak with your bookkeeper before lodging to assess the impact on your refund and whether it’s advisable to contact the ATO.