Deductions for rental properties that double as holiday homes

The ATO has updated its guidance on rental property income and expenses from 1 July 2026, including for properties that are also used as holiday homes.

Where a property is a holiday home, it must be used (or held for use) mainly to produce rental income before the owner can claim any expenses relating to its ownership and use.

If this requirement is not met, expenses that are entirely non-deductible may include:

•  interest expenses;
• council and water rates;
• body corporate fees; and
• repairs and maintenance.

Where the property is used mainly to produce rental income but there is some minor private use (e.g., a week or a few weekends in the off season when there are no bookings), ownership and use expenses must still be apportioned accurately to reflect the periods of private use.

ATO alert: $21 billion in lost super

The ATO is urging individuals to check whether they have lost or unclaimed super, with more than $21 billion waiting to be reunited with its owners.

Super can become lost when an account is inactive and the fund cannot contact the member, often following a change of job, address or phone number.

In some cases, the balance may be transferred to the ATO to hold until it can be reunited with the individual.

The ATO reports that last year, more than $1.1 billion was returned through consolidations and direct payments to eligible individuals.

Editor: You can check for lost or unclaimed super in various ways, including through ATO online services. Alternatively, please contact us for assistance.

ASIC launches new digital hub for small business directors

ASIC has launched the Small Business Director Essentials hub, a new digital resource bringing together practical guidance, learning modules and tools in one place.

“The new Small Business Director Essentials hub provides directors with a single place to access clear, practical, and targeted resources to help them understand and meet their obligations with ASIC as a director,” ASIC Commissioner Kate O’Rourke said.

The hub includes guidance tailored to key stages of the director journey, including a roadmap to help directors navigate their obligations, from planning and setting up a company through to operating, restructuring or closing the business.

Directors can also access practical guidance for important situations, such as responding to financial difficulty, as well as free online learning modules that can be completed at any time.

ATO motor vehicle registries data-matching program

The ATO is acquiring motor vehicle registries data from state and territory authorities from the 2026 to the 2030 income years.

The information will be matched against ATO records to identify taxpayers who are not meeting their registration, lodgment, reporting, or payment obligations across a number of taxes (including GST, FBT, fuel tax credits and income tax).

The data will also be used to support ATO compliance activities through modelling, risk profiling and case selection.

The data collected may include identification details for purchasers, sellers and other relevant parties, together with transaction dates and types, sale prices, market values, vehicle garage addresses, intended use, vehicle specifications and registration details.

The ATO expects to collect data relating to approximately 2.5 million individuals each financial year.

Tips for meeting the Payday Super timeframe

Under Payday Super, contributions must be received by an employee’s super fund within seven business days after payday.
To keep on track, the ATO recommends that employers:

• use the new member verification request (‘MVR’) to verify that an employee’s super fund details are valid and that the fund can accept a contribution before it is made;
• check with the relevant payroll provider or clearing house that the fund is responding to MVRs;
• monitor payments, as funds have three business days to allocate or reject a payment; and
• if a payment is rejected or returned, act quickly to correct any errors and resubmit to the correct fund.

For new employees, or where an employee changes their fund, employers generally have 20 business days to make the initial contribution.

Editor: The ATO has stated that employers who genuinely try to comply will not be the focus of its compliance action during the first year of Payday Super.

Payday Super and independent contractors

The ATO is reminding businesses that Payday Super changes when super contributions must be paid, not who is entitled to receive them.

Businesses generally need to pay super where they engage an independent contractor mainly for their labour, personal effort, skills or time.

This can apply even if the contractor:

• has an ABN;
• invoices the business for their work; or
• is described as a contractor in a written agreement.

Where an independent contractor is entitled to super, the contribution must be paid for each payday and reach their super fund within seven business days after payday.

It is not mandatory to report payments made to independent contractors through Single Touch Payroll (‘STP’). However, if a business reports them voluntarily, it must meet the STP reporting requirements, including reporting qualifying earnings and super liability information.

$1,000 standard deduction for work expenses

The ATO has recently updated its Employees guide for work expenses to remind taxpayers that the new $1,000 standard deduction cannot be claimed for the 2026 income year.

From 1 July 2026 (i.e., in respect of the 2027 income year and later years), employees may choose either the standard deduction for work-related expenses of up to $1,000, or a deduction for the actual work-related expenses they incur.

Taxpayers should continue keeping records for deductible work expenses incurred from 1 July 2026. If, at the end of the 2027 income year, they choose to claim their actual expenses, they must have the required written evidence for those expenses.

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

Under Australia’s expanded AML/CTF (Anti-Money Laundering and Counter-Terrorism Financing) reforms, professional accountants, tax agents, and bookkeepers who provide “designated services” became fully subject to mandatory compliance rules starting July 1, 2026.

These rules will also apply to a range of professional service providers such as Solicitors, Real estate agents, Conveyancers and and in the banking sector.

Under the rules, Plus 1 is required to undertake Customer Due Diligence.

This involves strict identity verification of clients and the beneficial owners of client entities during onboarding and for a range of ongoing services.

We wanted to make our clients aware that you may be asked to provide additional information or to undertake an identity check. Your accountant will let you know if & when this might be required.

General tasks such as preparing your Tax, Bas or general business advice are primarily not impacted by this change.

See more information here:

https://www.austrac.gov.au/general-public/why-you-might-be-asked-id?gad_source=1&gad_campaignid=23917214073&gbraid=0AAAABD5GPu5WdnrESzEMwnivUVGpjsDCo&gclid=CjwKCAjwvsvTBhBaEiwAmf-3nqbuH_M6k3oDd3KPJV5Kxgwqjl2YPHNLsjbmoAS_PKqfRWpVYT1IIhoCBrgQAvD_BwE

Late STP reports: what the penalties now cost

Employers must lodge a Single Touch Payroll (STP) report each time they pay employees. Late reports attract a failure to lodge (FTL) penalty, and the amount increased on 1 July 2026.

The penalty unit increased to $364

The Commonwealth penalty unit rose from $330 to $364 on 1 July 2026. It is now indexed automatically every three years, with the next increase due in mid-2029.

The rate that applies is the one in force when the report fell due. Reports due before 1 July 2026 accrue at $330; reports due on or after that date accrue at $364.

How the penalty is calculated

One penalty unit accrues for each 28-day period, or part of a period, that a report remains overdue, capped at five periods. The base amount is multiplied by entity size:

Two points affect the total:

• Part periods count in full. A report one day late accrues the same amount as one 27 days late.
• Penalties apply per report. STP is event-based, so each pay run is a separate lodgment with its own penalty. Two months of overdue fortnightly payroll is four separate penalties, not one.

Separate penalties apply for false or misleading statements in an STP report. The Commissioner can allow a period of grace to correct errors.

ATO guidance on enforcement

In March 2026 the ATO released draft Practice Statement PS LA 2026/D2, setting out a five-step process for applying penalties to non-compliant STP reporting, and the circumstances in which penalties should be remitted. Consultation closed on 24 April 2026 and the final statement is pending.

The draft does not change the law or create new obligations. It standardises how ATO staff apply the existing penalty provisions.

It also confirms a safe harbour where a registered agent fails to lodge on time. This applies where the employer gave the agent all relevant information in time to lodge by the due date. The onus is on the employer to demonstrate this.

The ATO has previously indicated it applies FTL penalties mainly where an employer is repeatedly late, and generally issues a warning before penalising.

Reducing your exposure

• Lodge outstanding reports first. Penalties continue to accrue until the report is lodged.
• Diarise year-end finalisation. This is the most commonly missed STP obligation.
• Assign responsibility for lodgment. Most late reports result from a missed routine task rather than a system failure.
• Request remission in writing. The ATO can reduce or remove penalties. Requests must be supported by evidence and made after outstanding reports are lodged. Grounds include circumstances beyond your control, ATO error, and a good compliance history.

Contact our office on 03 5833 3000 if you need to confirm your STP reporting is current or want assistance with a remission request.

This year’s increase to the National Minimum Wage and minimum award wages is now in effect so you’ll need to ensure you’re paying employees correctly.

Following the Annual Wage Review, there are other workplace changes, including:

• new Payday Super rules that mean employers need to pay superannuation contributions at the same time they pay their employees’ wages
• changes to classifications and minimum pay rates in the Children’s Services Award
• changes to Pharmacy Award pay rates for some employees
• an increase to government funded parental leave pay
• an increase to unpaid flexible parental leave
• increases to income thresholds and the compensation cap.

You can use the Fairwork Pay Calculator and pay guides to check you’re meeting your obligations.

Following the change to minimum wages the Fair Work Information Statement has been updated.

Make sure you download the latest version each time you need to give the Statement to a new employee.