Compliance
Getting Ready: Compliance & Payroll Changes Under Australia’s 2025–26 Budget
Big changes are coming to Australia’s payroll withholding, super payments, and employer record-keeping—compliance now means updating systems before 1 July 2026.
By NomadicTax Research Team • 5-8 min read • June 11, 2026
## Key Compliance Changes from Budget 2025-26 & ATO Announcements
Several upcoming or recent ATO policies affect payroll, superannuation, and withholding obligations:
- **PAYG withholding tax tables** are updated to reflect income tax cuts and thresholds from 2025-26 Budget. The new schedules take effect **1 July 2026**. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/2026-pay-you-go-payg-withholding-tax-tables-0?utm_source=openai))
- The **Small Business Superannuation Clearing House (SBSCH)** will **close permanently on 1 July 2026**. Existing users must switch to an alternative and download records before 30 June 2026. ([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super/small-business-superannuation-clearing-house?=redirected_sbsch&utm_source=openai))
- **Mandatory beneficiary TFN reporting** for closely held trusts is being introduced from **1 July 2026**, embedded within trust return lodgments. Plans also include a “closely held trust” indicator and a “No TFN Provided” option. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/MTAS220260121?utm_source=openai))
## Why these matter—and the risks of non-compliance
Failing to act in time carries penalty risk, audits, or unanticipated tax liabilities. For example:
- Using SBSCH past its closure date could mean **missed super guarantee payments** or lack of proof for payments already made. Employers may face legal or financial exposure.
- Withholding payments at outdated tax tables → employees may be under-or over-taxed, leading to arrears or refunds, and extra administrative burden.
- Trusts without beneficiary TFNs or with incomplete reporting may incur penalties and loss of certain concessional treatments.
## What businesses/employers should do now
- **Update payroll software** to incorporate the 2026-27 withholding tables. Test before July 1 to ensure correct deductions/calculations.
- **Plan your super contributions system**: Choose a clearing house, commercial provider, or ensure your current payroll software supports SuperStream. Begin transition for SG and payment process.
- **Prepare trusts**: gather required details, reach out to beneficiaries to collect TFNs; update trust deeds or record-keeping systems to flag closely held trusts. Designate new labels as required.
- **Communicate with staff and stakeholders**: employees should know how tax cuts affect them; beneficiaries know what information is needed.
## Example scenarios
- **Small business Linda** uses the SBSCH to consolidate SG payments for 15 staff. By early June 2026, she downloads transaction history and shifts to an alternative provider. If not, come 1 July she loses access and may miss payment instructions.
- **Trusts with 5 beneficiaries**: Administrator must collect TFNs and adjust trust return labels; include an indicator for closely held trust. Failure to comply may delay or limit deductions.
## Summary
From mid-2026, compliance obligations intensify. Payroll and withholding rules change with tax cuts; super payment methods shift; trust reporting tightens. Advance preparation, system updates, and clear record-keeping are essential.
**To do now:**
- Audit current payroll and trust reporting systems.
- Schedule software updates/outsourced provider changes.
- Begin collecting beneficiary TFNs and updating structure documentation.