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)
- 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)
- 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)
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- Withholding payments at outdated tax tables → employees may be under-or over-taxed, leading to arrears or refunds, and extra administrative burden.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.