June 2025 Round Up
As we head into the final weeks of the financial year, there’s plenty to stay across — from the latest ATO rulings and minimum wage increase to year-end strategies that could impact your tax position. In this month’s update, we break down key changes and opportunities for business owners, including what to watch with trust distributions, asset write-offs, and contractor compliance. Now’s the time to review, plan, and make smart decisions before 30 June.
1. Minimum Wage Increases from July 1 Read the full article
2. Who Should Receive the Trust Distributions this Year? Read the full article
3. Instant Asset Write-off Extended – What is means for Tax Planning Read the full article
4. Employee vs Contractor: What the ATO’s New Draft Ruling Means Read the full article
Minimum Wage Increase from July 1 – What You Need to Know
Recently the Fair Work Commission has announced a 3.5% increase to the national minimum wage, effective from 1 July 2025.
This raises the hourly rate from $24.10 to $24.94, or $948 per week for a full-time employee — an increase of roughly $32 per week.
Does this apply to your business?
This change will impact businesses that employ staff under:
The national minimum wage, or
Modern Awards, which will also be adjusted in line with the decision.
Sectors likely to be affected include:
Retail
Hospitality
Aged and disability care
Health and community services
Why it matters now
With inflation currently sitting at 2.4%, this increase is above inflation — which means real wage growth for minimum wage workers. It’s designed to help restore some of the purchasing power lost in recent years.
At the same time, from 1 July 2025, the superannuation guarantee increases from 11.5% to 12%, adding further cost considerations for employers.
What you need to do
If you have employees on minimum or award wages:
Update payroll systems to reflect new rates from the first full pay period after 1 July.
Review employment contracts and budgeting to account for both wage and super increases.
Communicate changes clearly with your team to avoid confusion.
If you’re unsure how this impacts your business, get in touch — we can help review your obligations and make sure you’re set for the new financial year.
Who Should Receive This Year’s Trust Distributions?
When it comes to trusts, timing is everything.
Under tax law, beneficiaries must be entitled to their share of the trust’s income by 30 June, even though you may not yet know the final income figure.
That means you need to decide who gets what before the numbers are finalised.
Why it matters before 30 June
Distributions don’t need to be paid out immediately, but once you resolve to distribute trust income to someone, they become liable for the tax — regardless of whether they’ve actually received the funds.
That’s why it’s critical to speak with your accountant before year-end. We can help you:
Estimate the likely trust income and capital gains
Plan how to distribute it in the most effective way
Avoid decisions that trigger unnecessary tax or compliance issues
Thinking of distributing to low-income family members?
On paper, distributing income to low-tax-bracket family members sounds smart. But recent ATO rulings have cracked down on this strategy.
To claim their lower tax rate, the beneficiary must receive a genuine economic benefit. That means:
If your 18-year-old son is allocated $100,000, you need to show how he actually benefited.
Simply allocating income for tax minimisation purposes — without any real transfer of benefit — won’t hold up under scrutiny.
Makes sure you consider connected entity status
Distributing to someone also makes them a connected entity of the trust for four years.
This may not be an issue now, but it can:
Affect your eligibility for small business tax concessions
Have a significant impact if you plan to sell a business or restructure in the near future
Get in touch before 30 June and we’ll help you make confident, compliant decisions about this year’s trust distributions.
Instant Asset Write-Off Extended, What It Means for Your 2024–25 Tax Planning
Originally omitted from the 2025–26 Federal Budget, the Government has now confirmed that the $20,000 instant asset write-off will be extended for another 12 months, through to 30 June 2026.
There’s no doubt this last-minute change is welcomed by many small businesses for end-of-year tax strategy — but it’s important to know exactly how the rules apply.
Can your business claim it?
If your business has an aggregated turnover under $10 million, you can:
- Immediately deduct the full cost of eligible assets under $20,000
- Provided the asset is first used or installed ready for use between 1 July 2024 and 30 June 2025
- Write off improvements (called “second element costs”) made to assets you previously wrote off — as long as:
It’s the first additional amount spent on the asset since the original write-off,
It’s under $20,000, and
The improvement was made between 1 July 2024 and 30 June 2025
Important: The $20,000 cap is per asset, not a total limit. That means you can deduct multiple items — as long as each one is below the threshold.
What if the asset costs more than $20,000?
Assets priced at $20,000 or more don’t qualify for the immediate write-off — but they can still go into the small business depreciation pool:
15% deduction in the first year of use or installation
30% deduction each year after that
What will happen in the future?
While the $20,000 threshold remains unchanged, some political parties are pushing for a higher cap and debating whether the measure should become permanent. For now, it’s extended — but not locked in long term.
Why this matters now
If the extension hadn’t gone through, many businesses would have needed to completely rethink their year-end purchasing and deduction strategy. This update means you can continue to plan asset investments with some certainty — but timing still matters.
If you’re unsure how to make the most of this measure, or whether your purchases qualify, get in touch — we’ll help you claim what’s available and avoid the traps.
Employee vs Contractor: What the ATO’s New Ruling Means for Your Business
Recent ATO guidance, alongside two major High Court rulings, has changed the way businesses must classify workers. If you engage contractors, it’s essential to understand the new rules and review your contracts accordingly.
What’s changed?
The ATO’s Taxation Ruling TR 2023/4 now puts the written contract at the centre of worker classification. This marks a shift away from the previous “multifactorial” approach that looked at how the relationship functioned in practice.
In short:
Contracts now determine status — not just day-to-day working conditions
Contractors may still trigger superannuation obligations, even if they aren’t employees for tax purposes
What triggered the change?
Two key High Court decisions in 2022 — CFMEU v Personnel Contracting and ZG Operations v Jamsek — reshaped the legal framework.
“A series of appellate decisions… have shifted the longstanding common law approach… to one centred on contractual construction.”
— Dhanushka Jayawardena, Tax Partner, Holding Redlich
Unless a contract is clearly a sham, the terms of the contract alone now determine whether someone is a contractor or an employee.
Why it matters for your business
Getting this wrong can lead to unexpected tax, superannuation, and payroll liabilities. Even if you’ve relied on templates or longstanding arrangements in the past, those may no longer protect you.
Accountants and advisors now have a critical role to play in spotting risk — even if legal drafting is handled elsewhere.
How to assess the risk: 5 factors to watch
When reviewing contracts, look closely at these elements:
1. Control
Does the business control how, when, or where work is done? High control points to an employee relationship.
2. Delegation rights
Can the worker subcontract or delegate tasks? If yes, that supports contractor status.
3. Payment terms
Is payment tied to hours worked or results delivered? Hourly rates lean toward employment.
4. Equipment ownership
Does the worker provide their own tools or equipment? Contractors typically do.
5. Commercial risk
Is the worker financially responsible for mistakes or poor performance? If not, they may be an employee.
Superannuation: Separate rules still apply
Even with a compliant contract, you may still have to pay super.
The Superannuation Guarantee (Administration) Act defines “employee” more broadly than tax law. This includes:
Contractors who primarily provide labour or personal services
Specific roles such as musicians, entertainers, athletes, and promoters
“There are extended definitions that capture individuals as employees for superannuation even if they are not… for tax purposes.”
— Thomas Linnane, LegalVision
Penalties for missed super can be significant — up to 200% of the unpaid amount, plus admin and interest charges.
What you should do next
Review existing contracts — don’t assume future compliance fixes past exposure
Check that contracts match the true nature of the work
Assess super obligations separately
Refer complex or unclear arrangements to a legal expert
The ATO’s Practical Compliance Guideline 2023/2 is a helpful tool to evaluate which arrangements are likely to attract scrutiny.
If you’re not sure where you stand — or want peace of mind before EOFY — we can help review your current contracts and advise you on the right next steps.
Important: This is not advice. Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. This article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval. Liability limited by a scheme approved under Professional Standards Legislation.
