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NSW Businesses Must Prepare for an Extra Public Holiday in 2026 and 2027

The NSW Government has confirmed that when Anzac Day falls on a weekend, a substitute public holiday will be observed on the following Monday. Anzac Day falls on Saturday 25 April 2026 and Sunday 25 April 2027, which means NSW businesses will have an additional public holiday on Monday 27 April 2026 and Monday 26 April 2027. The arrangement is temporary and will be reviewed after the trial period.

The additional Monday public holidays apply statewide and must be treated as standard public holidays for payroll, rostering and leave purposes. Businesses will effectively manage two public holidays across the one long weekend: Anzac Day itself and the substitute Monday. Businesses operating across multiple states will also need to account for different arrangements in other jurisdictions.

How the additional Monday public holiday affects your payroll obligations

The Monday public holidays on 27 April 2026 and 26 April 2027 must be treated as standard public holidays for payroll purposes. Employers should:

• Update payroll systems and calendars to reflect both dates
• Check award or enterprise agreement conditions for applicable public holiday penalty rates
• Review cross-jurisdiction payroll impacts, as other states and territories manage substitute Anzac Day arrangements differently

What the Anzac Day long weekend means for rostering and staff requests

NSW businesses will manage two public holidays across the one long weekend. Employers should begin roster planning early, particularly in sectors that operate seven days a week. This includes consulting with staff about availability and issuing draft rosters or formal written requests for public holiday shifts.

Under the Fair Work Act, employers can request but not require employees to work on a public holiday. Employees can refuse if their refusal is considered reasonable.

How to calculate penalty rates across the Anzac Day long weekend

The additional Monday public holiday triggers full public holiday penalty rates under applicable awards and agreements. Employers should account for:

• Additional labour costs for Monday shifts
• Increased overtime loading for employees working across both the Saturday or Sunday and the Monday
• Potential increases in payroll tax liabilities depending on wage thresholds

How annual leave and trading hours interact with the Monday public holiday

The Monday public holiday operates the same as any other public holiday. Employees on annual leave must be paid for the public holiday and cannot have it deducted from their leave balance. Employers should plan for staffing gaps early if employees request extended leave around the long weekend.

Restricted trading rules apply on Anzac Day itself, on the Saturday in 2026 and the Sunday in 2027, but not on the Monday. The Monday is treated as a normal public holiday with no Anzac-specific trading restrictions, giving businesses more operational flexibility on that day.

What multi-state employers need to check for each jurisdiction

If your operations or workforce span multiple states, payroll must reflect the different public holiday arrangements in each jurisdiction:

• ACT: Monday public holiday only
• NT, QLD, SA, TAS and VIC: Saturday only, no Monday substitute
• WA: Both Saturday and Monday are public holidays

Failing to align payroll with state-by-state requirements can result in overpayments, underpayments, or both.

How to budget for the additional public holiday costs

Public holidays add measurable cost to businesses, particularly small and medium enterprises. Employers should factor the Monday public holiday into annual budgeting, labour forecasting and cash flow planning. The NSW Premier has acknowledged the extra holiday may add strain to small businesses, and the arrangement will be reviewed after the trial period.

If you have questions about how the new public holiday arrangements apply to your business, get in touch with us.

ATO targets businesses using cash to avoid tax obligations

The ATO has made it clear it is actively targeting businesses that use cash transactions to avoid their tax and employer obligations. This includes businesses that under-report or fail to report cash income, pay for goods and wages in cash to keep transactions off the books, and deliberately keep their income below the $75,000 GST registration threshold.

How the ATO is identifying businesses that under-report cash income

The ATO is using data analytics and joint operations across government agencies to identify cash-only businesses that are avoiding their tax obligations. This means the ATO is not waiting for businesses to come forward. It is actively cross-referencing data to find discrepancies.

Specifically, the ATO is looking at businesses that fail to report all sales transactions, do not issue receipts, avoid paying GST, income tax, PAYG withholding, and superannuation guarantee, and do not provide workers with WorkCover protection.

They are also targeting businesses that undercut competitors by offering lower cash prices, and those that exploit workers by not meeting award conditions or work cover protections.

What happens when a business hides cash income: a real life case study

A pizza restaurant was audited by the ATO in 2023 after operating mostly on a cash-only basis. The business also accepted payments via PayID and had an ATM installed at the shopfront, which customers were directed to use to withdraw cash to pay for orders. The ATO found the business had failed to keep accurate records and report all income, resulting in a 50% penalty for reckless behaviour.

A second audit was carried out in the 2024 income year following a community tip-off. This audit found the restaurant had not reported around $140,000 in income, and had claimed around $80,000 in expenses without supporting documentation.

The ATO determined this was intentional, not an oversight, and issued the following penalties:

• A GST shortfall of over $17,400
• A 75% penalty for intentional disregard
• A 20% uplift on the GST shortfall, resulting in penalties of over $11,500
• A shortfall penalty of over $38,000 for false and misleading statements

How to make sure your business is meeting its cash reporting obligations

The ATO has been clear about what it expects from businesses. This includes reporting all income, including cash, paying workers correctly and in line with award conditions, meeting superannuation guarantee obligations, keeping accurate records, and registering for GST if turnover exceeds $75,000.

If you have any concerns about whether your business is meeting its cash reporting obligations, get in touch with us.

How a “Standard” Family Trust Setup Led to a Costly ATO Section 100A Review

Most family trusts in Australia are set up in a similar way. Income is distributed on paper to adult children or bucket companies to manage tax, while the money often stays in the family business for everyday use.

Because this approach is so common, many families assume it is perfectly safe. But that is not always the case.

This real example shows how a standard discretionary trust setup led to an ATO Section 100A review, several years of trust distributions being treated as ineffective for tax purposes, and an unexpected tax bill for the trustee, even though tax had already been paid by the named beneficiaries.

The Background

Mark and Lisa ran a successful family business through what most people would describe as a fairly standard discretionary trust. The trust was established when the business was small and cash was tight. Over time, the business grew, profits improved, and the trust began distributing larger amounts of income each year.

The tax returns were lodged. There had never been a problem with the ATO. On the surface, everything looked to be in order. Years later, the ATO took a different view

Year one: the seemingly ‘normal’ distribution that created a bigger problem later

In a strong year, the business earned about $280,000.

To manage tax, the trust distributed $40,000 each to Mark and Lisa’s adult children. Both were over 18, both were studying, and neither earned much income. The remainder was split between Mark, Lisa, and a company beneficiary.

On paper, the tax outcome improved.

However, no money was ever paid to the children. There were no bank transfers, no separate accounts, and no decisions made by the children about how the funds should be used. Instead, the trust retained the money in its main business account to pay suppliers and reduce debt.

At the time, this was viewed as “family money” that could be accessed later.

That single detail – that the children never actually received or controlled the distributions – became critical years later.

Year two: a tidy company structure that didn’t change who benefited

The following year was even stronger. The trust continued to use a bucket company to cap tax at the company rate, a common and legitimate strategy when structured and implemented correctly.

The trust distributed $200,000 to the company as an unpaid present entitlement, with the intention it would be paid when cash flow allowed.

In practice, the trust effectively borrowed the funds back from the company, with balances managed through loan arrangements and year-end accounting entries. The company did not use the funds for its own business or investments, and economically, nothing had changed.

Year three: when routine distributions kept the benefit in the same hands

By the third year, the process had become routine.

Distributions were again made to the children. The company received another entitlement. Loans were adjusted through year-end journal entries.

What this created was a circular flow. Income was allocated on paper, but the money either never left the trust or returned almost immediately through loans or offsets.

No single step appeared problematic in isolation. Together, however, the pattern reinforced the same issue: the economic benefit of the trust income consistently remained with the same people.

The ATO review: when trust paperwork and cash flow don’t align

Mark later received a letter from the ATO. It was not an audit notice. It was described as a review.

The ATO asked for:

• the trust deed
• distribution resolutions
• loan agreements
• bank statements
• explanations of how beneficiaries benefited from distributions

Josh and Emily were asked whether they received the trust distributions, whether they knew about them, and whether they decided what to do with the money.

They said they did not really think about it, their parents handled it, and they did not receive the cash.

The ATO’s focus: who actually benefited from the trust income

The ATO did not argue that the trust deed was invalid, that the resolutions were late, or that tax returns were lodged incorrectly.

Instead, they focused on one question: who actually benefited from the trust income?

The ATO view was that:

• the adult children were beneficiaries on paper only
• the bucket company never truly benefited
• the trust controllers enjoyed the economic benefit
• the arrangements were not ordinary family dealings

This brought the arrangement within the scope of section 100A.

The result: trust distributions ignored and tax shifted to the trustee

The ATO proposed to treat several years of trust distributions as ineffective for tax purposes and assessed the trustee at the top marginal tax rate on those amounts.

This occurred even though tax had already been paid by the children and the company.

While refunds may be possible in some circumstances, the immediate impact was a significant and unexpected cash-flow burden for the trustee.

What could have reduced the risk

None of the decisions in this example were extreme or unusual.

However, a few changes would have significantly reduced the risk.

If the adult children had actually received the distributions and controlled how the money was used, the arrangement would have been far stronger. That does not prevent parents from helping later, but the benefit needs to sit with the beneficiary first.

Similarly, if the company beneficiary had used the funds for its own investments or working capital, rather than acting as a temporary holding point, the outcome may have been different. A company beneficiary needs to operate as a real entity, not just exist for tax outcomes.

Trustees should also feel comfortable stepping back each year and asking simple questions:

• Who is really benefiting from this distribution?
• Will the money actually be paid?
• Would this arrangement still make sense if tax was not a factor?

These questions often highlight issues early, when they are far easier to address.

What this means in practice

Section 100A is not concerned with intent or wrongdoing. It looks at what actually happened in practice.

Where trust income is allocated to one party, but the economic benefit sits elsewhere, the ATO may step in and rewrite the tax outcome.

This is why alignment between trust paperwork and how money is actually used matters over time, particularly where arrangements continue year after year.

Holiday homes and rental deductions: what counts as genuine rental use

The Australian Taxation Office (ATO) has released three draft documents that affect rental property owners, with a particular focus on holiday homes:

• Draft Tax Ruling (TR) 2025/D1 – Rental property income and deductions for individuals who are not in business

• Draft Practice Compliance Guideline (PCG) 2025/D6 – Apportionment of rental property deductions

• Draft PCG 2025/D7 – Application of section 26-50 for holiday homes that are also rented out

Together, these documents clarify when deductions may be reduced or denied, especially where properties are used for private purposes.

Below is what you need to know.

1. Personal use can change how the property is treated

If your holiday home is mostly used for family holidays, or is regularly blocked out during peak periods such as Christmas, Easter, or school holidays, the ATO may treat it as a private property.

If this occurs, the ATO may deny deductions for ownership costs, including:

• Interest

• Council rates

2. Advertising alone is not enough

Listing your property on Airbnb or other sharing-economy platforms does not automatically entitle you to rental deductions.

The ATO looks at actual rental activity and behaviour, not just whether the property is advertised.
Consistently blocking out peak holiday periods for personal use is likely to attract the ATO’s attention.

3. Section 26-50 and “leisure facilities”

PCG 2025/D7 explains that holiday homes mainly used for recreation may be treated as “leisure facilities.”

Where this applies:

• Deductions for ownership costs, including interest, are denied

• Unless the property is primarily used to earn rental income

4. ATO risk zones for holiday homes

The ATO has categorised holiday home arrangements into risk zones. Properties in the Amber or Red zones are more likely to attract scrutiny.

Green zone (Low risk):

• Mostly rented, with little private use

• High levels of income-producing occupancy, particularly during peak holiday periods

• Income generation is prioritised over other uses

Amber zone (Medium risk):

• Some private use during peak periods

• Increased personal use by the taxpayer and friends

• Income forgone so the property is available for personal use

Red zone (High risk):

• Mostly private use or largely unavailable for rent

• Personal use prioritised by blocking out time each year

• Advertising at unreasonably high rates that likely deter renters during high-demand periods

• Limited attempts to rent out the property

Can you still claim interest deductions?

Yes — but only if the property is genuinely income-producing.

• Fully rented holiday homes:
  Interest is deductible as usual.

• Mixed-use holiday homes:
  Interest can be claimed for the rental period, using ATO-approved apportionment methods.

• Mostly private use:
  Interest deductions will generally be denied under section 26-50.

Key takeaway

The ATO is targeting properties that resemble private retreats rather than genuine rentals.
If your property has significant personal use or limited rental activity, it is more likely to come under scrutiny.

If you are unsure about your current arrangements, we recommend reviewing them and contacting us if you’re unsure of your current situation. 

Payday Super: December Update

From now until mid-2026, we’ll share updates to help you prepare for Payday Super. Each month we’ll focus on one part of the change and what it may mean for your business.

Last month we explained the key changes coming on 1 July 2026, starting with super being paid with wages. You can read the full article here.

This month’s insight: Super may apply more broadly

One of the biggest changes that Payday Super brings is that it will be calculated on a broader range of earnings than the current ordinary time earnings, so more of the payments you already make may attract super once the new rules begin.

What this means for you in practice

Even if the total super you pay won’t change much, the way it is calculated might. Your payroll system will need to apply super correctly every payday, not just at the end of a quarter. This is where early awareness helps. If you know how different pay types are currently set up, wages, allowances, bonuses, regular top-ups, you’ll be in a better position to make small adjustments ahead of time.

What you may want to review over the coming months

• Which earnings in your payroll currently have super applied

• Whether any pay items are treated differently than you expect

• Any areas where you’re unsure how super should apply under the new rules

If you’d like support reviewing your payroll setup or understanding how these changes apply to your business, our team can work through each part with you well before the 2026 deadline.

Amendments on Taxing Unrealised Gains: What Division 296 Means for Your Super

The Federal Government recently announced significant amendments to the proposed Division 296 superannuation tax. The changes take a clearer, more balanced approach, addressing concerns about fairness, complexity and long-term viability.

What’s changing

The government has outlined five key amendments to Division 296:

1. The introduction of two thresholds

• First threshold: Earnings above $3 million taxed at 30%

• Second threshold: Earnings above $10 million taxed at 40%

The introduction of a second threshold replaces earlier calls for an absolute cap on superannuation balances. Actual calculation methodology is still to be detailed.

2. Indexation of thresholds

Both thresholds will be indexed to inflation, using a method aligned with the Transfer Balance Cap. This ensures the thresholds remain effective, helping to prevent bracket creep as growing investment returns increase superannuation balances over time.

3. Removal of tax on unrealised capital gains

One of the most contentious elements of the original proposal, the taxation of unrealised capital gains has been removed.

This change means members will not be taxed on paper profits, avoiding the risk of paying tax without having sold the asset or received the cash. Treasury will consult with the superannuation sector to determine the appropriate calculation method and ensure the approach is practical and equitable.

Our Sydney personal wealth management team offers clear, personalised solutions for your financial future. We have specialists in wealth management, superannuation, self-managed super funds, estate planning, debt advisory and insurance services.

4. Changes delayed by a year

Implementation has been pushed back by a year to 1 July 2026, with the first year of assessment based on 30 June 2027 balances. This gives fund members additional time to assess their position and consider any planning opportunities.

5. Alignment for judicial pensions

The legislation will be amended to better align the treatment of federal and state judicial officers, ensuring consistency in how defined benefit interests are taxed across jurisdictions. Details of how this will work are still uncertain.

Who will be affected

Treasury estimates that, based on current data:

• Around 90,000 individuals have superannuation balances above $3 million, and

• Approximately 8,000 individuals hold more than $10 million in superannuation.

These figures suggest the measure remains targeted at the top end of the system, consistent with the government’s objective of maintaining equity and long-term sustainability within the superannuation framework.

Still some uncertainty

While the removal of tax on unrealised gains and the introduction of indexation are welcome, there is still a fair amount of detail to be clarified, particularly around how realised capital gains will be taxed.

While Treasurer Jim Chalmers has confirmed that the additional tax will only apply to gains realised from 1 July 2026 onwards, the mechanics of how realised gains will be calculated remain unclear.

There is still a lack of clarity around how these rules will be applied at the individual member level, which raises practical concerns for both advisers and clients.

Key questions remain, such as:

• Will different cost bases need to be tracked for assets taxed under normal rates versus those above the $3 million threshold?

• How will the uplift or cost base reset be determined?

Further guidance is expected once consultation has concluded and draft legislation is released.

Planning ahead

There is no need to act just yet, but it is a good time to start thinking about how these changes could shape your long-term strategy.

For some, investing above the $10 million threshold outside of super (through a family trust or investment company) might lead to a better tax result. The right approach will depend heavily on your family’s circumstances.

It is also worth keeping in mind the often-overlooked death tax on super benefits paid to adult children and other non-tax dependants. This can have a real impact on how effectively wealth is passed onto the next generation.

Our view

The revised Division 296 proposal represents a more balanced approach that:

• Removes the controversial taxation of unrealised gains

• Introduces progressive thresholds with inflation protection

• Provides additional time for implementation

The proposals are not law yet. Once the final legislation is released and passed through Parliament, we will make sure you have a clear update and practical guidance on what it means for you.

$20,000 Instant Asset Write-Off Due for Extension To 30 June 2026

If you’re a small business owner planning to invest in new equipment or technology, the government is planning to extend the $20,000 instant asset write-off by a further 12 months until 30 June 2026.

This measure was announced by the Treasurer as an election commitment on 4 April 2025 and is contained in a recently introduced Bill. It’s not yet law, but once passed, the $20,000 threshold will apply until 30 June 2026.

Without this amendment, the threshold would have dropped back to the ongoing legislated level of $1,000 from 1 July 2025.

What the Extension Covers

The extension would apply to:

• Eligible depreciating assets costing less than $20,000 each.

• Eligible cost additions included in the second element of an asset’s cost.

• General small business pools, allowing a full write-off where the pool balance is below $20,000 at year end.

Small businesses that use the simplified depreciation rules and have an aggregated turnover of less than $10 million can continue to immediately deduct the business portion of eligible assets first used or installed ready for use by 30 June 2026.

The write-off can apply to multiple assets, provided each individual asset is under the $20,000 limit.

Why It’s Time to Revisit Your Positive Duty Obligations

With new enforcement powers now in effect, employers can no longer rely on “set and forget” compliance. The Australian Human Rights Commission can investigate your workplace even if no complaint has been made, so every business must show active compliance with the positive duty under the Sex Discrimination Act 1984.

What is the positive duty?

Since December 2022, employers have been required to take reasonable and proportionate steps to eliminate unlawful conduct such as sexual harassment, discrimination, and hostile workplace environments. From December 2023, the Commission gained powers to enforce these obligations directly.

Why revisit now?

• The Commission can initiate investigations without a complaint.

• Applicant law firms are increasingly using gaps in employer compliance in disputes.

• Passive compliance (policies, training once-off) is no longer enough.

Key areas to focus on

1. Leadership
Leaders must set the tone for workplace culture and be actively engaged.
Ask: Are leaders aware of recent incidents? Do they understand their role in prevention and response?

2. Training and communication
Refresher training is essential. One-off sessions lose impact quickly. Pair training with consistent communication so expectations are reinforced.
Ask: Have employees received refresher training in the past 12 months? Are managers reinforcing respectful behaviour in team meetings?

3. Risk assessment
This is not a one-time exercise. Review at least annually, engage with staff, and address emerging risks.
Ask: When was the last review? Are risks like harassment or discrimination being mapped and managed?

4. Policies
Out-of-date policies send the wrong signal. Policies should clearly define unlawful behaviours and outline reporting processes and consequences.
Ask: Does your policy include clear definitions and reporting steps? Is it updated regularly?

5. Reporting processes
Employees must know how to report unlawful conduct, and managers must know how to respond. A trauma-informed, person-centred approach is essential.
Ask: Do staff know who to report to? Are those receiving reports trained to handle them properly?

6. Prevention Plan
A Prevention Plan must be a living document, updated to reflect real risks and feedback from staff. It should cover leadership accountability, training, and measurable actions.
Ask: Has it been updated in the past 6–12 months? Is it actively guiding workplace practice?

Final thought

Positive duty compliance is not a tick-box exercise. It’s a continuous, proactive commitment to safety, respect, and prevention. If the Commission asked tomorrow, could your business show what it has done?

If the answer is no—or even “not sure”—now is the time to act. Get in touch for more support with your Positive Duty Obligations.

Deadline Approaching: Register Your Trading Name Before 31 October

In just a few months, unregistered business names will be wiped from ABN Lookup.

If you’re trading under a business name that’s not officially registered with ASIC, changes are coming that could affect your credibility, payments, and client trust.

From 1 November 2025, all unregistered trading names will be removed from ABN Lookup. That means if your business name isn’t registered, it will no longer appear in the public record used to confirm your GST status and business identity.

This is the final step in a long-planned phase-out that began in 2012, when the national Business Name Register was launched to improve transparency and legal certainty.

What is a trading name?

A trading name is any name you use to run your business that isn’t your legal name.

For example:

• A sole trader named Tom Jones trading as Tom Jones Plumbing

• A company called Bright Ideas Pty Ltd trading as Bright Tech Solutions

If you haven’t registered this trading name with ASIC, it will disappear from ABN Lookup on 1 November.

What’s changing on ABN Lookup?

From 1 November 2025, ABN Lookup will only show:

• Your legal name (the name on your ABN or company registration)

• Your GST registration status

• Any business names registered with ASIC

If your trading name is not registered, it will be removed and will no longer appear publicly.

Why it matters

Clients, suppliers, and government agencies use ABN Lookup to:

• Confirm your business identity

• Check your GST registration

• Match your invoices to your ABN

If your name doesn’t show up:

• You risk losing the legal right to use the name if someone else registers it first.

• Clients may delay or withhold payment

• They may be unable to claim GST input tax credits

• Your business could appear non-compliant or untrustworthy

What you need to do now

Review your trading name(s)
If you’re operating under any name other than your legal name, check whether it’s already registered.

Register your trading name with ASIC
Visit asic.gov.au to register your business name. It’s a simple process that protects your business.

Check your ABN details
Make sure your registered name is linked correctly and that your GST status is accurate.

Need help reviewing your business name or getting registered?
We can assist with reviewing your current setup, registering your trading name with ASIC, and making sure your ABN records are up to date. Get in touch now to avoid last-minute issues.

Beware the 47% Tax Trap: Family Trust Distribution Pitfalls Explained

Family trust elections (FTE) can unlock valuable tax concessions – but one misstep could see you hit with a 47% tax bill.

Why Family Trust Elections Matter

Family trust elections (FTE) allow trusts to access certain tax concessions. However, they come with a major risk: triggering the family trust distributions tax (FTDT), which is levied at 47% (top marginal tax rate plus Medicare levy).

Complex Rules can Mean Costly Mistakes

“FTE and FTDT provisions are complex, poorly understood, and can lead to significant tax pitfalls for family businesses and private groups,”
– Nitin Saby, tax advisor and former ATO director

Key complexities include:

• Choosing a ‘test individual’, whose family group defines who can receive distributions.

• Using ATO-approved forms precisely, including elections, revocations, or variations.

Who Counts as ‘Family’?

Under an FTE:

• Distributions can only go to the test individual’s family group.

• The family group includes their spouse, parents, grandparents, siblings, and any companies, trusts, or partnerships where family group members hold fixed interests.

Distributing outside this group triggers FTDT at 47%.

Common Triggers for Family Trust Distribution Tax

• Distributions to non-family group members (via payments, credits, loans, or transfers).

• Poor record-keeping or unclear beneficiary registers.

• Complex family structures or succession issues, especially if the test individual dies and trusts aren’t updated.

ATO Scrutiny is Increasing

“There is a clear trend of the ATO targeting high-net-worth and multi-generational private groups for FTDT compliance,”
– Nitin Saby

This is especially true for longstanding structures involving generational wealth transfers.

How to Stay Compliant

• Carefully considering all implications before making an FTE.
• Maintaining meticulous record-keeping.
• Reviewing trust deeds regularly.
  Seeking professional advice frequently.
• Monitoring legislative and case law changes.