November 2025 Round Up
Change never really stops, but not all of it matters. This month, we’ve unpacked the updates that do: the new payday super rules coming in 2026 and why you need to prepare now, the latest super tax proposal reshaping how larger balances are managed, and what it takes to keep a family business running smoothly without losing its soul.
1. A Practical Guide to Running Your Family Business in Australia Read the full article
2. Amendments on taxing unrealised gains – What Division 296 means for your super Read the full article
3. Payday superannuation: What you need to do before July 2026 Read the full article
A Practical Guide to Running your Family Business in Australia
Family businesses are the backbone of Australia’s economy, accounting for roughly 70% of all businesses. From farms to cafes and construction firms, many local enterprises are family-owned.
Running a family business can be incredibly rewarding — you’re building a legacy and working with loved ones. However, it also brings unique challenges, as family emotions and business decisions often mix when the dining table doubles as the boardroom.
This article outlines key legal, accounting, tax, and strategic tips to help small- to medium-sized family businesses succeed.
Choosing the proper business structure
One of the first steps is deciding on a structure. Common options include sole trader, partnership, company, and family trust. Each has different implications for liability, tax and control.
| Structure | Features for family business |
|---|---|
| Sole trader | A single owner has complete control and a simple setup, but unlimited personal liability. |
| Partnership | Two or more owners, shared control. Not a separate entity — partners have personal liability, and the business can dissolve if one leaves. |
| Company (Pty Ltd) | A separate legal entity with limited liability for family shareholders. Formal governance (directors, etc.) and shares make succession easier. Profits are taxed at 25% if a small company. |
| Family trust | A discretionary trust (with a trustee) operates the business for family beneficiaries. Allows flexible income distribution for tax purposes and can protect assets from personal liabilities. Requires a trust deed and proper administration. |
It’s wise to consult an accountant or lawyer when choosing a structure, as the decision affects your taxes, legal obligations and how family members can be involved.
For example, a discretionary trust lets you split income tax-effectively among relatives, while a company structure makes it easier to transfer ownership to the next generation via shares.
Example:
A husband-and-wife team running a café might start as a simple partnership, but as the business grows, they may incorporate a limited liability company. They could even set up a family trust to hold the company shares, allowing income to be split between them and their adult children who work in the café.
By getting the structure right and keeping business and family arrangements clear, this family can enjoy the convenience of working together while reaping financial benefits and protecting their assets. Each family business will have its own journey, but careful planning and open communication are universally helpful in turning a family venture into a lasting success story.
Legal essentials and family governance
Running a family business professionally means putting proper legal frameworks in place.
Formal agreements are crucial — document roles, ownership and decision-making processes clearly. If you have multiple family co-owners, set up a partnership or shareholders’ agreement to spell out each person’s role, decision-making authority, and what happens if someone exits. This helps prevent disputes by addressing issues such as retirement or strategic disagreements before they arise.
Set clear boundaries between family and work. Personal issues can easily spill into the business if not managed, so try to keep “shop talk” to work hours (not every family dinner) and make sure everyone understands their role in the business. Good communication is key — clarify expectations and ensure everyone feels heard.
Bring in outside talent or advisors when needed. A non-family perspective can fill skill gaps and reduce insular decision-making. Treat family and non-family staff equally and professionally to avoid any perception of nepotism. An external mentor or even a small advisory board can also help keep your business on track objectively.
Example:
Australia has many enduring family businesses that chose their structures wisely. Haigh’s Chocolates, for instance, has remained a privately held family company since 1915 and is now led by the fourth generation of the Haigh family. Another iconic example is Coopers Brewery, founded in 1862, which is still family-run after six generations of Coopers at the helm. These companies show that getting the foundations right and planning for the long term can build a legacy.
Accounting, finances and tax compliance
Sound financial management keeps your family business healthy.
First, keep business finances separate from personal finances — open a dedicated business bank account and avoid using it for personal expenses. This makes bookkeeping easier and is viewed favourably by the ATO.
Consider using accounting software or a bookkeeper to track income and expenses, manage cash flow, and ensure bills and taxes are paid on time. Staying on top of the books also helps maintain harmony, because financial surprises or unpaid debts can strain family relationships.
If you employ family members, treat them like any other employees for legal and tax purposes. This means:
Pay legal wages at least the minimum award rate, and make superannuation contributions.
Keep proper records of their work — timesheets and employment contracts.
Avoid artificial arrangements — don’t pay family who do no real work, or pay inflated wages just to reduce tax. The ATO monitors such practices and can deny deductions.
One benefit of hiring family is that you may spread income around. For example, a lower-earning spouse or an older teenager on the team can earn up to the tax-free threshold (about $18,200) and pay no income tax, while your business still claims a deduction for their wages. Just ensure any family member in the business is actually contributing and being paid fairly for what they do.
Stay on top of tax compliance
Lodge your BAS and tax returns on time, and meet payroll reporting requirements. Remember that qualifying small companies pay a lower 25% company tax rate, and if you use a trust, follow the rules for distributing income to family members properly.
An accountant can help you navigate issues like fringe benefits tax and ensure you’re getting any small-business tax concessions available.
Planning for succession and long-term success
Plan for succession early — many experts recommend starting handover plans at least three to five years in advance. Talk openly with your children or other potential successors about their interests. Don’t assume they’ll automatically want to take over.
If not all your kids want to be involved, figure out a fair way to treat those who aren’t. Gradually prepare the next generation by increasing their responsibilities and mentoring them. Decide how and when you will hand over leadership and ownership, whether you step back slowly or retire outright.
Every family is different — some transitions are smooth, others are emotionally charged. An independent advisor can help guide tough conversations, and professional advice will ensure the transition is structured correctly.
Conclusion
Running a small-to-medium family business is a balancing act between family and commerce.
By setting up the right legal structure, keeping solid accounts, staying on top of tax obligations, and planning for growth and succession, you set the stage for lasting success.
Remember to communicate openly and seek professional advice when needed — accountants, tax agents and lawyers (who often advise many family businesses) can provide invaluable guidance.
With passion, planning and a bit of patience, your family business can not only support your household today but also become a proud legacy for future generations.
Good luck with your family business journey!
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.
Payday Superannuation: What you Need to Do Before July 2026
On 2 May 2023 the Australian Government announced that from 1 July 2026, employers will be required to pay their employees’ superannuation guarantee (SG) at the same time as their salary and wages.
On 9 October 2025, the Government introduced the Treasury Laws Amendment (Payday Superannuation) Bill 2025 and the Superannuation Guarantee Charge Amendment Bill 2025External Link.
This measure is now law.
Changes in the introduced bills and earlier government announcements include:
- Timing of contributions to superannuation. From the start of the measure, employers will be required to pay their employees’ SG at the same time as their salary and wages. They will be liable for the superannuation guarantee charge (SGC) unless contributions are received by their employees’ superannuation fund within the required timeframe, generally 7 business days after payday.
- Payday is the date that an employer makes a qualifying earnings (QE) payment to an employee.
- Contributions will generally need to arrive in employees’ superannuation funds within 7 business days of payments of QE. QE is a new concept which includes:
- ordinary time earnings (OTE)
- salary sacrifice superannuation contributions
- other amounts which are currently included in an employee’s salary or wages for SG
- An extended timeframe to pay contributions will apply in certain circumstances, for example when an employer is contributing to a superannuation fund for the first time for an employee (including new employees), when payments of QE are made to an employee outside their regular pay cycle and where exceptional circumstances have impacted the ability of multiple employers on large scale to pay superannuation contributions.
- Updated superannuation guarantee charge. Where employers fail to pay contributions in full and on time, they are liable for SGC. The SGC will be updated and consist of
- Individual final SG shortfall: any contributions that remain unpaid when the SGC is assessed. The shortfall calculation will be based on QE, creating consistency with the calculation of SG contributions. Late contributions paid by an employer before they are assessed for the SGC will reduce the individual final SG shortfall.
- Notional earnings: an interest component to compensate employees for lost superannuation fund earnings when their contributions have not been received in full and on time.
- Administrative uplift: an additional charge levied to reflect the cost of enforcement and encourage employers to make voluntary disclosures to the ATO.
- Choice loading: A choice loading will apply where an employer does not comply with the choice of fund rules.
- Once SGC is assessed, additional interest and penalties may apply if the SGC liability is not paid in full.
- General interest charge (GIC): GIC will accrue on the entire SGC amount rather than just the total of the individual SG shortfall amounts.
- Late payment penalty: If SGC remains unpaid 28 days after it is assessed, the ATO will be required to issue an employer a notice to pay. If the employer does not pay the SGC included in a notice to pay within a further 28-day period set out in the notice, they will be liable to a late payment penalty.
- The SGC will be tax-deductible, ensuring the income tax consequences for paying employees’ superannuation are consistent.
- The late payment offset will no longer apply to amounts contributed after 1 July 2026.
- SBSCH decommission. The Small Business Superannuation Clearing House (SBSCH) will be retired from 1 July 2026 and closed to new users from 1 October 2025. The improvement in payroll software solutions over recent years provides employers with cost-effective and higher quality options for paying superannuation contributions more timely and accurately. We will engage with small businesses ahead of time to guide them in transitioning to a commercial alternative that is fit-for-purpose for Payday Superannuation.
- Fund allocation and SuperStream updates. The deadline for superannuation funds to allocate or return contributions that cannot be allocated will be reduced to 3 business days, down from 20. The SuperStream data and payment standards will be revised to allow faster payments via the New Payments Platform and improve error messaging to ensure employers and intermediaries can quickly address errors.
- STP updates. Employers will be required to report in Single Touch Payroll (STP) both the QE and the superannuation liability for an employee, ensuring the SG can be correctly identified.
The ATO has released a draft practical compliance guideline (PCG) 2025/D5 Payday Super – first year ATO compliance approach, in relation to its compliance approach for the 2026–27 year.
The move to payday super will help employees track their super contributions more easily and protect their retirement savings. For employers, it will mean a shift in process, and potentially in cashflow, so early preparation is key.
If you’d like to understand how these changes could affect your business or need help updating your payroll systems, we can assist.
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.