Practice Update - April

Pay Day Super is coming

From 1 July 2026, proposed changes will require employers to pay super at the same time as wages, instead of quarterly.

What's Changing?
Currently, employers are required to pay super on a quarterly basis.
Under the changes:

• Super must be paid on or before each payday
• This will apply to all employers
• Late payments may attract increased penalties and interest

• Cash flow management
• Payroll processes and systems
• Compliance obligations

Now is the time to start reviewing your payroll processes and cash flow to ensure you're prepared.

What's next?
We'll be sharing more detailed information next week, along with upcoming client sessions to help you prepare.

If you'd like to discuss how this may impact your business, please speak with your CSCG client manager. 

Know when a new logbook is required

Editor: Maintaining an accurate car logbook is essential when calculating the business-use percentage of vehicle expenses, including fuel, registration, insurance and depreciation for tax deduction purposes.

Taxpayers can generally rely on the same logbook for up to five years. However, there are certain situations where a new logbook may be required within that period.

Using a logbook that no longer reflects actual work-related travel may result in incorrect claims, either over-claiming or under-claiming deductions.

A new logbook may be required when a taxpayer:

• moves to a new home or workplace, requiring updated travel records;
• experiences a change in work duties or travel patterns, meaning their previous usage is no longer representative.

Taxpayers using the logbook method for multiple vehicles must maintain a separate logbook for each car and ensure each covers the same representative period.

If a taxpayer purchases a new vehicle during the income year and wishes to continue using a previous logbook, a written nomination must be made before lodging their tax return. This nomination must confirm:

• the replacement of the original vehicle; and
• the effective date of the change.

It is important to note that if a car is provided by an employer, or acquired through a salary sacrifice or novated lease arrangement, the taxpayer cannot claim work-related car expenses using the logbook or cents per kilometre method, as they do not own the vehicle.

When using the logbook method, taxpayers must also keep supporting records, including odometer readings at the start and end of ownership, purchase documentation, depreciation calculations, and fuel or oil receipts (or reasonable estimates based on usage).

Editor: Please contact our office if you require assistance with car expense claims, logbook requirements, or determining whether a new logbook is necessary. 

Reminder of March 2026 Quarter Superannuation Guarantee ('SG')

Employers are reminded that superannuation contributions for the quarter ending 31 March 2026 must be received by employees' super funds by Tuesday, 28 April 2026.

If super is not paid in full and on time, employers will be required to pay the Superannuation Guarantee Charge, which includes the unpaid super amount, interest and administrative penalties.

The Superannuation Guarantee rate is 12% for the 2026 income year, following the increase from 11.5% in 2025. 

When a hobby becomes a business

Taxpayers may not always recognise when a hobby or side activity has developed into a business. However, regularly earning income from these activities may mean a business is being carried on.

Generally, a business involves ongoing and repeated activities conducted with the intention of making a profit. This may include:

• regularly providing goods or services;
• obtaining and maintaining licences or permits where required; and
• maintaining records of income and expenses.

In contrast, an activity may not be considered a business where:

• transactions are occasional or one-off;
• there is no clear intention to generate profit; or
• the individual operates solely as an employee rather than independently.

Editor: Please ensure you inform us of all income-earning or side hustle activities so we can determine the correct tax treatment. 

Hybrid vehicles and FBT changes

Employers providing plug-in hybrid electric vehicles (PHEVs) to employees or their associates for private use should be aware of recent changes.

Home-charging expenses - shortcut method
The ATO has introduced an updated method to simplify the calculation of electricity costs when charging PHEVs at home. Eligible taxpayers may use this shortcut method, or alternatively calculate actual electricity costs.

Eligibility for FBT exemption
From 1 April 2025, PHEVs are no longer classified as zero or low emissions vehicles for Fringe Benefits Tax purposes. As a result, they generally no longer qualify for FBT exemption.

Employers providing PHEVs for private use may now have FBT obligations for the 2025/26 FBT year, subject to transitional rules. 

Taxable payments annual report lodgment reminder

Businesses that engage contractors for services covered under the Taxable Payments Reporting System (TPRS) may be required to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year.

Editor: This requirement commonly applies to industries such as building and construction, cleaning, and information technology.

The ATO may apply penalties to businesses that have not lodged required TPARs from 2025 or earlier years, particularly where multiple reminder notices have been issued.

If a business is not required to lodge a TPAR, it can submit a 'Non-Lodgment Advice ('NLA') form'. This form can also be used if the business no longer engages contractors. 

Expenses incurred to obtain employment were non-deductible

The Administrative Review Tribunal ('ART') recently held that medical expenses incurred by a taxpayer to obtain (or regain) employment were not deductible as they were not incurred in gaining or producing his assessable income.

The taxpayer was an airplane pilot. In July 2021, the Civil Aviation Safety Authority advised the taxpayer of the steps that he needed to take to regain the medical certificates that were a prerequisite to him holding a licence to work as a pilot

The taxpayer incurred expenses relating to this between July 2021 and May 2022, and he claimed a deduction for these expenses in his tax return for the 2022 income year.

The ATO disallowed these deductions, and the ART affirmed the ATO's decision.

The ART noted that the medical expenses incurred by the taxpayer "merely put him in a position to undertake employment as a pilot, and as such are not deductible."

That is, the expenses were not deductible because they were incurred to put the taxpayer in a position to earn income (i.e., to regain his certification), rather than in the course of earning that income, and they were therefore incurred "too soon" (despite some being incurred after his employment commenced in March 2022).