As we move through the 2026 financial year, it’s important to keep up with tax changes and government incentives. Here are five important tax breaks or upcoming changes worth knowing for 2026:
1. Instant Asset Write-Off Extension Until 30 June 2026
The $20,000 per asset instant asset write-off, which allows immediate deductions for eligible purchases, has been extended through to 30 June 2026.
If you’ve been considering upgrades or replacements, acting before 30 June 2026 lets you unlock full tax deductions now, improving cash flow and lowering tax in FY 2025–26. Best to contact your Melbourne business accountant who can calculate the tax savings when making a purchase.
2. Personal Income Tax Cuts Starting 1 July 2026
From 1 July 2026, Australia will see a reduction in the marginal tax rate for incomes between $18,201 and $45,000—from 16% down to 15%. For sole traders or small business owners paying themselves a salary, this translates to noticeable—and compounding—tax savings. Again, do not hesitate to contact a tax accountant Melbourne, like Nobel Thomas, who can outline the tax savings over the long term.
3. Extended Energy Bill Relief—$150 Rebates
Eligible small businesses will continue to benefit from energy bill relief, with up to $150 in rebates automatically applied during the September and December quarters of 2025. This relief offers immediate savings and improved cash flow during leaner months.
4. R&D Tax Incentive Continues
The Research and Development (R&D) Tax Incentive remains in effect throughout 2026, offering generous tax offsets: 43.5% refundable for businesses with aggregated turnover below $20M, and 38.5% non-refundable for larger ones. Claims must be submitted within 10 months after the end of your income year.
Other than creating a new product or service, your business can be eligible if it engages in qualifying innovation or development activities—e.g. refining products or improving processes. Best to contact Nobel Thomas, or your local Melbourne business accountant, who can assist with your R & D claims.
5. Tax Cuts for Individuals Boost Solo Entrepreneurs
Beyond 2026, further reductions in the low-income tax rate continue into July 2027, bringing it down to 14%. This effectively reduces the tax burden on sole traders and small business owners operating under that bracket. Lower personal tax rates means more take-home income.
Tips for Small Business Owners
- Time your investments: Make asset purchases by 30 June 2026 to capitalize on the 2026 write-off.
- Plan for salary sale benefit: Structure self-employed income, with the help of a tax accountant Melbourne, to harness upcoming personal tax cuts.
- Check eligibility for rebates: Confirm with your energy provider to ensure you’re receiving energy bill rebates automatically.
- Keep R&D records: Maintain thorough documentation to maximize R&D claims. A Melbourne business accountant, like Nobel Thomas, can assist.
- Stay informed: Watch for potential new reforms—there’s ongoing discussion around small business tax cuts and structural changes. For example, there have been proposals to reduce the small business company tax rate to 20%.
If you have any questions, Nobel Thomas is only a phone call away.
