When an Australian business owner thinks “I need more money,” the first thing they search is tax.
It is the national reflex, it is genuinely useful, and it ranks seventh of nine on our profit lever hierarchy.
Worth doing properly. Worth knowing its ceiling.
Ranked by dollar impact
1. Entity structure
The largest single lever, and the one most rarely revisited.
Company, trust, partnership, sole trader — each has different rates, different distribution flexibility, different asset protection, and different consequences on sale. A structure chosen when the business turned over $180,000 is frequently wrong at $1.8m.
Restructuring has costs and CGT consequences, so this is a considered decision, not a quick one. But the annual difference is usually larger than every deduction on this page combined.
2. Timing of income and deductions
Genuinely bringing forward deductible expenditure or deferring assessable income shifts tax between years. Useful where your marginal position differs across years — a strong year followed by an expected weak one.
The constraint: it must be commercially genuine. Prepaying twelve months of a service you were going to buy anyway is legitimate. Inventing expenditure is not.
3. Superannuation contributions
Concessional contributions are deductible to the business and taxed at 15% in the fund. For an owner in a higher marginal bracket, that spread is material.
Carry-forward unused cap amounts may be available if your total super balance is under the threshold — this is one of the most under-used provisions in Australian tax, and can permit a large deductible contribution in a strong year.
4. Asset purchase timing
The $20,000 instant asset write-off for businesses under $10m turnover was announced in the 2026-27 Budget but, as verified on 8 August 2026, the enabling legislation had not passed and the standing threshold is $1,000.
Verify the current position before timing a purchase on it.
→ What is actually law
And the perennial warning: a $15,000 asset you did not need, deducted at 25%, saves $3,750 and costs $15,000. Buy things that earn their cost.
5. Loss utilisation
Company losses carried forward are subject to continuity of ownership or the similar business test. Trust losses have their own rules. Worth confirming your losses are actually available before planning around them.
6. Division 7A
If your company has lent money to you or an associate — including through a shareholder loan account — Div 7A can deem it an unfranked dividend. This catches a lot of owners who have been drawing informally.
Complying loan agreements and minimum repayments need to be in place. This is a compliance risk more than a planning opportunity, and it is expensive when missed.
7. R&D Tax Incentive
Routinely under-claimed because owners assume it means laboratories. Software development, process improvement and product development frequently qualify. Worth one conversation with a specialist to establish whether you are in scope.
FY27 specifics
GIC is no longer deductible. Since 1 July 2025, general interest charge and shortfall interest charge cannot be claimed. For a company at 25%, ATO debt at ~10.96% is equivalent to roughly 14.6% pre-tax.
→ The real cost of ATO tax debt
Superannuation is at 12% — its legislated ceiling — and Payday Super from 1 July 2026 moved contributions to every pay run. Deductibility follows payment, so the timing of your final contribution matters for which year you claim it.
Payroll tax thresholds and grouping provisions are worth reviewing annually, particularly if you operate multiple entities.
The honest framing
Tax planning changes what you keep. It does not change what you earn.
On a $1m business at 10% net margin, an excellent tax year might improve your after-tax position by $8,000 to $20,000. A 5% price rise adds $50,000 pre-tax, every year, compounding.
Do both. Just do them in the right order — and notice that most Australian business owners spend far more time on the smaller one, because it feels safer than a conversation with a customer.
Where to go next
- Instant Asset Write-Off 2026-27\n- ATO Tax Debt Is One of the Most Expensive Loans in Australia\n- Australian Business Compliance Calendar\n- Pricing for Profit
Sources: Australian Taxation Office; Treasury; 2026-27 Federal Budget. Tax is highly specific to circumstances and the rules change — this is general information only, not tax advice. Speak to a registered tax agent about your own position.