Whether your business operates from Sydney, Melbourne, Brisbane, Perth, Adelaide or elsewhere in Australia, today’s tax update has several practical compliance points to review.
The ATO has published its latest R&D tax incentive transparency report. Payday Super is creating cash-flow pressure for many SMEs. New analysis has examined the future impact of CGT and negative gearing reforms. Software royalty arrangements also remain under scrutiny.
Here is what Australian businesses need to know on Wednesday, 23 September 2026.
Review your R&D records as the ATO makes claims more visible
The ATO has published its annual R&D tax incentive transparency report for the 2023–24 income year.
More than 13,400 companies claimed the incentive, covering almost $17 billion in qualifying R&D expenditure. The claimant breakdown was:
- 51% small businesses.
- 31% privately owned and wealthy groups.
- 18% public and multinational groups.
The report is published under a legal requirement in the Taxation Administration Act 1953. Its purpose is to improve transparency, public accountability and voluntary compliance.
The practical message is straightforward: R&D claims are now more visible.
The ATO uses review and audit systems to test whether claims meet the relevant eligibility and substantiation requirements. This means your claim should be supported by clear evidence, not only a year-end calculation.
Make your R&D claim audit-ready
Review these records now:
- Eligible activities: document the technical uncertainty, experimentation and outcomes connected with each activity.
- Project records: retain development plans, testing notes, prototypes, technical reports and staff records.
- Expenditure evidence: reconcile payroll, contractor, materials and other eligible costs to your accounting records.
- Apportionment workings: explain how shared costs, software, premises and staff time were allocated.
- Registration and claim consistency: make sure the information submitted to the Department of Industry, Science and Resources aligns with the tax claim lodged with the ATO.
The Treasury consultation on better targeting the R&D Tax Incentive closes on 28 September 2026. The report and the consultation make this a sensible time to review your documentation before future claims are prepared.
Prepare for Payday Super cash-flow pressure
Payday Super began on 1 July 2026. Under the new framework, employers must ensure superannuation guarantee contributions are received by the employee’s super fund within seven business days after payday, with enough information for the fund to allocate the contribution.
The ATO’s Payday Super guidance confirms that this is a timing change. It does not increase the underlying superannuation rate.
However, the cash leaves your business earlier and more frequently than under the previous quarterly payment cycle.
Recent SME reporting indicates that around three-quarters of small and medium businesses are experiencing cash-flow impacts. Many businesses were not fully prepared for the transition, with July acting as a particular pressure point.
This can affect ecommerce brands, digital agencies, SaaS businesses, retailers and other employers with weekly or fortnightly payrolls. A business may be profitable but still experience a liquidity gap when customer receipts arrive later than payroll and super payments.
Protect working capital with a Payday Super checklist
Use the following process for every pay cycle:
- Create a separate super cash reserve. Transferring the expected obligation into a dedicated account helps prevent the funds being used for inventory, suppliers or operating costs.
- Map the payment timetable. Record payday, clearing time, fund receipt and allocation dates. Add a buffer for weekends, public holidays and rejected payments.
- Monitor rejected transactions daily. A rejected payment can create a compliance issue if it is not corrected quickly.
- Forecast at least 13 weeks ahead. Include wages, super, GST, supplier payments, loan repayments and expected customer receipts.
- Compare payroll timing with customer collections. This will show whether the pressure is temporary or caused by a wider working-capital problem.
- Keep payroll data accurate. Incorrect employee details or fund information can delay allocation and create avoidable follow-up work.
Do not wait for the quarterly BAS or year-end accounts to reveal a problem. Ongoing bookkeeping and payroll reconciliation will show whether each payment has been processed, received and allocated.
Treat CGT and negative gearing reforms as future compliance dates
New analysis published today has examined how the legislated CGT and negative gearing changes may affect investors.
The ABC analysis reports that 43% of analysed housing investments could pay less tax under the changes, while 53% could pay more overall. A separate analysis suggests that around half of property investors may pay more tax.
These findings are not uniform. The result will depend on the investment, ownership structure, income position, acquisition date and future disposal circumstances.
The reforms are legislated to start on 1 July 2027. They are not in force for current 2025–26 returns. No filing position should be changed based only on media analysis.
For compliance purposes, you should:
- Record the proposed start date in your tax calendar.
- Keep acquisition, ownership and financing records organised.
- Review how trusts, companies and other structures may be affected when further official guidance is available.
- Continue applying the current rules to current reporting periods unless the ATO or legislation states otherwise.
This is a monitoring item, not a reason to take immediate investment action.
Monitor the proposed super changes for workers under 18
The Superannuation Legislation Amendment (Fair Super for Young Workers) Bill 2026 is currently before the Senate Economics Legislation Committee.
The committee is due to report on 17 November 2026. The Financial Services Council and Business Council of Australia have called for a delay and further Treasury consultation.
For employers with junior, casual or seasonal staff, the key point is simple: this is a proposal, not law.
Do not change your payroll settings solely because the Bill is under review. Instead:
- Monitor the committee process.
- Keep junior employee records accurate.
- Ask your payroll provider how legislative changes will be implemented if the Bill passes.
- Wait for Royal Assent and a confirmed start date before changing your payroll systems.
This approach avoids unnecessary rework and keeps your payroll records consistent with the law currently in force.
Review software royalty arrangements before year-end
Software royalty arrangements remain an ATO focus area.
The ATO has previously issued guidance on arrangements where Australian customers pay for the right to use software owned by a related offshore entity. The key issue is whether the payments are royalties that may be subject to Australian royalty withholding.
This can affect:
- Australian businesses that pay a related offshore entity for software or licence rights.
- SaaS businesses and technology groups with cross-border arrangements.
- Businesses that have restructured intellectual property ownership offshore.
The ATO has identified arrangements where the royalty characterisation of payments was not adequately considered or documented. Under the Income Tax Assessment Act 1936 and Australia’s tax treaties, a royalty paid to a non-resident may be subject to withholding tax unless a specific exemption or treaty rate applies.
The practical compliance actions are:
- Review agreements with related offshore entities to confirm how payments are characterised.
- Check whether withholding tax has been applied at the correct rate.
- Retain transfer pricing documentation that supports the arrangement.
- Consider voluntary disclosure if you identify a past underpayment, as this may reduce penalties.
This is not a new rule, but it remains an active ATO review area. Arrangements that have been in place for several years may still be reviewed.
Software, super and substantiation remain the key focus areas
The common thread across today’s updates is documentation and timing.
For R&D claims, the ATO has made the claimant population more visible. For Payday Super, the compliance obligation is now more frequent and time-sensitive. For CGT and negative gearing, the changes are legislated but not yet in force. For the under-18 super proposal, no action is required until the law passes. For software royalties, the focus is on correct characterisation and withholding.
There are also two near-term dates to note: the Treasury R&D consultation closes on 28 September 2026, and the Senate committee report on the Fair Super for Young Workers Bill is due on 17 November 2026.
For current reporting periods, continue applying the law as it stands. For future periods, keep your records organised and monitor official guidance.
If you need assistance with any of these areas, contact your registered tax agent or adviser. The information in this update is general in nature and should not be relied on as tax advice for your specific circumstances.
