What the New Financial Year Means for Your Equipment and Finance Decisions

The EOFY rush is done. In two days, three changes kick in that affect how you finance, hire, and manage cash flow for the next twelve months. Most business owners haven't properly costed them yet.

The instant asset write-off is now permanent

The $20,000 instant asset write-off has been extended on a temporary basis, year after year, for the better part of a decade. From 1 July 2026, it's permanent for businesses with a turnover under $10 million.

That's good news for planning. You no longer need to rush a purchase before June 30 to guarantee the deduction. You can buy when the asset makes business sense, not when the tax calendar forces your hand.

But $20,000 is a low threshold. A decent second-hand ute starts around $35,000. A mid-size excavator, $80,000 and up. A commercial kitchen fit-out, $50,000 or more. Anything above $20,000 goes into the general depreciation pool at 15% in the first year and 30% after that, rather than being written off in full.

What this means in practice: if you're buying a $60,000 piece of equipment, your first-year depreciation deduction is $9,000 (15% of $60,000), not the full amount. The rest flows through over subsequent years. That changes the short-term cash flow equation, and it makes the finance structure you choose (chattel mortgage, finance lease, hire purchase) more important than ever, because matching your repayments to your deduction timing keeps cash flow predictable.

Payday super changes the cash flow maths

This is the change most business owners haven't properly costed yet. From 1 July, super contributions will be due within seven business days of each payday. Not quarterly. Not 28 days after the quarter ends. Seven business days from the day you run payroll.

Here's what that looks like for a business with five staff on an average of $70,000 each.

Under the old system, you accumulated about $10,500 in super per quarter. That money sat in your business account for up to three months before it was due. It wasn't yours to spend, but it was working capital your cash flow relied on.

Under payday super, if you pay fortnightly, each pay run triggers a super payment of roughly $1,615, due within seven business days. That's six or seven payments per quarter instead of one lump sum. If you pay monthly, it's three payments of about $3,500.

The total cost is identical. But the timing changes everything. The float you had, that buffer of $5,000 to $10,000 sitting in your account across a quarter, is gone. For businesses already running lean, that's the equivalent of losing a small line of credit.

If your business relies on that cash flow cushion (and most small businesses do, even if they don't think of it that way), this is the trigger to look at a formal working capital facility. A line of credit or overdraft replaces that buffer with something you actually control, rather than relying on deferred super obligations.

There are also penalties for late payment under the new system. Miss the seven-day window and you're liable for the super guarantee charge, which includes a nominal interest component and is not tax deductible. Given the scale of the change, expect the ATO to take a hard line on late payments from day one.

Labour costs jump on Tuesday. Think about what that means for equipment.

The national minimum wage increases 5.97% to $26.44 per hour on 1 July. Modern award rates rise 4.75%, affecting 2.8 million workers. For businesses in construction, transport, hospitality, or trades, where wages are the single biggest line item, this is a material cost increase.

This isn't a reason to panic. But it is a reason to think about productivity. If your team's hourly cost is about to go up 5%, the question becomes: can better equipment help them produce more per hour?

A $120,000 excavator that lets a two-person crew do the work of three doesn't just save on the cost of a third hire (now around $65,000 to $80,000 a year including super, leave, and workers' comp). It changes the unit economics of every job you quote.

That's not a tax play. It's an operational decision that happens to have a finance component. And it's the kind of decision that's worth modelling properly before you commit, not after.

What to do in Q1 of the new financial year

Recalculate your payroll cash flow. Map out your actual super outflows under the new payday rules for the next quarter. If the gap between your old quarterly payment timing and the new per-payroll timing creates a shortfall, address it now, not when the first payment is overdue.

Review your existing finance structures. If you have equipment loans with balloon payments coming due in the next 12 months, the new write-off permanence means you're not under pressure to roll into a new purchase just for the deduction. You can refinance the balloon, sell the asset, or upgrade on your terms.

Model equipment purchases against the new labour costs. Before approving a hire, run the numbers on what the same output would cost with equipment finance instead. Include the depreciation deduction, the interest deduction, and the avoided employment costs. If the equipment wins, the best time to act is Q1 while your cash position is clearest.

If you're weighing up your options, Emu Money's finance specialists can compare structures across 50+ lenders and help you find the right fit for your business. Compare equipment finance options.