Written byEOFY means end of financial year: 30 June in Australia, along with the weeks before it when books are closed and the tax deadlines that follow.
Also known as: end of financial year, end of the financial year, financial year end, 30 June
Key points
- Assets installed ready for use by 30 June fall into this year's return, which is why the instant asset write-off drives EOFY equipment buying.
- After 30 June come the deadlines: finalising payroll through Single Touch Payroll, the June quarter activity statement and the income tax return.
- Retailers and car dealers run EOFY sales to clear stock before year end, so vehicle and equipment prices are often keenest in June.
- A deduction on an asset returns only part of its cost, at the business's tax rate; the rest is money spent.
What happens at EOFY
The financial year runs from 1 July to 30 June, and the ATO works out income tax on what happens between those dates. In the last weeks of June a business gets its records straight, counts stock, chases unpaid invoices and decides whether to bring forward or defer spending. The FBT year is different, ending on 31 March, which catches some employers out.
From 1 July the lodgements start: payroll is finalised so employees can lodge their own returns, the June quarter activity statement reports GST and PAYG, super should already have gone with every pay run under payday super, and the income tax return follows on a timetable that depends on whether you use a registered tax agent.
EOFY and equipment finance
The date matters for asset purchases because depreciation starts when an asset is first used or installed ready for use. A ute delivered on 28 June can be claimed in this year's return; one delivered on 2 July belongs to next year. Where the instant asset write-off applies, the whole cost can be deducted at once, which concentrates a lot of buying into June.
Financed assets count in exactly the same way, since on a chattel mortgage you own the asset from settlement. The catch is capacity: lenders, dealers and suppliers are all flat out in June, so an application lodged in the last week may not settle in time. Thresholds and eligibility change from year to year, so check the current ATO rules with your accountant before committing.
EOFY for individuals
For employees and sole traders, EOFY is mostly about deductions and timing. Work-related expenses, income protection premiums and personal superannuation contributions need to be paid, and received by the fund, before 30 June to count in this year's return, and the concessional contribution caps are worth checking before topping up.
It is also when the EOFY sales land. Dealers discount to hit their own year-end targets, and retailers clear stock, so a car, a laptop or a piece of home office equipment can be cheaper in June than in July. For most personal purchases the discount is the whole story; the tax side only comes in for work-related items.
Example
A cabinet maker in Newcastle has been quoting on a CNC router for months and decides to order it in the first week of June on a chattel mortgage. The broker flags that June settlements get tight and pushes the application through early; the machine is delivered and commissioned ten days before 30 June. Because it is installed ready for use in this financial year, his accountant can start the depreciation claim now and confirms the purchase fits the current write-off rules. Had it slipped into July, the claim would have waited a full year.
Not to be confused with
- Instant asset write-off
- the instant asset write-off is a tax concession that EOFY buying is often timed around, not the year end itself
Frequently asked questions
When is EOFY in Australia?
The Australian financial year runs from 1 July to 30 June, so the end of financial year is 30 June every year. The new financial year starts on 1 July, which is also when many tax, super and government charges change. The fringe benefits tax year is the exception, running from 1 April to 31 March.
Is it worth buying equipment before EOFY?
It depends on whether the business needs the equipment anyway. Buying before 30 June brings the deduction forward by a year, which helps cashflow and tax, but a deduction only returns part of the cost. Compare the June price, the finance terms and the current write-off rules, and talk to your accountant about which year the claim suits you best.
What does my business need to do at EOFY?
Get the records up to date, do a stocktake if you hold stock, reconcile the bank accounts, finalise payroll through Single Touch Payroll, lodge the June quarter activity statement, confirm super has gone with every pay run, and prepare the income tax return. The business.gov.au checklist covers the standard list; your accountant will add what applies to your structure.
Does equipment financed after 30 June still count?
It counts in the next financial year. Depreciation, and the instant asset write-off where it applies, start from the date the asset is first used or installed ready for use, not the date you ordered it or signed the finance. If the claim matters this year, the asset has to be delivered and working by 30 June.
Are EOFY sales actually cheaper?
Often, yes, because dealers and retailers are clearing stock and chasing their own year-end targets, and they know business buyers want the deduction. Run-out models and floor stock see the biggest discounts. It pays to compare against prices earlier in the year and to read any finance offer on its own terms rather than the headline discount.
Related terms
Instant asset write-off
The instant asset write-off is a tax concession that lets eligible businesses deduct the full cost of a depreciating asset in the year of first use, up to a threshold.
Read definitionDepreciation
Depreciation is the fall in an asset's value over time, spread across the years the asset is used so the cost can be claimed as a tax deduction.
Read definitionBusiness activity statement (BAS)
A business activity statement (BAS) is the form a GST-registered business lodges with the ATO, usually quarterly, to report and pay GST, PAYG withholding and PAYG instalments.
Read definitionATO
The ATO is the Australian Taxation Office, the national tax authority that collects income tax, GST and PAYG, administers superannuation rules, issues rulings and enforces compliance.
Read definitionGoods and services tax (GST)
Goods and services tax (GST) is a broad-based 10% tax on most goods and services sold in Australia, which registered businesses collect on sales and pay to the ATO.
Read definitionEquipment finance
Equipment finance is business finance used to buy or lease machinery, vehicles and other equipment, where the equipment itself secures the loan or is owned by the financier.
Read definitionGo deeper
Sources
This article is general information only and is not financial advice.