As July approaches, many Australian business owners feel that familiar dread of End-of-Financial-Year (EOFY) payroll. It’s not just about finalising pays; it’s a minefield of legislative changes, tight deadlines, and the constant fear of costly errors.

We hear it often:

• “My payroll software is updated, but am I using it correctly?”
• “Am I missing any new rules, especially with state-specific taxes?”
• “This takes so much time away from my actual business!”
• “What happens if I get it wrong? I’ve heard about those new wage theft laws and rising insurance costs!”

You’re right to be concerned. This EOFY brings critical updates that demand your attention to avoid penalties and ensure compliance:

Federal Payroll Updates:

1. STP Finalisation (14 July 2025): Your Single Touch Payroll (STP) data needs to be finalised accurately, especially with the detailed reporting required by STP Phase 2. This marks your employees’ income statements as ‘Tax Ready’ on MyGov – a crucial step for their tax returns.
2. Super Guarantee (SG) Increase (1 July 2025): The SG rate jumps from 11.5% to 12%. Ensure your payroll system is correctly configured to apply this new rate to all wages paid on or after 1 July, regardless of the pay period.
3. Super Payment Deadlines (for Tax Deduction): To claim a tax deduction for your FY2024-25 super contributions, payments must be received and cleared by super funds by 30 June 2025. Don’t wait until the last minute – for electronic payments via clearing houses, we recommend submitting by 23 June 2025 at the latest! Missing this could mean lost tax deductions and penalties.
4. National Minimum Wage & Award Increases (1 July 2025): The National Minimum Wage increases by 3.5%, with proportional increases to Modern Award rates. Review your employee classifications and update all relevant pay rates for the first full pay period from 1 July.
5. Wage Theft Criminalisation (Effective Jan 2025): New laws mean intentional wage underpayments can lead to severe criminal penalties, including personal liability for directors. Accuracy and compliance are more critical than ever.
6. Paid Parental Leave Super (1 July 2025): While handled by the ATO, be aware that super will now be paid on government-funded Paid Parental Leave, a positive change for your team.
7. Right to Disconnect (26 August 2025 for small businesses): While not direct payroll, this new employee right impacts HR policies and expectations around out-of-hours contact, something payroll teams often touch upon.

State-Specific Considerations: Payroll Tax & Workers’ Compensation

These are where things get even more complex, with rules varying significantly by state and territory.

Payroll Tax:

If your Company is liable for Payroll Tax, (wage bill greater than $1.2m NSW) annual declarations are required by state by 28th July for NSW (although this deadline can vary by state).

• Employees in multiple states and territories – can cause Companies additional complexities as wage thresholds are reduced for interstate employees.
• Grouping Provisions: If your business is part of a group, your payroll tax obligations can be aggregated across entities, potentially bringing you over thresholds sooner.
• Pain Point: Keeping up with ever-changing state thresholds, understanding complex grouping rules, and correctly categorising taxable wages is a major challenge. Non-compliance can result in significant interest and penalties.

Workers’ Compensation:

• Premium Renewals: Annual premium renewals are here, and in NSW, for example, icare has confirmed an 8% average premium rate increase for 2025-26. Your individual premium will depend on your industry, claims history, and safety performance.
• Wage Declarations: Accurate wage declarations and estimations are crucial for calculating your premium. Under or over-declaring can lead to adjustments and potential penalties.
• Pain Point: Managing rising premiums, accurately declaring wages, understanding complex industry classifications, and staying abreast of scheme legislative changes (which directly impact claim eligibility and duration) are ongoing burdens for employers. A poor safety record directly hits your bottom line.

Navigating these intricate and ever-evolving payroll, payroll tax, and workers’ compensation requirements can be overwhelming, time-consuming, and fraught with risk. Incorrect compliance can lead to hefty fines, unhappy employees, increased insurance costs, and significant legal headaches.

Don’t let EOFY compliance keep you up at night. Proactive planning, robust internal processes, and expert guidance are your best defence.

At Stewart & Smith Advisory, we specialise in helping Australian businesses demystify payroll compliance, implement efficient systems, and ensure you meet all your obligations accurately and on time – from federal requirements to those complex state-based taxes and insurance. Let us take the stress out of your EOFY.

Is your business ready for the EOFY payroll crunch? Reach out today at info@stewartsmithadvisory.com for a proactive payroll and compliance review!