Why EOFY preparation starts well before June
The Australian financial year ends on 30 June. Most of the decisions that affect your tax position for the year have to be made before that date, not after. Once July arrives you are recording history, not shaping it.
Good EOFY preparation has two halves. The first is housekeeping: records, reconciliations and obligations. The second is planning: looking at the likely result for the year and deciding whether anything should change before it closes.
Owners who only do the first half lodge on time and still leave options on the table. Owners who do both tend to have smaller surprises, calmer accountants and a clearer picture heading into the new year.
Get the records straight
Clean records make everything else faster and cheaper. They also matter beyond tax: lenders, buyers and investors all read your books, and a messy year end is visible for a long time afterwards.
Start with the bank. If every account in Xero is reconciled to the statement, most of the remaining work is explaining what is already there rather than hunting for what is missing. Then move through the balance sheet line by line.
Loans between a company and its shareholders or their associates have their own rules under the ATO's current framework, so make sure any such balances are documented and being dealt with properly rather than sitting unexplained.
- Reconcile every bank, credit card and loan account
- Chase missing invoices, receipts and supplier statements
- Review debtors and deal with amounts that are genuinely not recoverable
- Review creditors and accruals so expenses land in the right year
- Count stock and identify anything obsolete or damaged
- Update the asset register and remove assets that have been sold or scrapped
- Separate personal spending from business spending
- Document any loans to or from directors, shareholders or related entities
Tax planning questions to ask before 30 June
With the records straight, you can estimate the year's result and ask whether anything should move. Timing is the common theme. A decision made on 29 June and the same decision made on 2 July can land in different financial years.
Each of the questions below depends on the ATO's current rules and on your structure. A company, a trust and a sole trader each have different levers. None of these are automatic wins, and some only make sense if the cash is there and the business need is real.
The goal is not to spend money to save tax. It is to make sure decisions you were going to make anyway happen on the right side of the date, and to avoid being caught by deadlines that cannot be undone.
- Timing of income and expenses: what is genuinely incurred or derived this year?
- Prepayments: where the rules allow, some expenses can be brought forward
- Superannuation: contributions generally count in the year the fund receives them, not the year they are paid
- Asset purchases: how do the current depreciation rules treat something bought and installed before 30 June?
- Trust distributions: trustee resolutions generally need to be made by 30 June, and documented
- Dividends and franking: is the company's position right for what shareholders need this year?
- Capital gains and losses: are there disposals that could sensibly fall either side of the date?
Payroll, super and the obligations with hard deadlines
Some EOFY tasks have fixed dates and penalties attached. If you have staff, this list is not optional. Diarise it, assign it to someone, and check it is done.
Single Touch Payroll finalisation tells the ATO that your payroll data for the year is complete, so employees can lodge their own returns. Superannuation guarantee has quarterly due dates set by the ATO, and paying late has consequences beyond the amount itself.
Some obligations run on a different calendar. The fringe benefits tax year ends on 31 March, not 30 June. Businesses in certain industries, including building and construction, may need to report payments to contractors. Queensland employers above the state's payroll tax threshold have their own lodgement cycle.
- STP finalisation declaration after year end
- Superannuation guarantee for the June quarter, paid by the ATO's due date
- PAYG withholding reconciled to what was reported through STP
- Final BAS for the June quarter
- Taxable payments annual report, if your industry requires it
- Queensland payroll tax annual return, if you are registered
- Fringe benefits tax return, if applicable, on its own 31 March year
Use EOFY as a structure and strategy checkpoint
EOFY is a natural moment for the bigger questions. Is the structure still right? Has the business outgrown a sole trader or single company setup? Are profits sitting where you want them? Is a restructure, a new entity or a holding company worth considering for next year?
These are not June tasks. They are decisions best taken with a full year of numbers in front of you and a full year ahead to implement them. The worst time to restructure is the last week of June. The best time is July, once the dust has settled and the plan is clear.
The same goes for budgets and forecasts. A new financial year is a clean start for a cash flow forecast, and a forecast built in July is far more useful than one built in a panic in May.
The EOFY checklist
Here is the whole thing in one place. Work through it from the top. The earlier you start, the more of the planning items are still live options rather than missed ones.
This is general information, not advice. The ATO's current rules and your own structure apply, and your accountant should be in the loop before you act on any of the planning items.
- Reconcile all accounts and tidy the balance sheet
- Estimate the year's result and review it with your accountant before 30 June
- Decide on timing questions: expenses, super, assets, distributions, dividends
- Finalise STP and pay super by the due dates
- Lodge the June BAS and any state or industry reports
- Review your structure and set up next year's forecast in July
Questions we get asked
When should I start preparing for end of financial year?
Housekeeping can run all year if your bookkeeping is kept current, which is the easiest way to make June painless. The planning conversation is best held a couple of months before 30 June, once there is enough of the year on the books to estimate the result. Starting in the last week of June leaves very few options open.
What records do I need for my business tax return?
Reconciled bank, credit card and loan accounts, sales and purchase records, payroll and super records, a stock count where relevant, an up-to-date asset register, and documentation for anything unusual such as loans to or from related parties, new entities or asset sales. If it is all in Xero and reconciled, most of the return is already there.
Can I claim expenses I pay in June?
Generally, a business expense is deductible in the year it is incurred, and paying for something you genuinely need before 30 June can bring it into the current year. The rules differ for prepayments, capital items and some specific categories, so check with your accountant before buying something purely for the timing. The business need should come first.
Do I need to pay super before 30 June?
Superannuation guarantee has quarterly due dates set by the ATO, and the June quarter is not due until after year end. However, contributions generally only count as a deduction in the year the super fund receives them. If you want the June quarter in this year's figures, it has to reach the fund before 30 June, and clearing houses take time.
What is STP finalisation?
Single Touch Payroll finalisation is the declaration an employer makes to the ATO after year end confirming that the payroll information reported during the year is complete and correct. Once it is done, employees see their income statement as tax-ready and can lodge their own returns. It replaces the old payment summary process and has its own deadline.
Should I buy equipment before 30 June to save tax?
Only if the business needs it. The current depreciation rules can affect how quickly a purchase is deducted, and timing can matter, but spending money you do not have on something you do not need is not tax planning. Where a purchase is already planned, talk to your accountant about whether having it installed before 30 June changes the outcome.
