April 2026 Newsletter
Please click on the following link to view this month's newsletter for April 2026. We would like to highlight the following articles:-
Major Super Tax Changes Now Law
Parliament has passed two key Bills delivering significant changes to Australia's superannuation system. While the majority of Australians will be unaffected, those with large super balances should take note.
The new Division 296 tax, commencing 1 July 2026, introduces a two-tiered approach to earnings on superannuation balances exceeding $3 million. The existing 15% tax rate continues for earnings on balances up to $3 million; earnings on the portion between $3 million and $10 million will be taxed at an effective 30% rate; and earnings above $10 million will face a 40% effective tax rate. These thresholds will be indexed to CPI, and the tax applies only to future realised earnings — not unrealised capital gains on unsold assets. For the first year, liability will be determined based on your total super balance at 30 June 2027.
Also passing into law are changes to how total superannuation balances are calculated, applying from 1 July 2026 across all tax purposes where a total super balance is relevant. From 1 July 2027, the Low Income Superannuation Tax Offset (LISTO) will also increase, with the maximum rising from $500 to $810 and the eligibility threshold lifting from $37,000 to $45,000. If you hold a large superannuation balance, the window before 30 June 2027 provides time to consider your options — we encourage you to contact our office to discuss your circumstances.
STP Penalties Are Under the ATO's Microscope
Single Touch Payroll (STP) reporting is now a critical, real-time data source used across the tax and super systems — and the ATO has signalled a firmer approach to penalties where reporting is late, incomplete, incorrect or in the wrong format.
Employers are required to report payroll information through STP-enabled software on or before each payday, and to lodge an end-of-year finalisation declaration by 14 July each year. Employers who have not yet transitioned to STP Phase 2 and are not covered by a deferral or exemption may be subject to failure to lodge penalties. The ATO has specifically identified incorrect format reporting as an issue that reduces the effectiveness of event-based reporting.
To stay on the right side of these obligations, treat STP as a live compliance requirement — not an end-of-year task. Reconcile your payroll regularly against your STP year-to-date figures and BAS reporting, and address any errors early. If your business's payroll records, STP reporting and super payments don't align, this can create issues both for ATO compliance activity and for what your employees see in myGov. If you are experiencing difficulty meeting your obligations, please contact us as soon as possible.
Please do not hesitate to contact us if you have any queries in relation to your tax and accounting matters.
Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.