For many Australian business owners, staying compliant with tax rules can be tricky and stressful. The rules evolve, deadlines loom, and the thought of an ATO penalty can keep you up at night. But here’s the good news — it doesn’t have to be overwhelming.
At ICS, we’re dedicated to simplifying your commercial and compliance needs, and today, we’re sharing a crucial Tax Compliance Checklist for 2026 to help you stay ahead and avoid those dreaded penalties.
This isn’t just about ticking boxes; it’s about building a strong financial foundation for your business. Let’s get started and make sure your 2026 tax year runs smoothly.
1. Master Your Record-Keeping
The ATO (Australian Taxation Office) is serious about record-keeping, and so should you be. You need to keep comprehensive records of all your business transactions – income, expenses, invoices, bank statements, and more – for at least five years.
Keep Separate Finances
While it may seem straightforward, mixing business and personal finances is a frequent mistake. Always keep your business bank accounts and credit cards separate. Keeping them separate will spare you unnecessary stress in the future.
Document Everything
For every expense, ensure you have a valid record. For mixed-use expenses (like your home office), calculate and document the business portion precisely. The ATO often scrutinises these claims, so solid proof is essential.
2. Understand Your Business Activity Statement (BAS) Obligations
Your BAS is one of the most common points of contact with the ATO — and getting it right is non-negotiable.
Know Your Cycle
Generally, businesses with an annual GST turnover below $20 million lodge quarterly BAS statements. Larger businesses (over $20 million) typically report monthly. If you’ve had issues with late or incorrect GST reporting, the ATO might even switch you to monthly reporting.
GST Reconciliation
Double-check your GST collected on sales against your GST credits claimed for purchases, and verify this against your total income and expenses. Any discrepancies will raise a red flag.
Key Dates for 2026
- Q1 (July–Sep 2025): Due 28 October 2025 (or 25 November if using a tax agent)
- Q2 (Oct–Dec 2025): Due 28 February 2026
- Q3 (Jan–Mar 2026): Due 28 April 2026 (or 26 May if using a tax agent)
- Q4 (Apr–Jun 2026): Due 28 July 2026 (or 25 August if using a tax agent)
- For monthly reporters, BAS is usually due by the 21st of the month following the reporting period.
- Annual BAS (for businesses under $75,000 turnover): Due 31 October 2026, or with your tax return.
3. Navigate PAYG and Superannuation Like a Pro
If you have employees, your PAYG (Pay As You Go) withholding and superannuation obligations are critical parts of your compliance plan.
PAYG Withholding
You’re responsible for withholding tax from employee wages and remitting it to the ATO. Make sure your payroll system is correctly configured.
Superannuation Guarantee (SG)
The SG rate will be 12% from 1 July 2025, applying to all salaries and wages paid to eligible workers on or after this date.
“Payday Super” from 1 July 2026
Under this upcoming change (not yet law), employers will pay super alongside each wage payment instead of quarterly. Start preparing your cash flow and payroll systems now.
Key SG Payment Dates for 2026
- Q1: Due 28 October 2025
- Q2: Due 28 January 2026
- Q3: Due 28 April 2026
- Q4: Due 28 July 2026
Remember:Under “Payday Super” from July 2026, these will effectively become pay-cycle-aligned.
4. Maximise Deductions and Avoid Common Pitfalls
Claiming legitimate deductions can significantly reduce your tax liability, but misclaiming can lead to penalties.
Deductible Expenses
Keep clear records for all general business expenses like advertising, legal fees, insurance, rent, utilities, office supplies, and travel — ensuring they are directly linked to earning income.
Instant Asset Write-Off
Eligible small businesses (turnover under $10 million) can claim an immediate deduction for assets costing less than $20,000 until 30 June 2026.
Non-Deductible ATO Interest
From 1 July 2025, you can no longer claim tax deductions for any ATO interest charges. This change makes paying on time even more critical.
Know Your Structure
Your business structure — sole trader, partnership, company, or trust — affects your obligations and deadlines.
5. Stay Updated and Seek Professional Guidance
The tax landscape changes frequently, and staying informed is crucial.
ATO Focus Areas
Expect increased focus on cash transactions, accurate GST reporting, and compliance in professional firm profit allocations.
Data Matching
The ATO now applies sophisticated data-matching tools to detect differences between your records and external data sources.
Voluntary Disclosure
If you find a past error, self-amend and voluntarily disclose to the ATO to potentially reduce penalties.
Engage a Registered Tax Agent
A registered agent (like ICS) can help you meet deadlines, interpret complex rules, maximise deductions, and deal with the ATO when necessary. They also often have extended lodgement dates, giving you breathing room.
Final Thoughts
Managing your tax obligations doesn’t have to be overwhelming. With the right checklist, tools, and professional guidance, you can stay compliant, avoid fines, and optimise your tax position. Use this Tax Compliance Checklist as your go-to reference for the 2025–2026 year.
Need help with your tax compliance?
ICS assists Australian business owners with complete commercial and tax advisory services — from setup to ongoing compliance.
