End of Financial Year (EOFY) 2024 - Everything you need to know

As the calendar year progresses, individuals and businesses across Australia consider the implications of the end of the financial year (EOFY). This period signifies more than just the close of the accounting books; it marks a strategic time for financial review, tax preparation, and business planning. For many, EOFY is synonymous with tax returns, but it also provides an opportunity to assess financial health and make informed decisions for the upcoming year. 

The EOFY is a compliance matter and a time to maximise tax deductions and use EOFY sales to bolster business operations. For individuals, the focus shifts to lodging tax returns, digging into deductions, and superannuation contributions. 

Key takeaways 

• The Australian financial year (AFY) is a strategic period. Beyond tax compliance, the AFY (1 July—30 June) is a crucial time for financial reflection and planning. Businesses assess their financial health and growth strategies and optimise tax outcomes. Individuals focus on maximising deductions and ensuring accurate income reporting in their tax returns.
• Preparation is key to EOFY's success. Accurate record-keeping throughout the year is essential. Businesses must consolidate financial records and prepare accurate financial statements (profit and loss, balance sheet). Individuals need to gather documentation for deductions and ensure all income sources are reported.
• EOFY presents opportunities and risks. Businesses can leverage EOFY sales to reduce old stock and invest in new assets, while individuals can maximise tax deductions and superannuation contributions. However, it's also a time of heightened vulnerability to scams and fraud, requiring vigilance and adherence to ATO guidelines.

Click here for your End of Financial Year Business Tax Checklist

Understanding the financial year in Australia 

The financial year in Australia, often referred to as the 'tax year', differs from the calendar year. It starts on 1 July and concludes on 30 June the following year. Australian individuals, businesses, and other entities base their tax reporting and financial planning on this time frame. 

During the EOFY, they finalise their accounts, prepare tax documents, and strategise for the year ahead. The Australian Taxation Office (ATO) requires the lodgement of tax returns during this period, during which taxpayers must report their income and claim any deductions to which they are entitled. 

Australian tax year calendar for businesses with employees

This interactive calendar highlights key tax deadlines for businesses with employees in Australia. Remember, the financial year runs from July 1st (one year) to June 30th (the following year).

Key Dates by Month (May 2024 - June 2025)

May

• 15th:
  • Company income tax returns due
  • Partnership & Trust income tax returns due
  • Individual tax returns due (if using a registered tax agent)
• 21st:
  • Lodge and pay April BAS (monthly lodgers)
• 21st (or 28th): Fringe benefits tax return due (paper or electronic filing)

July

• 1st: Individual income tax return lodgement period begins (until October 31st)
• 14th: Employers must issue PAYG withholding payment summaries to employees
• 21st: Lodge and pay June BAS (monthly lodgers)
• 28th:
  • Lodge and pay Q4 (April-June) BAS (quarterly lodgers)
  • Super guarantee contributions for Q4 (April-June) due

Ongoing Dates (by Month)

• Monthly: Lodge and pay BAS (if applicable) on the designated due date (21st of the following month)
• Quarterly: Lodge and pay BAS (if applicable) and make super guarantee contributions on the designated due dates (28th of the relevant quarter - April, July, October, January)

Additional Notes

• The Fringe Benefits Tax year runs from April 1 to March 31.
• This is a general guide, and specific deadlines may vary depending on your business circumstances.
• Refer to the Australian Taxation Office (ATO) website for more information and resources.

What key tasks should be completed for EOFY closing procedures? 

Ensure accurate & up-to-date financial records

• Maintain a robust bookkeeping system: This can be a physical ledger, spreadsheet, or accounting software. Choose a method that suits your business size and comfort level.
• Track income and expenses meticulously: Record all business income (sales, fees, etc.) and expenses (rent, salaries, supplies, etc.) throughout the year.
• Categorise transactions accurately: Use consistent categories to organise your income and expenses for easy reporting and tax preparation.
• Reconcile bank statements regularly: Ensure your bank statements match your internal records to identify and rectify any discrepancies.
• Maintain payroll records: Keep detailed records of employee salaries, wages, taxes withheld, and superannuation contributions.
• Use technology for efficiency: Explore AI-powered accounting software that integrates with your bank accounts. This automates data entry, reduces errors, saves time, and generates reports for tax purposes. Many accounting software options cater to businesses of all sizes and budgets.

Complete and submit yearly tax returns

• Gather documents. Collect income statements, receipts, PAYG summaries, and super contributions records.
• Choose your method. Lodge online, use a registered tax agent, or submit paper forms (online is preferred).
• Know your obligations. Understand relevant deductions and offsets on the ATO website: https://www.ato.gov.au/
• Meet deadlines. Refer to the calendar for company, partnership/trust, and individual tax return due dates. Late filing can incur penalties.

Plan your financial future

• Analyse performance. Review income statements and balance sheets to assess your business's health.
• Evaluate tax impact. Consider how future decisions might affect your tax liability. Research potential tax benefits.
• Set financial goals. Define your goals for the new year (e.g., increase revenue, reduce expenses, save for investment).
• Develop a plan. Create a roadmap to achieve your goals, including budgeting, exploring new revenue streams, and implementing tax-saving strategies.
• Adapt and monitor. Regularly review your progress and adjust your plan as circumstances change or new opportunities arise.

What are the financial records you need to prepare?

Companies should start by consolidating their financial records, ensuring all transactions are correctly recorded and categorised. This step is crucial for the preparation of the Business Activity Statement (BAS) and the business tax return. 

Profit and Loss Statements 
‍Creating a profit and loss statement is a fundamental task that gives insights into the financial performance over the past year. It should detail revenue and expenses, thus reflecting the company's profitability. 

Balance sheet
‍The balance sheet provides a snapshot of a company's financial standing at the EOFY, including assets, liabilities, and equity. It is essential to understand the company's net worth and financial stability. 

Individual tax returns 
‍At the conclusion of the financial year, individuals in Australia prepare and lodge their income tax returns. This activity is crucial for accurately reporting income and claiming legitimate deductions to ensure compliance and optimise lawful tax outcomes. 

Income reporting 
‍Individuals must meticulously report all forms of income received during the financial year. This includes, but is not limited to, wages, salaries, commissions, and income from investments. Accurate records such as payslips and financial statements are indispensable in this process. 

End-of-year tax strategies 

As the financial year wraps up, small businesses should have clear strategies to manage taxation efficiently. Deductions are critical in reducing taxable income; thus, businesses must ensure all allowable expenses are well-documented. 

Capitalising on the instant asset write-off scheme lets businesses immediately deduct the business portion of most assets if they cost less than the threshold, provided they were used or installed ready for use in the relevant income year. 

Tax strategies to consider: 

• Immediate deductions for business expenses such as office supplies, professional consultations, and business travel. 
• Prepaying expenses like rent or insurance can provide a tax advantage for the current year. 
• Instant asset write-off: For eligible assets, understanding the threshold and timing is critical. 
• Stocktake: Assessing inventory for obsolete stock can lead to additional deductions.
• Ensure that employee super contributions are correctly calculated and paid and that PAYG summaries reflect accurate withholding amounts. 

Take note:

Employers are obligated to make super guarantee contributions to their eligible employees' superannuation funds. For the 2023-24 financial year, the mandatory contribution rate is set at 11%% of an employee's ordinary earnings. It's paramount that employers contribute at least this percentage to avoid the Superannuation Guarantee Charge. 

NOTE: This figure is for FY23-24 and goes up to 11.5% on 1 July 2024.

• Contribution Deadlines: Payments must be made by quarterly due dates to qualify for tax deductions. 
• Caps on Contributions: The cap for concessional (before-tax) contributions is $27,500. 
• Single Touch Payroll (STP): Employers are required to report contributions via STP to the Australian Taxation Office (ATO), ensuring real-time compliance.

How to stay organised and compliant with Thriday this EOFY?

Conquer tax season with confidence. Thriday's intuitive features empower you to track every transaction effortlessly, ensuring your financial records are accurate and ready for stress-free tax reporting.

Track expenses in a snap
‍No more panicking before EOFY with Thriday. It easily categorises expenses, scans receipts, and generates real-time reports, ensuring you're always controlling your finances and preparing for tax time.

Reconcile bank statements effortlessly.
There is no need to worry about manual data entry or missing receipts, especially during the EOFY rush. Thriday's $0 monthly access fee business banking* automatically categorises transactions and matches them to your bank statements, saving you time and ensuring accuracy. 

Tax reporting made easier.
Make tax time your relax time with Thriday’s real-time, automated cash flow and tax forecasts. Take advantage of comprehensive reports like income statements, cash flow and balance sheets.

Online tools and resources 

An array of online tools and resources is available to facilitate a smooth and compliant transition. These tools offer distinct advantages for both individuals and businesses, providing clarity and efficiency to the often complex financial processes. 

One essential resource is the ATO website. It provides a comprehensive suite of tools designed to assist with tax calculations, deductions, and lodgements. The ATO offers easy-to-use tax calculators, guides for proper record-keeping, and access to the latest tax rates and legal considerations. 

Website: https://www.ato.gov.au/

Other credible sources for EOFY information

Besides the ATO website, other government websites, like the Australian Securities and Investments Commission (ASIC) and the Fair Work Ombudsman, may offer relevant information on compliance and reporting requirements.

Thriday has a wealth of resources to support you during EOFY and beyond. Our blog features articles and guides on a range of financial topics, and our glossary provides clear explanations of key terms. Our online community is a great place to connect with other business owners, share tips, and get advice.

Thriday blog: https://www.thriday.com.au/blog

Thriday glossary: https://www.thriday.com.au/glossary

Thriday’s online community: https://thriday.circle.so/home 

End of Financial Year Sales 

The end of the financial year (EOFY) in Australia brings a flurry of sales and promotions. Consumers can capitalise on substantial discounts across many sectors, including technology and appliances. 

Making the most of EOFY offers 

Making the most of EOFY offers requires a strategic approach. Shoppers should prepare by listing what they need versus what they want, setting a budget, and researching before sales. Most significantly, one should verify the authenticity of sales to ensure they are getting a true bargain. 

• Research: Before EOFY, familiarise yourself with the regular prices of desired items to spot genuine deals. 
• Budget: It's essential to set an affordable budget to avoid overspending despite the allure of discounts. 
• Quality vs. Price: A low price sometimes guarantees quality. Assess the value of each item beyond its sale price. 
• Choice: Consumer groups like CHOICE often provide EOFY shopping tips and information on consumer rights. 
• Timing: While early sales can lead to significant savings, last-minute deals may also emerge as retailers clear stock. 

With demand peaking during the EOFY period, one can expect heavy price reductions on last year's stock, particularly in tech and home appliances. 

Technology retailers, such as JB Hi-Fi, host noteworthy EOFY sales, presenting an opportunity to purchase high-end gadgets at reduced prices. Similarly, home appliance deals are prevalent, with outlets like The Good Guys offering promotions on a variety of household items. However, it remains crucial for consumers to discern sales fact from fiction, ensuring savings are genuine. 

Security and fraud prevention 

With the end of the financial year (EOFY) approaching, businesses must prioritise security measures and be vigilant of fraud attempts. Strengthening online systems against scams and ensuring collaboration with insurance entities to adhere to Australian Taxation Office (ATO) guidelines are crucial. 

Scams to avoid 

Phishing emails
‍Businesses should be alerted to emails impersonating the ATO or financial institutions. These often attempt to steal confidential information. 

How to prevent: Verify email origins and avoid clicking on suspicious links. 

Invoice Scams
‍Scammers may send fake invoices that seem legitimate. This can lead to improper financial transactions. 

Protection: Confirm the authenticity of invoices with the sender before processing payments. 

Identity theft 
Personal and commercial identities are at risk during EOFY due to increased financial activity. 

How to prevent: Secure personal information and conduct regular credit checks. 

Investment scams
‍Offers promising high returns with low risk can be deceptive and lead to significant financial loss. 

How to prevent: Investigate the legitimacy of investment offers through verified channels. 

Insurance companies can provide specific policies to cover fraud-related losses, a valuable consideration for mitigating potential financial damages.

Businesses should establish strong security protocols and educate their employees about recognising and reporting scams. This collective awareness and preparedness are critical to a secured EOFY. 

Frequently asked questions 

The end of the financial year (EOFY) requires astute preparation and understanding of critical dates, tax obligations, necessary procedures, potential deductions, superannuation considerations, and record-keeping requirements. 

What are the important dates for EOFY preparation? 
The Australian EOFY starts on 1 July and concludes on 30 June the following year. Our key tax dates above include when businesses must have all their documentation for tax filing and reporting purposes. 

How does the financial year structure affect annual tax obligations? 
In Australia, the financial year runs from 1 July to 30 June. During this period, businesses and individuals must track their income and expenses because these records determine the tax they are obligated to pay or the return they are due. 

What key tasks should be completed for EOFY closing procedures?
‍Businesses should complete bookkeeping, ensure all financial statements are up to date, reconcile bank accounts, and prepare financial reports as part of EOFY closing procedures. 

Which deductions should be reviewed prior to the EOFY? 
Prior to the EOFY, all potential deductions, including business expenses, home office costs, and asset depreciation, should be reviewed to ensure that all allowable deductions are claimed to reduce taxable income. 

How does the EOFY impact superannuation contributions and limits? 
The EOFY is a significant time for assessing superannuation contributions to ensure they are within the contribution limits and that any additional contributions are made by the cutoff date to count for the current fiscal year. 

What records must businesses retain for EOFY compliance? 
Businesses in Australia must retain financial records, including receipts, invoices, payment records, and bank statements, for five years for EOFY compliance purposes.