Federal budget 2025–26: What small businesses need to know

Tax changes

Instant asset write-off

The $20,000 instant asset write-off will end on 30 June 2025. After that, it drops back to $1,000 unless new laws are passed. If you need to buy equipment, it might be smart to get it before the end of this financial year.

Company tax rate

The company tax rate for small businesses stays at 25%.

Personal income tax cuts

From 1 July 2026, personal income tax will go down. If you’re a sole trader or pay yourself through the business, you’ll pay 1% less tax. A year later, it drops another 1%.

Power bill relief

Electricity rebate

Small businesses will get $150 off their power bills – two $75 credits – by the end of 2025. It’ll show up on your bill automatically if you're eligible.

Energy efficiency grants

You can also apply for grants (up to $25,000) to upgrade your equipment and cut energy use.

Employment law changes

Non-compete clauses banned

If your staff earn less than $175,000, you won't be able to use non-compete clauses in their contracts. These clauses stop people from working for a competitor after they leave. They’ll be banned.

Wage-fixing and no-poach rules

You also can’t make wage-fixing or no-poach deals with other businesses. These are now illegal.

Compliance and red tape

ATO crackdowns

The ATO is getting A LOT more funding to crack down on dodgy behaviour, like underreporting income or not paying super. Keep your records clean.

Now might be a goo time to get that Audit protection insurance in place.

Phoenixing in construction

Phoenixing (shutting a business to avoid debts, then starting fresh) will be targeted, especially in construction.

Franchisee protections

Franchisees get more protection. The ACCC will crack down on unfair contracts and dodgy franchisors.

Unfair trading rules

Unfair trading laws may soon be extended to protect small businesses, not just consumers.

Support for specific industries

Help for hospitality and brewers

The excise on draught beer will be frozen for two years. That helps pubs and brewers. Also, the tax rebate cap for brewers and winemakers is going up from $350k to $400k.

Construction and trade licensing

Construction will benefit from big infrastructure spending. The Government is also pushing for national trade licences (starting with electricians) to make it easier to work across states.

Grants and digital support

Social enterprise loans

A new loan fund will support social enterprises with small loans.

Cyber and digital programs

There’s also extra funding for digital and cyber programs, like free cyber health checks and digital training.

Wrapping up

This Budget doesn’t offer big handouts, but it does give some help with energy costs, tax, and compliance.

This Budget isn’t a blockbuster for small businesses – there are no big cash splash handouts – but it does provide some helpful relief and sets the course for future changes. The key takeaways for you as a small business owner are: make the most of the current tax settings while they last (e.g. the $20k asset write-off before it winds back​, enjoy the upcoming power bill credits​, and prepare for new workplace rules around non-competes​.

Also, keep doing the right thing, as the tax and regulatory environment is tightening around those who don’t. It’s a good idea to have a chat with your accountant or bookkeeper about how these changes affect your business specifically. For instance, you might plan asset purchases differently this year, or update your standard employment contracts. If you’re in a sector like hospitality or construction, consider how the industry-specific measures (like the beer excise freeze or infrastructure projects) might create opportunities for you.

Remember, Budgets can be adjusted or augmented by an upcoming election and other announcements – but for now, we have a roadmap of what’s coming. Staying informed is the first step to staying ahead.

Here at Thriday, we’re keeping a close eye on these changes so we can help you navigate them. Our goal is to make running your business finances easier, no matter what new rules or relief packages come your way.

The 2025–26 Federal Budget offers some welcome relief on energy costs and promises of future tax cuts, while also introducing rules to foster fair competition and workplace fairness. By understanding these measures and planning accordingly, you can position your business to thrive in the year ahead. Now, armed with this quick Budget rundown, you can get back to what you do best – running your business – knowing what’s on the horizon!

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