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Is a Bookkeeper Worth It in 2026? 7 Benefits for Australian Small Businesses

Yes, hiring a bookkeeper in 2026 is a smart move for Australian small businesses. They ensure accurate records, save you time, reduce errors, and help you make informed financial decisions.

Whether you run a sole trader operation or a growing company, a skilled bookkeeper can help your business thrive and scale efficiently.

Why Consider a Bookkeeper for Your Business in 2026?

Running a small business in Australia is challenging. From managing clients and suppliers to staying on top of tax obligations, the list of daily tasks is endless. Many business owners try to manage bookkeeping themselves, but it can quickly become overwhelming.

A professional bookkeeper keeps your financial records accurate, helps you comply with the latest ATO regulations, and frees up your time to focus on growing your business.

Even if you’re a sole trader or run a partnership, outsourcing bookkeeping can be a cost-effective solution. Professional bookkeeping can prevent costly mistakes and improve decision-making.

1. Accurate Financial Data: The Foundation of Smart Decisions

One of the biggest advantages of hiring a bookkeeper is accurate financial data. Business owners make decisions every day, whether it’s hiring staff, investing in new equipment, or expanding operations. Accurate records ensure you’re making those decisions based on reality, not guesswork.

For example, knowing your actual cash flow can help you determine if you can safely purchase a $5,000 piece of equipment or if it’s better to save first. A professional bookkeeper ensures every transaction is recorded correctly, reconciled with bank statements, and categorised properly, giving you a clear picture of your financial health.

Pro Tax Tip: A bookkeeper can also flag unusual transactions early, helping you avoid penalties or cash flow surprises down the track.

2. Minimise Errors and Stay Compliant

Mistakes in bookkeeping aren’t just inconvenient; they can be expensive. Australian businesses earning over $75,000 per year must lodge a BAS and manage GST correctly. Errors can lead to overpaying taxes or facing penalties from the ATO.

A qualified bookkeeper ensures your BAS is lodged on time, your GST is calculated accurately, and your records comply with the latest ATO guidelines.

Whether you use cash or accrual accounting, they’ll tailor their approach to suit your business.

3. Experienced Guidance Across Different Situations

Experience matters in bookkeeping. Outsourced bookkeepers often work with multiple businesses, giving them insight into handling unusual or complex transactions.

They can:

  • Navigate software platforms like Xero, MYOB, or QuickBooks efficiently.
  • Handle edge cases such as prepaid expenses, depreciating assets, or inter-company transactions.
  • Offer advice on tax-effective strategies for your business structure (sole trader, company, or trust).

An experienced bookkeeper is more than a number cruncher; they’re a strategic partner in your business growth.

4. Cost-Effective and Flexible Solutions

Not every business needs a full-time bookkeeper. Outsourcing allows you to pay only for the time you need. For instance, a start-up requires only one day per week, while a growing company may scale to several days.

Outsourced bookkeepers can:

  • Work remotely, saving on office space.
  • Adjust services as your business grows or slows.
  • Offer specialised expertise without the expense of hiring in-house.

This flexibility makes professional bookkeeping an affordable investment rather than a fixed cost.

5. Time Savings: Focus on What You Do Best

Time is money. Every hour spent on data entry or chasing invoices is an hour not spent growing your business. A bookkeeper takes care of day-to-day financial tasks, including:

  • Accounts receivable and payable
  • Payroll and superannuation obligations
  • Bank reconciliations
  • BAS preparation and lodgement

By delegating these tasks, you can focus on strategy, marketing, and customer service, areas that drive growth.

Pro Tax Tip: Efficient bookkeeping can also reduce the stress of end-of-year accounting, making tax time simpler and less overwhelming.

6. Better Cash Flow Management

Cash flow is the lifeblood of any small business. A bookkeeper can provide timely insights into:

  • Pending invoices
  • Outstanding bills
  • Seasonal trends in income and expenses

Knowing your cash flow helps you make proactive decisions, like whether to invest in new inventory or delay discretionary spending. This helps prevent short-term cash shortages, a leading cause of small business failure.

7. Strategic Insights for Growth

Beyond day-to-day record-keeping, bookkeepers can provide strategic insights. They can identify trends, recommend cost-saving measures, and suggest ways to improve profitability. For example:

  • Spotting recurring expenses that can be renegotiated
  • Highlighting underperforming product lines
  • Advising on optimal timing for superannuation contributions or asset purchases

Outsourcing vs In-House

Case Study: Outsourced Bookkeeping for a Growing Small Business

A growing Australian small business was struggling with the rising cost of maintaining an in-house bookkeeper. Between salary, superannuation, software, and training, bookkeeping had become a significant overhead.

To improve efficiency, the business decided to outsource its bookkeeping function.

By partnering with an outsourced bookkeeping provider, the business reduced its bookkeeping costs by 50% compared to employing a full-time staff member.

Beyond cost savings, the business gained access to a team of specialists with up-to-date knowledge of Australian tax regulations, superannuation requirements, and small business reporting standards.

As a result, financial records became more accurate and compliant, reporting turnaround times improved, and the business owner was able to focus more on growth and strategic decisions, without the burden of managing an internal finance role.

Learn more about ITP’s bookkeeping services to see how we can tailor solutions for your business.

Frequently Asked Questions

Can’t I just do my own books with accounting software?

Yes, software helps, but without experience, you risk errors, misclassifications, and missed tax deductions. A bookkeeper ensures compliance and accuracy.

How much does it cost to hire a bookkeeper?

Rates vary. Part-time outsourced bookkeepers may charge $40–$80 per hour, depending on experience. Full-time in-house staff costs more when accounting for salary, super, and office space.

What tasks can a bookkeeper handle?

From invoicing to BAS lodgement, payroll, reconciliations, super contributions, and reporting, they cover everything that keeps your finances accurate and compliant.

Is a Bookkeeper Worth It?

Absolutely. In 2026, Australian small businesses benefit from having a bookkeeper more than ever.

They save time, prevent errors, provide accurate data, and offer strategic advice. Whether you outsource or hire in-house, a bookkeeper is an investment in peace of mind and business growth.

Ready to take the stress out of your bookkeeping?

Contact ITP today and see how our expert bookkeepers can help your small business thrive.

More Helpful Articles:

Avoid These 6 Small Business Tax Errors in Australia

Smart Bookkeeping Tips Every Tradie and Construction Worker Should Know

Small Business Tax Changes 2025-26: Complete Guide to Rates, Concessions & Deductions

Disclaimer: This article provides general information about bookkeeping and tax compliance in Australia. For personalised advice, consult a qualified accountant or bookkeeper.

Australian Tax Rates in 2026: How the Latest Changes Affect Your Take-Home Pay

In 2026, your take-home pay may be a bit higher thanks to ongoing tax cuts and adjusted Medicare levy thresholds.

The personal income tax system still uses progressive brackets (0%, 16%, 30%, 37%, 45%) for 2025–26, with a legislated reduction to 15% on the $18,201–$45,000 bracket from 1 July 2026 (and 14% from 2027).

These changes boost after-tax income for most Australians, especially lower and middle earners.

Why This Matters to Your Pay Packet

Tax cuts aren’t just budget headlines, they directly affect how much of your hard-earned money you actually keep. When marginal rates go down, or thresholds change, your employer withholds less tax, so your fortnightly or monthly pay can increase. You may also pay less Medicare levy if your income is near the exemption thresholds.

What Are the 2025–26 Tax Rates for Australian Residents?

The ATO defines your tax brackets based on your taxable income, the amount left after deductions and allowable offsets. These rates apply for the 2025–26 income year (1 July 2025–30 June 2026).

2025–26 Resident Tax Rates (Before Medicare Levy)

Taxable IncomeMarginal Tax RateTax Payable on Excess
$0 – $18,2000% (Tax-free)Nil
$18,201 – $45,00016%16c for every $1 over $18,200
$45,001 – $135,00030%$4,288+30c for each $1 over $45,000
$135,001 – $190,00037%$31,288+37c per $1 over $135,000
$190,001+45%$51,638+45c per $1 over $190,000

These tax rates are current for 2025–26 and remain in effect until the legislated changes from 1 July 2026 take place.

Important: These figures do not include the Medicare levy (2%) or Medicare levy surcharge (1%–1.5%). You’ll usually pay these on top of your income tax.

What’s Changing in 2026 and Beyond?

The Federal Budget introduced additional personal income tax cuts that start 1 July 2026 and continue into 2027:

From 1 July 2026

  • The tax rate for income between $18,201 and $45,000 drops from 16% to 15%.
  • All other brackets stay the same.

From 1 July 2027

  • The same bracket rate will be reduced further to 14%.

Why this matters: Even a small drop (e.g., 16% → 15%) can add up to hundreds of extra dollars in your pocket each year, particularly if you earn in that bracket. These changes are automatic once legislation is enacted.

How the Medicare Levy Works in 2026

Most Australian residents pay a 2% Medicare levy on taxable income to help fund public healthcare. You may not pay it or pay less if your income is below certain thresholds.

Medicare Levy Thresholds (2025–26)

From 1 July 2024, the thresholds were increased:

  • If your taxable income was under $27,222 in 2024–25, you are exempt from the Medicare Levy.
  • If your income was between $27,222 and $34,027, the Levy is phased in at 10 cents for each dollar above $27,222.
  • Once your income reaches $34,027 or more, you pay the full Medicare Levy of 2% of your taxable income.
  • These Medicare Levy amounts are in addition to any income tax you pay under the regular tax brackets.

2025–26 income thresholds (low threshold → full Medicare Levy of 2%):

  • Singles: $27,222 → $34,027
  • Single seniors and pensioners: $43,020 → $53,775
  • Families: $45,907 (plus $4,216 per dependent child) → $57,383 (plus $5,270 per dependent child)
  • Families (seniors and pensioners): $59,886 (plus $4,216 per dependent child) → $74,857 (plus $5,270 per dependent child)

If your income is below these amounts, you may pay no levy or a reduced levy when you lodge your tax return.

What About the Medicare Levy Surcharge (MLS)?

If you don’t have eligible private hospital cover and earn above certain levels, you might pay an additional surcharge on top of the Medicare levy, between 1% and 1.5%. The MLS kicks in at higher income tiers.

2025–26 MLS Thresholds (Examples)

StatusBase Threshold
(0%)		Tier 1
(1%)		Tier 2
(1.25%)		Tier 3
(1.5%)
SingleUp to $101,000$101k–$118k$118k–$158k$158k+
FamilyUp to $202,000$202k–$236k$236k–$316k$316k+
Medicare Levy Surcharge0%1%1.25%1.5%

Pro Tax Tip: If you’re a higher earner without private health cover, MLS can outweigh basic hospital policy premiums. Shopping around can sometimes save money and reduce your MLS liability.

Australian Residency for Tax Purposes

Your tax rate and eligibility for offsets and thresholds depend on whether you are an Australian resident for tax purposes, which isn’t strictly tied to citizenship or visa type.

The ATO uses several tests to decide residency, including:

  1. Resident test – do you live here in practice?
  2. Domicile test – is your permanent home in Australia?
  3. 183-day test – are you here more than half the income year?
  4. Commonwealth superannuation test – special rule for certain workers.

If you pass any of the tests, you’re generally treated as a resident for tax purposes, meaning you get the tax-free threshold and lower rates.

If you’re not sure what your status is, check the ATO’s official residency guide or talk to our experts.

How These Rates Affect You

1. Jane earns $60,000
Tax (before Medicare): $8,788
Medicare Levy (2%): $1,200
Total tax $9,988 — so her effective rate is about 16.6%.

2. Ben earns $90,000
Tax (before Medicare): $17,788
Medicare Levy (2%): $1,800
Total tax $19,588 — effective rate 21.8%.

These figures are approximate and don’t include any deductions or offsets, like work-related expenses, super contributions, or LITO.

Always crunch your own numbers or ask us for help.

What This Means for Your Wallet

The 2026 tax changes are designed to make the system fairer and to boost take-home pay, especially for lower and middle-income earners.

A modest cut on the $18,201–$45,000 bracket from 1 July 2026 should mean more money stays in your pocket, while expanded Medicare levy thresholds ease the burden for low-income taxpayers.

But tax is personal. The real impact depends on your individual income, deductions,s and lifestyle choices like private health cover.

That’s where expert advice can make a real difference.

Frequently Asked Questions

Do these tax changes affect PAYG withholding now?

Yes. Payroll systems (e.g. MYOB, Xero) use ATO tax tables for correct Pay As You Go (PAYG) withholding. Your employer should already be using updated rates for 2025–26.

Is the LMITO back in 2026?

No. The Low and Middle Income Tax Offset (LMITO) expired after 2022–23. Only the Low Income Tax Offset (LITO) still applies.

Why does my take-home pay sometimes drop after a raise?

Only part of your income moves into a higher bracket. You don’t lose money overall. Temporary dips can occur due to payroll settings, but the annual tax is fairer once your return is lodged.

Ready to make the most of the latest tax rules?

Talk to an ITP tax specialist today. We’ll help you optimise your tax position and boost your take-home pay.  Book a consultation with an ITP Accounting Professional today.

Disclaimer: This article is general information only and doesn’t take into account your personal circumstances. Tax law changes frequently. Always consult a registered tax agent or refer to the ATO’s official resources before making decisions.

Start the Year Right: Your 2026 Personal Tax Planning Checklist

Starting the year with a clear tax plan can save you money and stress.

Our 2026 personal tax planning checklist helps you stay on top of obligations, maximise deductions, and navigate the complex Australian tax system confidently.

Why Early Tax Planning Matters

Let’s be honest. Taxes aren’t exactly the most thrilling topic, but ignoring them can turn a simple headache into a full-blown migraine.

Whether you’re a student juggling part-time work, a professional climbing the career ladder, or a business owner managing multiple income streams, early planning can make a huge difference.

2026 brings its own set of tax changes, thresholds, and super rules.

The sooner you start, the smoother the year will go, and the better chance you’ll have of keeping more of your hard-earned cash.

What Does 2026 Mean for Your Taxes?

Here’s a quick snapshot of key 2025–2026 figures:

  •  Tax-free threshold:
Taxable Income
(2025-26 year)		Marginal RateTax Payable on this Income
$0 – $18,2000%Nil
$18,201 – $45,00016%16c for each $1 over $18,200
$45,001 – $135,00030%$4,288 plus 30c for each $1 over $45,000
$135,001 – $190,00037%$31,288 plus 37c for each $1 over $135,000
$190,001+45%$51,638 plus 45c for each $1 over $190,000
  • Medicare Levy: 2% of taxable income
  • Superannuation Guarantee: 11%
  • GST Threshold: $75,000 (small business turnover)

Knowing these numbers helps you plan contributions, deductions, and payments more accurately.

Where Do You Start? Your 2026 Tax Planning Checklist

Here’s your actionable checklist to kick off the year right.

1. Review Your Income Streams

  • List all income sources: salary, freelance work, investments, rental property.
  • Check if any income is not taxed at source (e.g. dividends or overseas earnings).
  • Consider adjusting PAYG instalments if your income changes.

Pro Tax Tip: Set up a dedicated folder (physical or digital) for receipts and invoices, it saves a headache come EOFY.

2. Super Contributions

  • Concessional contributions: Up to $30,000
  • Non-concessional contributions: Up to $120,000, tax-free in the fund.
  • Review if topping up super this year is better than paying extra tax later.

Case Study: Supercharged Savings with Smart Contributions

Sarah, a 34-year-old marketing professional based in Sydney, was looking for ways to reduce her 2025-2026 tax liability while also thinking about her long-term financial security. With a taxable income of $95,000, she knew she could benefit from concessional super contributions, which are tax-deductible and count towards her retirement savings.

After reviewing her finances, Sarah decided to contribute an extra $5,000 to her super fund before 30 June 2026. By doing so, she reduced her taxable income from $95,000 to $90,000. This not only lowered her overall income tax payable for the year but also allowed her to grow her super balance faster.

The Outcome:

  • Immediate Tax Benefit: She reduced her tax by about $750 after contributions tax.
  • Long-Term Growth: Her super now has an extra $5,000 compounding over time, significantly boosting her retirement savings.
  • Peace of Mind: Sarah feels confident knowing she is using legitimate tax strategies while also investing in her future.

Pro Tax Tip: Concessional super contributions can be a strategic tool to reduce taxable income while supporting long-term financial goals. Speak with a registered tax agent to ensure contributions don’t exceed the annual cap of $30,000.

3. Maximise Deductions

Common deductions include:

  • Work-from-home expenses (electricity, internet)
  • Self-education costs
  • Charitable donations
  • Tax agent fees
  • Tools, equipment, or professional subscriptions

Pro Tax Tip: Keep receipts, digital photos are fine if originals aren’t handy. The ATO accepts them.

4. Consider Offsets & Rebates

  • Low-income or seniors tax offsets
  • Private health insurance rebate to reduce Medicare levy surcharge
  • Spouse contributions offset

Case Study: Maximising Offsets Without Losing Benefits

Tom, a 32-year-old secondary school teacher in Melbourne, earns a modest income of $52,000 per year. Like many Australians in similar income brackets, he was looking for ways to reduce his tax bill without sacrificing the benefits he already enjoys, particularly his private health insurance.

After a consultation with his tax advisor at ITP, Tom learned about the Low Income Tax Offset (LITO). By claiming LITO for the 2025–2026 financial year, he was able to reduce his taxable income and, ultimately, his tax payable.

Importantly, he also ensured that his private health insurance coverage remained intact, avoiding the Medicare Levy Surcharge, which can apply if higher-income earners don’t maintain appropriate private health cover.

The Outcome:

  • Tax Savings: Tom saved $700 in income tax simply by claiming the Low Income Tax Offset.
  • No Impact on Health Cover: He kept his private health insurance benefits without triggering additional levies.
  • Financial Confidence: By understanding available offsets, Tom feels more in control of his finances and better prepared for EOFY planning.

Pro Tax Tip: Always review eligibility for offsets such as LITO, seniors and pensioner tax offsets, or private health rebates. Even small offsets can add up and make a noticeable difference to your cash flow.

5. Plan for Capital Gains & Investments

  • Review investment portfolio: sell underperforming shares before EOFY to offset gains.
  • Consider CGT discounts (50% for assets held >12 months).
  • Track dividend reinvestments, they’re taxable even if automatically reinvested.

Pro Tax Tip: A mid-year portfolio review can prevent nasty surprises at EOFY.

6. Business Owners & Freelancers

  • Keep business and personal accounts separate.
  • Claim business expenses: equipment, software, travel, vehicle usage.
  • Ensure BAS and PAYG instalments are up-to-date.
  • Check for small business concessions on assets under $20,000. (Subject to current government thresholds, which may change annually.)

7. Centrelink & Other Considerations

  • Update income estimates for any Centrelink benefits to avoid overpayment.
  • Check eligibility for any government rebates or incentives (energy, childcare, or study-related).

What This Looks Like in Real Life

Case Study: Freelancer with Multiple Clients

The Problem:
Jane is a freelance consultant who worked with four different clients throughout 2025. Each client paid her differently, some monthly, some ad hoc, and none withheld tax. Her income records were spread across bank statements, invoices, and emails. As tax time approached, Jane was overwhelmed and worried she’d be hit with a large, unexpected end-of-financial-year (EOFY) tax bill.

How ITP Helped:
ITP stepped in to consolidate all income streams into a clear, compliant structure. We reviewed her invoices and bank statements, reconciled earnings, and ensured all income was accurately reported. Jane was advised on setting up PAYG instalments so future tax obligations would be spread across the year rather than landing in one lump sum. We also identified legitimate deductible expenses, including home office costs, software subscriptions, and professional expenses, that Jane hadn’t realised she could claim.

The Outcome:
Jane avoided a stressful EOFY tax shock, gained better control over her cash flow, and reduced her taxable income. By claiming overlooked deductions, she saved $3,500 and now has a clear system in place for managing her freelance income going forward.

Case Study: Property Investor

The Problem:
Mike purchased a rental property midway through the financial year. While he correctly declared his rental income, he didn’t realise he was eligible to claim property depreciation, one of the most valuable deductions available to property investors. As a result, he overpaid tax and missed out on improving his cash flow.

How ITP Helped:
ITP reviewed Mike’s tax return and identified the missed opportunity. We arranged a professional depreciation schedule, capturing both building write-offs and depreciable assets. An amended tax return was lodged to include these deductions, ensuring everything was compliant with ATO requirements.

The Outcome:
Mike received an additional $2,200 in tax savings, boosting his cash flow and improving the overall return on his investment. He now understands how to maximise deductions on his rental property in future years and has a long-term tax strategy in place.

Frequently Asked Questions

When should I start tax planning for 2026?

Start now! Early planning gives you flexibility with deductions, super contributions, and PAYG instalments.

Can I claim super contributions made mid-year?

Yes, as long as they don’t exceed contribution caps. Speak to ITP about optimising timing.

Are work-from-home expenses still deductible in 2026?

Yes, including electricity, internet, and home office equipment.

How do I avoid surprises with investment income?

Track dividends, CGT events, and consider pre-EOFY portfolio reviews.

Do I need a tax agent?

While optional, a registered agent like ITP ensures compliance, maximises deductions, and reduces stress.

Can students claim deductions?

Yes. Self-education expenses and work-related costs are deductible.

What happens if I miscalculate Centrelink income?

You may have to repay overpayments. Regular updates prevent this.

Unlock Your 2026 Tax Savings

Starting 2026 with a clear personal tax plan isn’t just smart, it’s empowering.

By reviewing income, maximising deductions, managing super, and consulting a trusted tax professional, you’ll avoid surprises and optimise your finances.

Book a consultation with ITP today and let us guide you through your 2026 tax planning

More Helpful Articles:

Understanding Tax Deductions: What Every Freelancer Should Know

Saving for Retirement as a Freelancer: A Practical Guide for 2025

Unlock Savings: 6 Key Tax Deductions Every Construction Worker and Tradie Should Know

Disclaimer: This blog is for general information only and does not constitute financial advice. Always consult a registered tax agent or accountant for advice specific to your circumstances. Figures are based on 2025–2026 Australian tax year data and may change.

financial advisor

The Benefits of Consulting a Financial Advisor: When and Why to Seek Help for ITP Accounting Professionals

The benefits of consulting a financial advisor include paying less tax, making smarter investment decisions, staying compliant with the ATO, and creating a clear financial plan.

If your income is growing, your business is expanding, or your tax situation feels confusing, it’s time to seek help.

A financial advisor doesn’t replace you, they guide you, protect you, and help you move forward with confidence.

When “She’ll Be Right” Stops Working

You start out thinking you’ll manage your money “later.” Then suddenly, tax deadlines, BAS statements, superannuation obligations, and investment decisions stack up like a Jenga tower. One wrong move, and the whole thing wobbles.

That’s when most Aussies realise: Googling at 11:59 pm before an ATO deadline isn’t a financial strategy. It’s a stress strategy.

Whether you’re a student, professional, or business owner, the benefits of consulting a financial advisor go far beyond saving time. They help you avoid costly mistakes, grow wealth, and sleep better at night.

Let’s unpack when you should seek help, and why it could be one of the smartest decisions you’ll make.

What Does a Financial Advisor Actually Do?

Think of a financial advisor as your personal money GPS. You tell them where you are, where you want to go, and they map out the smartest route, detours included.

They can help you with:

  • Tax planning and minimisation
  • Investment strategies
  • Superannuation optimisation
  • Retirement planning
  • Business structuring
  • Cash flow and debt management
  • Estate and succession planning

And in Australia, where rules change faster than the weather in Melbourne, expert guidance matters.

Life Throws Financial Curveballs (Here’s How to Catch Them)

Your Pay Packet Grew… But Your Bank Balance Didn’t

When More Income Starts Feeling Like Less

You finally got that raise. Your salary jumped from $75,000 to $110,000. On paper, you’re winning. But in reality? Your take-home pay doesn’t feel that different.

Here’s why:

  • You’ve moved into a higher tax bracket
  • Your HECS repayment has increased
  • Your Medicare levy (2% of taxable income) has gone up
  • You may now be missing out on certain offsets or benefits

Suddenly, “earning more” also means:

  • Bigger tax bills
  • Less eligibility for Centrelink benefits
  • Less cash than you expected

Without a clear strategy, you could be giving the ATO thousands more than you legally need to, money that could be working for you instead.

Your Side Hustle Turned Into a Real Business

When Growth Brings More Paperwork Than Profit

What started as a weekend gig is now bringing in serious money. You’ve crossed the $75,000 GST threshold and now you must:

  • Register for GST
  • Lodge BAS statements
  • Track income and expenses properly
  • Pay super at 12%
  • Set aside money for tax

Suddenly, your “fun little business” feels like a second full-time job.


You’re spending more time on admin than actually making money, and one missed deadline could trigger ATO penalties.

A financial advisor can help you:

  • Choose the right structure (sole trader vs company)
  • Plan for tax before it hurts
  • Improve cash flow so growth doesn’t drain you

You’ve Started Investing and Now Tax Feels Complicated

When Wealth Building Meets ATO Rules

You’ve bought shares. Maybe some crypto. Maybe both. Now you’re wondering:

  • Do I pay tax when I sell?
  • What’s a capital gain?
  • Can I claim losses?
  • What expenses are deductible?

Here’s the trap: Many Australians invest well, but report poorly. And that can lead to penalties, audits, or missed tax savings.

A financial advisor helps you:

  • Understand capital gains tax
  • Use the 50% CGT discount where eligible
  • Structure investments tax-effectively
  • Keep records that protect you

Your Life Changed But Your Money Plan Didn’t

Marriage, Kids, Property, or Inheritance

Big life moments come with big financial consequences:

  • Buying your first home
  • Getting married or separated
  • Starting a family
  • Receiving an inheritance

Each one changes your tax position, super strategy, and long-term goals. Without advice, you’re guessing. With guidance, you’re planning.

Why These Moments Matter

These aren’t rare situations, they’re normal life stages. The difference between stress and confidence is knowing you have someone in your corner who understands the rules, the numbers, and your goals.

That’s where the benefits of consulting a financial advisor become crystal clear.

When Should You Seek Financial Advice?

1. When your income changes

New job, promotion, second income stream? Your tax strategy should change too.

2. When you start or grow a business

Structure matters. Sole trader, company, or trust? One choice could save you tens of thousands in tax.

3. When you feel unsure

If you’re constantly second-guessing yourself, it’s time for expert support.

The Benefits of Consulting a Financial Advisor for Australians

Pay Less Tax (Legally)

A financial advisor works with tax professionals to:


How Salary Sacrifice Can Save Tax

Let’s say Sarah earns $95,000 in 2026. She’s doing well, but she notices that a significant portion of her income is going to tax, including the Medicare levy of 2%.

Sarah decides to sacrifice $10,000 into her superannuation. This means she arranges for $10,000 of her pre-tax income to go straight into her super fund instead of her bank account. Here’s what happens:

  • Taxable income drops: Her taxable income reduces from $95,000 to $85,000.
  • Immediate tax savings: Because she’s in the 32.5% marginal tax bracket, this reduction saves her roughly $3,250 in income tax.
  • Medicare levy impact: The Medicare levy of 2% is also calculated on the reduced taxable income, giving her an additional $200 in savings.
  • Total savings: Around $3,450 in total.

On top of that, Sarah is also boosting her super balance for retirement, money that grows over time thanks to compounding. In short, she’s legally paying less tax and preparing for the future.

Pro Tax Tip: Salary sacrificing works best when you have room within the concessional contributions cap. Going over the cap may trigger extra tax, so check with a financial advisor first.

Stay Compliant

ATO penalties aren’t fun. Advisors ensure you meet obligations for:

  • PAYG
  • GST
  • Super
  • BAS

How Superannuation Becomes a Wealth Tool

In 2026, the Super Guarantee rate is permanently set to 12%.

  • Consolidate accounts
  • Choose the right fund
  • Use concessional contributions effectively

Pro Tax Tip:
Unused concessional caps from the last 5 years can be carried forward. This is a powerful tax strategy.

Business Owners: Why Advice Pays for Itself

Running a business? You’re juggling GST, PAYG, BAS, payroll, and super. That’s a lot of plates.

Case Study: How Smart Structuring Saved a Brisbane Café Owner Thousands

Problem:
John runs a small café in Brisbane. Business is booming, but he was paying too much tax, around $18,000 more than necessary. The issue? His business was structured as a sole trader, and he wasn’t claiming all eligible deductions. He was also unsure how to handle GST, super obligations, and equipment purchases.

ITP Help:
When John approached ITP, our team reviewed his finances and identified opportunities to reduce his tax liability legally. We:

  • Restructured his business from a sole trader to a company, giving him access to lower corporate tax rates and better asset protection.
  • Optimised deductions, including business expenses, depreciation on equipment, and prepayment strategies.
  • Streamlined GST and super obligations, ensuring compliance while improving cash flow.

Outcome:
In the first year after restructuring and implementing these strategies, John:

  • Saved $22,000 in tax
  • Improved cash flow, meaning more money available for staff wages, café renovations, and marketing
  • Gained confidence in managing compliance and future growth

John’s story shows how the right advice doesn’t just save money, it also gives peace of mind and positions a business for sustainable success.

Pro Tax Tip: Even small businesses can benefit from professional structuring advice. The right setup now can save tens of thousands later.

Pro Tax Tips (Because Everyone Loves Shortcuts)

  1. Pro Tax Tip #1:
    Claim work-from-home deductions correctly, ATO has strict record rules.
  2. Pro Tax Tip #2:
    Prepay interest or expenses before 30 June to bring forward deductions.
  3. Pro Tax Tip #3:
    Use your spouse’s lower tax rate for investment income where legal.

Stay Smart with Tax

If money feels confusing, you’re not behind, you’re just human. Financial advice isn’t for “rich people.” It’s for people who want to make smart choices early.

The benefits of consulting a financial advisor include peace of mind, better returns, and fewer “dismay” moments with the ATO.

Frequently Asked Questions

Is a financial advisor worth the cost?

Yes. The tax savings alone often exceed the fee.

Do students need financial advice?

Absolutely, especially for HECS, part-time income, and investing.

Can I use both an accountant and advisor?

Yes, they work together for best results.

How often should I see an advisor?

At least once a year or when your income changes.

Is financial advice tax deductible?

Some fees are deductible, ask your advisor.

What if I’m bad with money?

That’s exactly who advisors help.

Take the Stress Out of Tax Time

Freelancer tax deductions can get complicated fast, balancing GST, home office claims, super contributions, and ATO compliance isn’t easy.

Leaving it to guesswork or the last minute can cost you more than you realise.

Take the stress out of tax time and make sure your finances are working for you, not against you. Book a consultation with an ITP Accounting Professional today and get personalised advice tailored to your situation.

More Helpful Articles:

Avoid These 6 Small Business Tax Errors in Australia

Understanding Tax Deductions: What Every Freelancer Should Know

Saving for Retirement as a Freelancer: A Practical Guide for 2025

Unlock Savings: 6 Key Tax Deductions Every Construction Worker and Tradie Should Know

Disclaimer: This article is general information only and does not constitute personal financial or tax advice. Always consult a qualified professional for advice specific to your circumstances.

Smiling freelancer holding a tablet

Saving for Retirement as a Freelancer: A Practical Guide for 2025

Freelancers do not retire on invoices. They retire on savings. In Australia, freelancers must build that savings plan themselves. There is no employer super guarantee.

Income can change every month. This makes retirement planning easy to delay and hard to catch up on. 

In 2025, the smartest approach combines super contributions, tax planning, and flexible investments. Small decisions made consistently matter more than large, irregular contributions.

Planning early reduces risk, lowers future stress, and protects your long-term lifestyle.

The Freelancer’s Retirement Challenge

Imagine this: You’re a freelancer juggling multiple clients, chasing deadlines, and suddenly you realise your retirement plan is…well, pretty much non-existent. It’s a common scenario.

Many Australians think super and retirement planning are only for full-time employees, but as a freelancer, you’re fully responsible for your future.

Retirement planning might feel complex, but it doesn’t have to be.

With the right strategies, you can secure your financial future while staying on top of your tax obligations.

Why Do Freelancers Struggle with Retirement Savings?

Freelancers often face inconsistent income, making it tempting to prioritise immediate expenses over long-term savings. Here’s why this matters:

Irregular Income Patterns

  • Client payments vary month to month.
  • Without automatic contributions, super and savings can lag.

Lack of Employer Contributions

  • Unlike employees, you don’t get the Super Guarantee.
  • You need to make voluntary contributions to super funds.

Complex Tax Considerations

  • Freelancers juggle GST, income tax, and potential business deductions.
  • Incorrect super contributions or overlooked deductions can cost you.

Pro Tax Tip: Automate super contributions monthly. Even small, consistent payments can grow substantially over time.

How Can You Start Saving for Retirement as a Freelancer?

Maximise Your Super Contributions

Freelancers can contribute to their super fund in two ways:

  1. Concessional Contributions – Before-tax contributions, up to $27,500 in 2025, reduce your taxable income.
  2. Non-Concessional Contributions – After-tax contributions, up to $110,000 per year, can boost savings without affecting your taxable income.

Case Study: Using Pre-Tax Super Contributions to Save on Tax

Sarah is a freelance designer earning $85,000 a year. To plan ahead for retirement, she decides to contribute $10,000 to her super before tax.

By doing this, Sarah reduces her taxable income from $85,000 to $75,000. As a result, she pays around $2,700 less in income tax (excluding the Medicare levy), while also growing her retirement savings at the same time.

This approach helps Sarah save on tax now and build a stronger financial future.

Diversify Your Retirement Savings

  • High-Interest Savings Account: Low-risk, accessible for emergencies.
  • Managed Funds or ETFs: Moderate risk, potential for higher returns.
  • Property Investments: Consider long-term rental income.

Pro Tax Tip: Keep clear records of all investments for easier tax reporting and potential deductions.

What Tax Benefits Can Boost Your Retirement Savings?

Freelancers have unique tax advantages:

Deductible Expenses

You can claim work-related expenses that directly contribute to your income, such as:

  • Home office costs (electricity, internet, rent apportioned)
  • Professional memberships and subscriptions
  • Software or hardware needed for work

Case Study: A Simple Way to Save on Tax and Grow Super

Mark is a freelance IT consultant who works from home. Over the years, he spent money on things like electricity, internet, and office equipment. By claiming $4,500 in home office expenses, he was able to lower his taxable income.

Because his taxable income was lower, Mark paid less tax. This left him with extra money that he decided to put into his superannuation.

As a result, Mark not only saved on tax now, but also increased his retirement savings for the future.

This shows how claiming the right deductions can make a real difference without being complicated.

Government Co-Contributions

If your income is below $58,445, you might be eligible for government co-contributions. This means extra money added to your super if you make after-tax contributions.

Pro Tax Tip: Review your eligibility each year via ATO’s co-contribution page.

Tax Scenarios for Freelancers

Scenario 1: The Over-Contributing Freelancer

Problem: Marc, a freelance graphic designer, claimed 100% of his phone, internet, and rent as business expenses without tracking actual usage. This put him at risk of ATO scrutiny and potential penalties.

ITP Help: Our team reviewed his records, apportioned expenses according to business versus personal use, and recalculated claims to ensure they were accurate and compliant.

Outcome: Marc avoided penalties, stayed fully compliant with ATO rules, and still saved $3,200 on his tax return. A win-win for his finances and peace of mind.

Scenario 2: The Under-Contributing Sole Trader

Problem: Rose, a sole trader consultant, was overly cautious and made minimal contributions to her super, missing out on potential tax benefits and long-term retirement growth.

ITP Help: We analysed her variable income and calculated the optimal concessional contributions she could make each year without exceeding caps.

Outcome: Rose maximised her tax savings while strategically boosting her retirement balance by $12,000 over two years, putting her back on track for a comfortable future.

Key Takeaway:

Whether you’re over-claiming or under-contributing, understanding the rules and getting expert guidance ensures you stay compliant while making the most of your hard-earned money.

Your Next Moves: Staying Smart with Tax

Keep Accurate Records

  • Maintain receipts, invoices, and logs.
  • Use accounting software to track income and expenses.

Monitor Super Contributions

  • Check your super fund statements regularly.
  • Adjust contributions based on income fluctuations.

Consult a Tax Expert

Pro Tax Tip: Schedule an annual review to ensure you’re claiming all eligible deductions and contributions.

Frequently Asked Questions

How much should a freelancer contribute to super?

Aim for at least 10–15% of your annual income, adjusting based on cash flow.

Can I claim home office costs for super contributions?

No, home office costs reduce taxable income but do not directly affect super.

What if my income varies each month?

Make flexible contributions. Some months may be higher; others lower. Consistency over time matters most.

Are there penalties for over-contributing to super?

Yes. Excess concessional or non-concessional contributions may incur additional tax.

How do I track government co-contributions?

Check eligibility and contributions via your MyGov super portal or the ATO website.

Can I invest outside super to save for retirement?

Absolutely. Diversified investments can supplement super but keep tax implications in mind.

Do freelancers pay GST on super contributions?

No. Super contributions are not subject to GST.

Want to manage your retirement savings more effectively and maximize your tax benefits?

We’ll help you understand your super options, identify smart tax-saving strategies, and create a plan that aligns with your income, goals, and lifestyle, so you can build your future with confidence while staying tax-efficient today.

Book a consultation with ITP Accounting Professionals and get tailored advice that works for your freelance business.

More Helpful Articles:

Maximise Your Savings: Your Complete Guide to Rental Property Tax Deductions

Maximise Your Tax Savings: A Comprehensive Guide to Tax Deductions

7 Smart Ways to Use Your Tax Refund in Australia (2025 Guide)

How to Get Your Tax Refund Faster in 2025

Disclaimer: This blog is for general informational purposes and does not constitute financial advice. Please consult with a qualified tax professional or financial adviser for personalised advice

Freelancer at a desk looking at the laptop

Understanding Tax Deductions: What Every Freelancer Should Know

Freelancers in Australia can reduce the tax they pay by claiming valid business deductions. These deductions lower your taxable income.

You must only claim expenses that directly relate to earning your income. Personal or private costs are not deductible. You must keep records to support every claim. 

In 2025, the ATO continues to closely review freelancer deductions, especially home office, phone, internet, and vehicle claims.

Claiming too much or too little can both cost you money. Understanding what you can claim, and how to claim it correctly, helps you stay compliant and avoid unnecessary stress.

Why Freelancers Get Tripped Up on Deductions

If you’re freelancing in Australia, chances are you’ve asked yourself:
“Can I claim this?”

Laptop? Probably.
Coffee while working? Maybe.
That new phone you sometimes use for clients? Now it gets tricky.

Understanding tax deductions is one of the biggest challenges freelancers face,  especially when you’re juggling clients, invoices, GST, and actually doing the work that earns you money. The ATO expects you to “just know” the rules, but let’s be honest: they’re not always intuitive.

What Are Tax Deductions and Why Do They Matter?

Tax deductions reduce your taxable income, which means you pay less tax overall. Simple idea, complex execution.

To be deductible under ATO rules, an expense must:

  • Be directly related to earning your income
  • Not be private or domestic in nature
  • Be supported by records or receipts

Pro Tax Tip: If you wouldn’t have bought it without your freelance work, it’s more likely to be deductible.

Which Tax Deductions Can Freelancers Commonly Claim?

Let’s break this into real, practical categories:

Home Office Expenses

If you work from home (and most freelancers do), you may be able to claim:

  • Electricity and internet (business portion)
  • Phone usage
  • Depreciation on office furniture
  • Rent or mortgage interest (partial, carefully calculated)

The ATO allows different calculation methods, so choosing the right one matters.

Tools, Software, and Equipment

  • Laptops and monitors
  • Adobe, Figma, Xero, MYOB subscriptions
  • Cloud storage and cybersecurity tools

Assets over $300 are usually depreciated over time.

Vehicle and Travel Expenses

Commuting from home to your usual work location is not deductible, a common ATO red flag.

Pro Tax Tip: If you’re mixing business and personal use, only claim the business percentage, and keep evidence.

How Do GST and Deductions Work Together in 2025?

If your business turnover reaches $75,000 or more, registering for Goods and Services Tax (GST) is mandatory in Australia.

This requirement applies to all business structures including sole traders, partnerships, companies and trusts once your annual sales exceed the threshold, so understanding trust accounting is essential for proper GST and deduction management.

Failing to register on time can lead to penalties and interest charges, so it’s important to stay on top of your GST obligations.

Key GST Reminders for 2025:

  1. GST Rate Remains 10%
    The GST rate in Australia is still 10%, meaning you need to charge this on most goods and services sold. Whether you’re issuing invoices or receiving payments, including GST correctly ensures compliance and avoids issues during audits.
  2. Claiming GST Credits on Business Purchases
    Registered businesses can claim GST credits on purchases made for business use. This means that the GST you pay on office supplies, software, equipment, or other business-related expenses can be offset against the GST you collect from your sales, reducing your net GST payable. Remember, proper records and tax invoices are essential to support these claims.
  3. BAS Lodgement: Correct and Timely
    The Business Activity Statement (BAS) is how you report and pay your GST to the ATO. Lodging BAS correctly and on time is crucial to avoid penalties and interest. Whether you report quarterly or monthly, double-check your figures, reconcile GST collected and claimed, and submit before the deadline.

Tip: Even if you’re new to GST or unsure about the rules, staying organised, keeping detailed records, and understanding your obligations can save you headaches and potential fines down the track.

Real-Life Scenarios You Might Face

Scenario 1: The Over-Claiming Freelancer

Meet Jane, a talented freelance graphic designer. When it came to her tax return, she confidently claimed 100% of her phone, internet, and even home office rent as business expenses. On paper, it looked impressive, but there was a problem: she had no usage logs or proper apportionment to back up her claims. This is a common trap for freelancers who work from home; the ATO expects a reasonable allocation between personal and business use.

The ITP Solution:
Our team carefully reviewed Jane’s expenses, adjusted the claims to reflect actual business use, and applied correct apportionment calculations. We made sure every deduction was fully compliant with ATO guidelines.

The Outcome:
By fixing over-claims before submission, Jane avoided potential penalties, navigated the ATO review without stress, and ultimately saved $3,200 in taxes. She got peace of mind knowing her return was accurate and defensible.

Scenario 2: The Under-Claiming Sole Trader

Then there’s Tom, a sole trader consultant who was overly cautious with his tax return. He claimed almost nothing, fearing audits or mistakes. While this might seem safe, it actually meant he was paying far more tax than necessary, and leaving cash on the table.

The ITP Solution:
We worked with Tom to identify missed deductions, including legitimate business expenses and GST credits. We guided him on proper documentation and record-keeping, ensuring every claim was supported and compliant.

The Outcome:
The result? Tom received a $6,500 tax refund, dramatically improving his cash flow. By claiming what he was entitled to, he could reinvest in his business, reduce financial stress, and approach future tax seasons with confidence.

Key Takeaway:

Whether you’re over-claiming or under-claiming, proper guidance is crucial. Correct deductions mean more savings, fewer headaches, and a stress-free ATO review. ITP Accounting ensures freelancers and sole traders pay what’s fair, and no more.

Pro Tax Tip: Paying too much tax is just as costly as paying too little, the ATO won’t refund “voluntary overpayments” unless you claim correctly.

What About Super, Medicare Levy, and Other Obligations?

As a freelancer, you’re responsible for planning ahead.

2025 Key Figures (Australia)

  • Medicare Levy: 2% of taxable income for most taxpayers. Lower-income earners may be eligible for a reduction or exemption, and an additional Medicare Levy Surcharge (MLS) may apply to high-income earners without private hospital cover.
  • Super Guarantee: 12% (if you employ others)
  • Personal tax rates: Progressive, based on income thresholds

Super isn’t mandatory for sole traders, but skipping it can hurt long-term wealth.

What Records Should Freelancers Keep?

ATO record-keeping rules require:

  • Receipts (digital is fine)
  • Invoices issued and received
  • Bank statements
  • Mileage or usage logs

The ABS highlights that poor record-keeping is a major cause of small business failure.

Pro Tax Tip: If the ATO audits you, good records turn panic into paperwork.

Your Next Moves: Staying Smart with Tax

If you’re freelancing without a clear tax strategy, you’re reacting — not planning.

Smart freelancers:

  • Review deductions quarterly
  • Separate business and personal finances
  • Get advice before lodging, not after

Frequently Asked Questions

Can freelancers claim coffee or meals?

Only if you’re travelling away from home for work, everyday meals aren’t deductible.

Do I need to register for GST?

Yes, if turnover reaches $75,000 in any 12-month period.

Can I claim clothing?

Only protective or branded workwear, not everyday clothes.

What happens if I make a mistake?

Corrections are possible, but penalties apply for repeated or careless errors.

Is accounting software deductible?

Yes, if used for your freelance business.

Do freelancers need an accountant?

Legally no. Practically, it often pays for itself.

Ready to Get Your Freelancer Tax Sorted?

Freelancer tax deductions can quickly become confusing, especially when you’re balancing GST, home office claims, super planning, and ATO compliance all at once. Guessing or leaving it until the last minute can cost you more than you realise

Take the stress out of tax time and feel confident about your numbers. Book a consultation with an ITP Accounting Professional today and find your nearest office.


More Helpful Articles:

Tax Calculator Australia 2025: Why It’s Still the Easiest Way to Estimate Your Refund

Working From Home Tax Claims 2025: Are You at Risk of an ATO Review?

Top 2025 Tax Offsets You Might Be Missing in Australia

Disclaimer: This blog is for general informational purposes only and does not constitute professional tax advice. Tax law is complex and subject to change. Consult a qualified tax adviser or the ATO for guidance specific to your circumstances.

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