Coffee Update – May 2026
Saving tax probably won’t let you retire early, might buy you a slightly fancier coffee, and it won’t make you a millionaire. Still, none of that matters because — let’s be honest — we all hate paying it. So, grab your latte in the hope you can claim it as a tax deduction and let’s make tax mildly entertaining.
Payday Super Is ComingWith Payday Super commencing from 1 July 2026, the ATO has released a list of “common myths,” which is bureaucratic code for:
“Please stop ignoring this.”
Myth #1: “There’s nothing super funds trustees or employers need to do before the start date.”
Err….. there is.
The ATO says super funds should already be preparing systems to receive more frequent contributions and meet tighter processing timeframes. This includes upgrading systems to “SuperStream Contributions v3.0” — which sounds less like payroll software and more like the latest Tesla operating system.
Make sure you are ready to go from 1 July 2026
Myth #2: “Payday Super just means contributions happen more often.”
Nope. Apparently. But that might be a being economical with the truth.
According to the ATO, this is about:
• speed;
• accuracy;
• responsiveness; and
• rejecting incorrect contributions quickly enough that employers can still fix them in time.
Err…. No, it’s not. Previously if your business paid Superannuation quarterly or 4 times a year. This was manageable. Simple. Easy. Not anymore.
If you pay your team weekly you now need to pay Super 52 times (!). If you pay monthly, then you pay Super 12 times. Only if you pay your team every quarter will businesses be the same as the previous system. Know many employees who will accept being paid once a quarter? Didn’t think so.
Errors can no longer quietly let errors drift around the financial system like a shopping trolley in a Bunnings car park. You have to fix them with 7 days.
Myth #3: “Super fund actions don’t affect employer compliance.”
Wrong again.
If super funds reject contributions late, provide vague error messages, or maintain poor data quality, employers may fail compliance obligations through no fault of their own.
So now everyone gets to stress together. Team building at its finest.
What should you do? Move to monthly pay to reduce the red tape burden – but good luck with trying to convince your team to do that – epically if they usually get paid weekly. Welcome to red tape hell.
The ATO Responds to High Fuel Costs
Translation: “We know diesel now costs roughly the GDP of a small island nation.”
The ATO has announced temporary support measures for eligible businesses struggling with fuel costs between 1 April and 30 June 2026.
Support may include:
• longer payment plans;
• no upfront payment requirements;
• remission of General Interest Charges (‘GIC’) where conditions are met; and
• assistance varying PAYG instalments where taxable income has reduced.
Which is genuinely useful.
Because right now, filling up a ute feels less like a routine business expense and more like financing a Mediterranean yacht.
Businesses can apply through ATO online services, and the ATO will then contact them regarding next steps.
Or, alternatively, you could contact us — which generally involves less hold music and fewer robotic voices thanking you for your patience while actively testing it.
The ATO Wants Businesses to Review Their GST Turnover
Because apparently “set and forget” was never an acceptable accounting method.
The ATO has identified businesses that have exceeded GST thresholds but failed to update their reporting methods.
Here’s the important part:
If your GST turnover exceeds $10 million:
You must:
• move from “simpler BAS” reporting to full BAS reporting; and
• account for GST using the accruals method instead of cash accounting.
If turnover exceeds $20 million:
You must lodge BAS monthly instead of quarterly.
The ATO will begin moving affected businesses to the correct reporting methods from 1 July 2026.
So, if your business has grown substantially and your BAS setup hasn’t changed since Kevin Rudd was Prime Minister, now might be the time to review things.
Preferably before the ATO reviews them for you.
Home Office and Car Expense Claims Get Smacked Down
In a decision that will disappoint approximately every bloke who bought a standing desk during COVID, the Full Federal Court has overturned a Tribunal decision allowing deductions for home office and car expenses.
The taxpayer worked for the ABC as a sports presenter and producer and performed part of his role from a second bedroom in his rented apartment during the pandemic.
Initially, the Tribunal allowed:
• a portion of rent as home office expenses; and
• car expenses for travel between home and the ABC studios.
But the Full Federal Court disagreed.
Why?
Because the Court found:
• the “essential character” of rent was still domestic accommodation; and
• travelling from home to the studio was travel “to work,” not “on work.”
Which is tax law’s version of:
“Nice try. But we aren’t having it”
The key lesson here?
Just because your dining room became Mission Control during COVID doesn’t suddenly make your apartment a commercial office tower.
Self-Education Claims Rejected
Or: “Watching entrepreneurial TikToks is not a tax deduction.”
The Administrative Review Tribunal recently rejected a taxpayer’s self-education claims because the expenses lacked a sufficient connection to his actual employment duties.
The taxpayer worked in IT but argued his role had evolved into sales and marketing responsibilities. He then attempted to claim deductions for:
• online training courses;
• software and hardware; and
• membership fees.
The problem?
There was:
• no written evidence from the employer requiring the courses; and
• the training related more to online content creation, affiliate marketing and entrepreneurship than the taxpayer’s actual IT role.
In other words, the Tribunal looked at the claims and effectively said:
“You weren’t improving your current job skills. You were trying to become Gary Vee.”
The takeaway? Self-education deductions generally need a direct connection to your existing income-earning activities — not the business empire you hope to build after binge-watching motivational reels at 1am.
The ATO Has Launched a Scam Call Verification Feature
And honestly, this one is surprisingly sensible. I guess if you have a thousand chances you are bound to get it right once.
You can now verify whether an incoming call claiming to be from the ATO is genuine through the ATO app.
The process:
1. Open the ATO app;
2. Log in;
3. Select “verify call”; and
4. Within 30 seconds, the app should confirm whether the call is legitimate.
That’s the theory. Not sure if it will work in practice.
If nothing appears? Hang up.
Because if there’s one thing scammers hate, it’s transparency and two-factor authentication.
Frankly, this is one of the more practical things the ATO has released in years.
Which probably means they’ll ruin it with a mandatory update during peak tax season.
Final Thought (Because Lawyers Make Us):
This has been your tax update dose, bureaucratic drama and financial soap opera.
Look, we’ve done our best to make this information helpful, accurate, and only mildly boring. But don’t go quitting your business, selling your house, or launching a crypto empire based solely on what you’ve read here. This is general advice – not a personalised financial horoscope.
If you’re thinking of acting on any of it, please chat to a real-life professional (preferably one who’s qualified, not just good at Monopoly or one that sits in the pub). Professionals can help make sure the advice actually fits your situation and doesn’t end in a surprise ATO love letter.
— Hitesh Mohanlal
