--- title: Federal Budget 2026 - Business and employers description: Discover key updates from the Federal Budget 2026, including permanent changes to the instant asset write-off, FBT exemptions for electric cars, and more. image: https://insights.wlm.com.au/hubfs/What%20the%20New%20Div%20296%20Tax%20Means%20for%20Large%20Super%20Balances.png --- [![WLM_Logo_RGB_Orn50](https://insights.wlm.com.au/hs-fs/hubfs/WLM_Logo_RGB_Orn50.png?width=521&height=169&name=WLM_Logo_RGB_Orn50.png "WLM_Logo_RGB_Orn50")](http://wlm.com.au/) - [About](https://www.wlm.com.au/about/) - [Services](https://www.wlm.com.au/services/) - [Tax & Compliance](https://www.wlm.com.au/services/tax-and-compliance/) - [Strategy & Advice](https://www.wlm.com.au/services/strategy-and-advice/) - [Clients](https://www.wlm.com.au/clients/) - [Construction & Trades](https://www.wlm.com.au/clients/construction/) - [Family Business](https://www.wlm.com.au/clients/family-business/) - [Insurance & Financial Services](https://www.wlm.com.au/clients/insurance-and-financial-services/) - [Renewable Energy & Environment](https://www.wlm.com.au/clients/renewable-energy-and-environment/) - [Service-based & Other Business](https://www.wlm.com.au/clients/service-based-and-other-business/) - [Insights & Case Studies](https://insights.wlm.com.au/blog) - [Blog](https://insights.wlm.com.au/blog) - [Buying a property with a business partner](https://explore.wlm.com.au/buying_a_property_with_a_business_partner_download) - [How to minimise tax & risk with business structure](https://explore.wlm.com.au/business-structure-whitepaper-download) - [Contact](https://www.wlm.com.au/contact/) [Login](https://clientlogin-us2.karbonhq.com/4Frhz6cPZq6r) - [About](https://www.wlm.com.au/about/) - [Services](https://www.wlm.com.au/services/) - [Tax & Compliance](https://www.wlm.com.au/services/tax-and-compliance/) - [Strategy & Advice](https://www.wlm.com.au/services/strategy-and-advice/) - [Clients](https://www.wlm.com.au/clients/) - [Construction & Trades](https://www.wlm.com.au/clients/construction/) - [Family Business](https://www.wlm.com.au/clients/family-business/) - [Insurance & Financial Services](https://www.wlm.com.au/clients/insurance-and-financial-services/) - [Renewable Energy & Environment](https://www.wlm.com.au/clients/renewable-energy-and-environment/) - [Service-based & Other Business](https://www.wlm.com.au/clients/service-based-and-other-business/) - [Insights & Case Studies](https://insights.wlm.com.au/blog) - [Blog](https://insights.wlm.com.au/blog) - [Buying a property with a business partner](https://explore.wlm.com.au/buying_a_property_with_a_business_partner_download) - [How to minimise tax & risk with business structure](https://explore.wlm.com.au/business-structure-whitepaper-download) - [Contact](https://www.wlm.com.au/contact/) # News, views and more ![Amanda Rogers](https://insights.wlm.com.au/blog/Amanda%20Rogers) **Amanda Rogers** 13 May 2026 — 5 min read ### Share [mailto:?subject=Federal%20Budget%202026%20-%20Business%20and%20employers&body=https://insights.wlm.com.au/blog/federal-budget-2026-business-and-employers](mailto:?subject=Federal%20Budget%202026%20-%20Business%20and%20employers&body=https://insights.wlm.com.au/blog/federal-budget-2026-business-and-employers) [mailto:?subject=Federal%20Budget%202026%20-%20Business%20and%20employers&body=https://insights.wlm.com.au/blog/federal-budget-2026-business-and-employers](mailto:?subject=Federal%20Budget%202026%20-%20Business%20and%20employers&body=https://insights.wlm.com.au/blog/federal-budget-2026-business-and-employers) ![Federal Budget 2026 - Business and employers](https://insights.wlm.com.au/hubfs/What%20the%20New%20Div%20296%20Tax%20Means%20for%20Large%20Super%20Balances.png) ## Federal Budget 2026 - Business and employers The 2026 Federal Budget introduces a number of important tax and business measures that employers, business owners and advisers should have on their radar. From the permanent increase to the instant asset write-off threshold to changes affecting electric vehicle FBT concessions, company loss relief, PAYG instalments and R&D incentives, the announcements may create both opportunities and planning considerations. In this article, we highlight the key measures and what they could mean for your business. ### Instant asset write-off **Start date:** 1 July 2026 The Government has announced that the cost threshold for the purpose of applying the instant asset write-off for small business entities will be permanently increased to $20,000 from 1 July 2026. The instant asset write-off allows eligible small business entities with aggregated turnover of less than $10 million to claim an immediate deduction for the full cost of depreciating assets which cost less than a specified dollar threshold. While the default threshold is $1,000, higher temporary thresholds have been implemented on a year-to year basis since 2015, often leading to confusion and uncertainty. A permanent increase in the cost threshold to $20,000 should be welcome news to small business taxpayers who will have a greater level of confidence when it comes to investing in new plant or equipment or upgrading business assets. In order to qualify for the immediate deduction, the cost of the asset must be less than $20,000, after subtracting any GST credits that can be claimed. The cost threshold applies on an asset-by-asset basis, so an immediate deduction could potentially apply to multiple assets that are purchased for less than $20,000 in a particular income year, even if the aggregated cost of those assets is $20,000 or more. Assets that cost $20,000 or more can continue to be added to a small business pool. Just a quick reminder, the threshold for the current income year that ends on 30 June 2026 had already been increased to $20,000. | **Resources:** [Backing small businesses to grow,](https://budget.gov.au/content/factsheets/download/factsheet-backing-small-business.pdf)[compete and build resilience](https://budget.gov.au/content/factsheets/download/factsheet-backing-small-business.pdf) | | --- | ### FBT on electric cars **Start date: 1 April 2027** On 5 May 2026 the Government announced that the FBT exemption for electric cars would be gradually scaled back over the next few years. The FBT exemption for electric cars was introduced in the 2022-23 income year as part of a broader initiative to reduce the cost of electric vehicles and increase uptake. While the exemption has been phased out for plug-in hybrid electric vehicles from 1 April 2025 (with pre-existing arrangements still qualifying for the exemption in some cases), a full FBT exemption still applies to battery electric vehicles and hydrogen fuel cell electric vehicles that are provided as fringe benefits to employees if certain conditions can be satisfied. However, the Government is planning to progressively reduce the scope of the FBT exemption on the following basis: - The FBT exemption will continue to operate in its current form until 31 March 2027. - From 1 April 2027 to 31 March 2029 the full FBT exemption will only be available if the car costs $75,000 or less. Electric cars above this threshold but costing less than the luxury car tax (LCT) threshold for fuel-efficient cars will receive a 25% FBT discount. - From 1 April 2029 all electric cars costing less than the LCT threshold will receive a 25% FBT discount. The Government indicates that existing lease arrangements won’t be impacted by these changes. When an electric car is provided to an employee and it qualifies for concessional FBT treatment under these measures it will still be necessary for employers to calculate the reportable fringe benefits amount, ignoring the application of the FBT exemption or discount. This can impact on other areas of the tax and social security systems. | **Resources:** [Fairer tax treatment to encourage affordable EVs](https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/fairer-tax-treatment-encourage-affordable-evs) | | --- | ### Loss carry back for companies **Start date:** 1 July 2026 For income years commencing on or after 1 July 2026 the Government will allow companies with aggregated annual global turnover of less than $1 billion to carry back a tax loss and offset it against tax paid up to two years earlier. The ability to carry back a loss will only apply to tax losses (not capital losses) and will be limited by the company’s franking account balance. ### Loss refunds for small start-up companies **Start date:** 1 July 2028 Start‑up companies with aggregated annual turnover of less than $10 million that generate a tax loss in their first two years of operation will be able to utilise the loss to generate a refundable tax offset. The offset will be limited to the value of fringe benefits tax and withholding tax on wages paid in respect of Australian employees in the loss year. ### PAYG instalments **Start date:** 1 July 2027 The Government will provide funding to the ATO to expand its pilot of dynamic PAYG instalment calculations. From 1 July 2027, small and medium businesses will be able to opt in to reporting and paying PAYG instalments monthly and will be able to use an ATO-approved calculation that is embedded in accounting software to calculate and vary instalments. R&D tax incentive **Start date:** 1 July 2028 The Government will reform the Research and Development (R&D) Tax Incentive which provides a tax offset for eligible companies that undertake R&D activities. While the Government is planning to increase the tax offset rate for core R&D expenditure, supporting R&D expenditure will no longer qualify and the minimum amount of expenditure that must be incurred in an income year to qualify for the offset will be increased from $20,000 to $50,000 (with some limited exceptions). ### Minimum tax for multinationals **Start date:** 1 January 2026 The Government will amend Australia’s global and domestic minimum tax legislation as part of broader reforms to the international corporate tax system. ### Need help navigating the budget changes? The 2026 Federal Budget introduces a range of measures that could affect your [business’s tax](https://www.wlm.com.au/services/tax-and-compliance/business-tax/) position, investment decisions and cash flow planning. If you’d like to understand what these changes mean for your business and where the opportunities or risks may be, [contact WLM](https://www.wlm.com.au/contact/) to discuss your next steps.    [![New call-to-action](https://hubspot-no-cache-ap1-prod.s3.amazonaws.com/cta/default/6037207/ab7a845a-2c8f-48f4-b519-0dd382ad98e6.png)](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/6037207/ab7a845a-2c8f-48f4-b519-0dd382ad98e6) ##### Make a comment [Previous](https://insights.wlm.com.au/blog/government-to-wind-back-electric-vehicle-fbt-exemption-in-three-stages) [Next](https://insights.wlm.com.au/blog/federal-budget-2026-investors) ## Wealth matters. Ask us how we can help you boost yours. 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