New Financial Year, New Rules: What You Need to Know About ATO Interest and Super Penalties from 1 July 2025

As we move into the 2025–2026 financial year, it’s important to be aware of some key changes that may impact your business’s tax planning and compliance. Two major updates are taking effect from 1 July 2025 – one relating to ATO interest charges and another that reinforces the importance of paying employee superannuation on time.

Here’s what you need to know:

1. ATO Interest Charges Will No Longer Be Tax Deductible

Previously, if you paid General Interest Charges (GIC) or Shortfall Interest Charges (SIC) to the ATO due to late or underpaid tax, those charges could often be claimed as a tax deduction. That’s changing.

What’s changing?

From 1 July 2025, GIC and SIC will no longer be tax deductible – even if the original tax debt occurred before this date.

What this means for you:

• Higher costs if you owe tax: These interest charges will now be a direct hit to your bottom line, with no deduction to soften the blow.

• Stricter financial consequences: The true cost of carrying tax debt just got more expensive.

Now more than ever, it’s essential to stay on top of your BAS, tax returns, and payment deadlines.

2. Superannuation Guarantee Charge (SGC) Still Not Deductible

While this isn’t a new change, it’s worth a timely reminder: if you miss a superannuation payment – whether it’s late, short, or sent to the wrong fund – you’ll face the Superannuation Guarantee Charge, which has never been tax deductible.

The SGC includes:

• The unpaid super amount (calculated on total salary and wages – including overtime)

• 10% interest, calculated from the start of the relevant quarter

• A $20 admin fee per employee per quarter

That’s a costly mistake – and one that also can’t be deducted at tax time.

The Bottom Line: Timely Compliance Matters More Than Ever

These updates signal a clear message from the ATO: late payments – whether for tax or super – come with real consequences.

Avoiding these non-deductible costs starts with strong bookkeeping, accurate reporting, and meeting deadlines.

If you’re unsure how these changes might affect your business, or you want help putting systems in place to stay compliant, get in touch with Masttocs Bookkeeping Services. We’re here to make sure your finances stay in check – so you can get back to doing what you do best.