If you live in Australia, especially in Perth, you may have wondered how to keep more of your hard-earned money when it’s time to pay tax.
You’re in the right place!
With the 2025 Federal Budget introducing changes to superannuation caps and small business write-offs, tax planning has never been more critical.
Tax planning strategy in Australia isn’t just for rich people; it can help everyone, whether you’re a tradie, small business owner, or someone who earns a high income.
Tax planning in Australia is like having a good mate who knows all the rules; it helps you legally reduce what you owe the ATO while staying completely above board.
The best part? With ISM Accountants and when plan done right, it puts money back into your pocket that you can use for the things that matter most to you and your family.
What is Tax Planning?
Tax planning is simply about being smart with your money throughout the year, not just scrambling at tax time. It’s the art of arranging your financial affairs in a way that minimises your tax bill legally. Think of it as playing chess with the ATO, you’re always thinking a few moves ahead.
There are two major types of tax planning strategies.
Short-term planning focuses on what you can do right now, like claiming work expenses or making super contributions before June 30.
Long-term tax planning looks at the bigger picture, things like investment structures, superannuation strategies, and business planning that can save you thousands over the years.
Strategy | Short-Term (EOFY Focus) | Long-Term (5–10 Years) |
Super contributions | Top up before EOFY for deductions | Maximise concessional/non-concessional caps |
Investments | Defer CGT by holding >12 months | Build tax-effective portfolio |
Business expenses | Prepay rent/utilities | Structure as trust/company |
Why Every Perth Resident Needs Tax Planning?
Whether you’re a FIFO worker, small business owner, or office worker in the CBD, tax planning can help you legally reduce your tax liability, maximise your deductions, and ensure you’re compliant with ATO requirements. It’s not about avoiding tax, it’s about not paying more than you legally have to.
Common Tax Planning Strategy in australia
Let’s dive into some strategies that work for most Australians. These are the smart tax planning that can make a real difference to your bottom line.
Maximising Tax Deductions
This is where most people start and there’s good reason for it. Common tax deductions in Australia residents can claim include work-related expenses like uniforms, tools, home office costs, and car expenses. The key is keeping good records throughout the year, not trying to remember everything in June.
Using Tax Offsets Effectively
Tax offsets are like finding money in your old jeans; they directly reduce the tax you pay. Popular offsets include the low and middle income tax offset, private health insurance rebate, and spouse super contribution offset.
Superannuation Tax Benefits
Your superannuation isn’t just for retirement, it’s one of the most tax-effective ways to save money. Extra contributions to super can reduce your taxable income while building your nest egg. It’s like getting paid to save for your future.
With the mining boom affecting Perth’s economy, many residents have variable incomes. Time your tax-deductible expenses and super contributions around your highest earning periods to maximise the tax benefit.
Tax Planning Strategies in Australia for High-Income Earners
If you’re earning the big bucks (we’re talking $180,000+ here), the ATO takes a bigger slice of your pie. But don’t worry, there are legitimate ways to reduce that tax burden.
Investment Bonds for Tax Efficiency
Investment bonds are like a tax-paid investment where you don’t pay personal tax on earnings if held for 10 years. They’re perfect for high earners looking to invest without adding to their current tax bill.
Salary Packaging Options
Salary packaging lets you pay for certain expenses with pre-tax dollars. This could include car leases, laptops, or even charitable donations, effectively reducing your taxable income.
Capital Gains Tax Planning
When you sell shares or real estate is very important. You can receive a 50% capital gains tax rebate if you keep your investment for more than a year before selling. This implies that only half of your profit is subject to taxes. The tax on your gains is reduced by half.
Managing Division 293 tax on superannuation contributions
- High-income earners (income + concessional contributions > $250,000) may face an extra 15% tax on super contributions, known as Division 293 tax.
- Example: A Perth-based executive earning $280,000 contributes $20,000 into super. They’ll pay an extra $3,000 (15% of $20,000) in Division 293 tax. With proper planning, such as salary packaging and timing contributions, the impact can be reduced.
Recommended Read: How to Reduce Taxable Income?
Tax Planning Strategies in Australia for Small Businesses
Running a small business in Australia comes with unique opportunities to reduce your tax bill. The government actually wants to help small businesses succeed, so they’ve created some ripper concessions.
Small Business Tax Concessions
Small businesses in Australia with less than $10 million in yearly sales can benefit from a lower company tax rate. But the lower company tax rate (25%) applies to base rate entities with turnover < $50m. They also get simpler rules for managing their stock and can deduct start-up costs right away. These tax breaks can save small business owners thousands of dollars each year.
Instant Asset Write-Off
You can immediately write off eligible business assets rather than depreciating them over years. Buy a work ute, computer, or tools, and claim the full amount in the same year.
2025 Budget: Instant asset write-off cap extended at $20,000 for businesses with turnover < $10m until June 30, 2025.
Checklist (EOFY ready):
- Claim instant asset write-off before June 30
- Prepay rent, insurance, or subscriptions
- Pay super for employees early
- Keep detailed logbooks for vehicles
Important Reminder
Always keep detailed records for all business expenses. The ATO loves paperwork, and good record-keeping is your best defense in an audit.
Recommended Read: Small Business Tax Tips
Tax Planning Strategies in Australia for Property Investors
Property investment is very popular in Australia, and tax planning helps you make it profitable. Whether you’re buying your first investment property or adding more to your collection, understanding how tax works is important. Knowing which expenses you can claim and how capital gains tax works can save you money and increase your returns.
Negative Gearing Benefits and Risks
Negative gearing means that the costs of owning a rental property, like mortgage interest and maintenance, are higher than the rent you earn from it. This means you are making a loss. But you can use this loss to reduce the tax you pay on your other income.
Many people choose negative gearing because it lowers their tax bill while waiting for the property to increase in value. Just remember, since you are losing money at first, it’s important to make sure the property is likely to grow in value over time.
Example calculation:
If your rental earns $25,000 but expenses are $30,000, the $5,000 loss can offset salary income, potentially saving $1,600 in tax (assuming 32.5% tax bracket).
Capital Gains Tax Planning
When you sell an investment property, you’ll pay capital gains tax on the profit. But hold it for more than 12 months and you get that sweet 50% discount. Time your sales carefully, especially if you have capital losses to offset gains.
End of Financial Year (EOFY) Strategies
June 30 is like New Year’s Eve for tax planning, it’s your last chance to make moves that affect this year’s tax bill. Here’s what smart Aussies do in the lead-up to EOFY.
- Review your income and expenses to see where you stand
- Bring forward any deductible expenses you were planning to make
- Defer income where possible (like bonuses) to the next financial year
- Make additional superannuation contributions before June 30
- Take advantage of any remaining instant asset write-off opportunities
Don’t Leave It Too Late!
The biggest mistake people make is leaving everything until the last minute. Start your EOFY planning in May to avoid the rush and make sure you don’t miss any opportunities.
Recommended Read: How to Prepare for Tax Season in Australia?
Advanced & Niche Tax Planning Strategies
Once you’ve mastered the basics, there are more sophisticated strategies for those with complex financial situations or significant wealth.
Estate Planning & Wealth Transfer
Planning how your wealth passes to the next generation can save massive amounts of tax. Family trusts, binding death benefit nominations for super, and gifting strategies all play a role.
International Tax Planning
With Perth’s strong international connections, many residents have overseas income or are expats. Understanding Australia’s tax residency rules and double tax agreements is crucial to avoid paying tax twice.
Legal Considerations & ATO Compliance
Here’s the thing about tax planning, it must be legal. The ATO has sophisticated systems to detect dodgy claims, and the penalties for getting it wrong are severe.
Always follow ATO guidelines and regulations. Keep accurate records for everything you claim. When in doubt, get professional advice from a registered tax agent. The cost of good advice is nothing compared to the cost of getting it wrong.
ATO Penalties Can Be Severe
Penalties can include fines, interest on unpaid tax, and in serious cases, prosecution. Play it straight and you’ll sleep well at night knowing you’re doing the right thing.
Book a free 30-min consultation with a ISM Accountants tax consultant.
Steps to Create a Tax Planning Strategy
Ready to get started? Here’s your roadmap to creating a tax planning strategy that works for your situation
- Assess Your Current Financial Situation: Look at your income, expenses, investments, and goals
- Identify Tax-Saving Opportunities: What deductions are you missing? Where can you make improvements?
- Plan for Both Short and Long-Term Goals: Balance immediate tax savings with long-term wealth building
- Get Professional Help: A good accountant pays for themselves many times over
- Review and Adjust Regularly: Australian tax laws change, and so does your situation
Common Mistakes to Avoid in Tax Planning
Here are the most common tax planning blunders that cost Aussies thousands each year.
- Waiting until the end of the financial year to think about tax
- Claiming deductions without proper records
- Overlooking superannuation contribution opportunities
- Missing out on small business concessions
- Not getting professional advice for complex situations
Recommended Read: Claiming Self Education Expenses in Tax Returns
Benefits of Effective Tax Planning
When you get tax planning right, the benefits go way beyond just saving money on tax. You’ll have more cash flow for the things that matter, build wealth faster, and have peace of mind knowing you’re doing everything by the book.
Effective tax planning also helps you make better financial decisions throughout the year. Instead of reactive scrambling, you’ll be proactive and strategic with your money.
Summary
In Australia, tax planning involves more than just lowering taxes; it also means making wise decisions to manage the future of your finances. There is a plan for everyone, whether it involves making wise investments or taking easy deductions.
The key is to plan ahead, not wait until the last minute. Start early in the financial year, keep good records, and get help if things get complicated. The goal is not to avoid tax, but to make sure you only pay what you have to by law.
Ready to Take Control of Your Tax Strategy?
Don’t let another financial year slip by without maximising your tax position. The strategies we’ve covered could save you thousands of dollars, but they work best when implemented properly.
Whether you’re an individual looking to maximise deductions, a small business owner wanting to take advantage of concessions, or a high-income earner seeking sophisticated strategies, professional guidance makes all the difference. Reach out to ISM Accountant for better and effective tax planning strategy in Australia.
Frequently Asked Questions (FAQ)
Tax planning in Australia is all about organising your financial affairs in a way that minimises your tax liability within the law. It involves using legal methods to reduce the amount of tax you pay, like claiming deductions and making smart investments.
Common strategies include salary sacrificing, making extra super contributions, claiming work-related expenses, and investing in negatively geared properties. These help reduce taxable income and maximise your tax refunds.
High-income earners can reduce tax by utilising salary packaging, investing in superannuation, and making use of tax-effective investments like negatively geared properties or trusts. It’s important to stay within legal boundaries to avoid penalties.
Small businesses often benefit from claiming all eligible deductions, using instant asset write-offs, and structuring their business efficiently. Keeping good records and seeking professional advice can also make a big difference.
Yes, certain super contributions, like concessional (before-tax) contributions, are tax-deductible up to the annual cap. This helps reduce your taxable income while boosting your retirement savings.
Negative gearing means your rental property expenses exceed the rental income, creating a loss that you can offset against other income to reduce your tax. It’s a popular strategy for property investors looking to grow wealth over time.
Yes, family trusts can help in tax planning. The tax can be reduced by distributeing income among family members in lower tax brackets. They also offer asset protection and flexibility in managing investments.
Penalties can include fines, interest on unpaid tax, and in serious cases, prosecution. It’s best to stay compliant by lodging returns on time and keeping accurate records to avoid any trouble with the ATO.
The 2025 Budget introduced several changes impacting tax planning, including adjustments to personal income tax brackets, increased thresholds for tax offsets, and modifications to superannuation contribution limits. These changes aim to provide tax relief for middle-income earners and encourage retirement savings, so it’s important to review your tax strategy accordingly.
