Australia’s tax year runs from 1 July to 30 June — this is called the financial year or income year. All income earned and expenses incurred within this period are reported in that year’s tax return. The tax year for FY2025–26 runs from 1 July 2025 to 30 June 2026.
Why 1 July to 30 June?
The Australian financial year is one of the few globally that does not align with the calendar year. It runs from 1 July to 30 June for historical reasons dating back to British colonial administration. While there have occasionally been proposals to move to a calendar year, the current system remains in place.
This means that when the ATO refers to “FY2025–26” or the “2025–26 income year,” it is the period from 1 July 2025 to 30 June 2026.
Key Dates in the Australian Tax Year
| Date | What happens |
|---|---|
| 1 July | New financial year begins |
| 31 July | ATO opens myTax for lodgement of previous year’s return |
| 14 August | Employers must finalise employee income statements (via Single Touch Payroll) |
| 31 October | Individual tax return deadline (if lodging yourself) |
| 1 July – 31 October | Period when most individual Australians lodge their returns |
| May (following year) | Extended deadline for tax agent clients |
| 28 October, 28 February, 28 April, 28 July | Quarterly PAYG instalment due dates |
What the Financial Year Means for You
Income is allocated to the year it was received
Income (wages, dividends, interest, rent) is generally assessable in the year it is received or credited — not necessarily when it was earned. A salary payment made on 30 June is income for that year. A payment made on 1 July belongs to the next year.
Expenses are deductible when incurred
Work-related expenses are generally deductible in the year the obligation to pay arose — not when you actually paid. If you bought tools in June and used them for work, the deduction belongs to that financial year.
Asset purchases and the CGT timing rule
For CGT purposes, the date of acquisition and disposal matters for calculating the 12-month holding period for the 50% discount. Assets acquired and sold within the same financial year are not eligible for the discount. An asset acquired on 1 July 2024 and sold on 2 July 2025 qualifies.
Different Year-End Rules for Some Entities
Most individuals and small businesses use the standard 1 July – 30 June year. However:
- Certain businesses may apply to the ATO for a substituted accounting period (different year-end)
- Foreign companies operating in Australia may align their accounts with their home country’s financial year
- New migrants who arrive mid-year are only an Australian tax resident from their arrival date — they have a partial year
Tax Planning Around Year-End
The 30 June cutoff creates natural planning opportunities. Decisions about the timing of income and deductions — deferring income to the next year or bringing forward deductible expenses — can affect your current year’s tax position. Legitimate year-end strategies include:
- Prepaying deductible expenses (such as investment loan interest) before 30 June
- Making personal super contributions before 30 June to claim a deduction in the current year
- Realising capital losses to offset capital gains before 30 June
- Timing the sale of assets to fall in the year with the lower tax liability
Tax planning must reflect genuine commercial decisions — not arrangements designed purely to avoid tax. Professional advice is recommended for complex timing decisions.
Frequently Asked Questions
When does the Australian financial year end? 30 June. The new financial year begins on 1 July. The ATO refers to years as “FY2025–26” meaning 1 July 2025 to 30 June 2026.
Can I lodge my tax return before 30 June? No. The tax year must have ended before you can lodge. The ATO generally opens myTax for lodgement in late July after employers have finalised payment summaries (income statements via Single Touch Payroll).
What is the difference between the income year and the financial year? They refer to the same period — 1 July to 30 June. “Income year” is the ATO’s technical term; “financial year” is the common usage. Both mean FY2025–26 covers 1 July 2025 to 30 June 2026.
If I receive a pay cheque in late June for work done in July, which year is it? Income is generally attributed to the year it is received. If the cheque is received (or deposited) on 28 June, it is income for the year ending 30 June. If it is received on 2 July, it is income for the next year.
This article provides general tax information. For advice tailored to your situation, speak with a registered tax agent or accountant. Find one through the Tax Practitioners Board register.