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Payday Super and SMSFs: What Trustees and Employers Need to Know from 1 July 2026

Posted on: June 16th, 2026

The Australian Government is introducing significant changes to the way superannuation contributions are paid. From 1 July 2026, employers will generally be required to pay superannuation contributions within seven business days of each payday, rather than quarterly.

Known as Payday Super, the reforms are designed to improve the timeliness of superannuation payments and reduce unpaid superannuation across Australia.

While the changes apply to all superannuation funds, there are several important considerations for members of Self-Managed Super Funds (SMSFs).

What is Changing?

Currently, employers are only required to pay Superannuation Guarantee (SG) contributions on a quarterly basis.

Under the new Payday Super rules, employers will generally be required to:

  • Calculate superannuation with each payroll cycle.
  • Report superannuation information more frequently.
  • Pay superannuation contributions within seven business days of payday.

This means employees should receive their superannuation contributions much sooner than under the current system.

What Does This Mean for SMSF Members?

Members who receive employer contributions into an SMSF should ensure that their fund remains fully compliant and capable of receiving contributions.

In particular, SMSFs should ensure that:

  • The fund remains complying.
  • The SMSF Annual Return is lodged on time.
  • The fund’s bank account details are current.
  • The Electronic Service Address (ESA) remains active and operational.
  • Trustee records are up to date.

If an SMSF is unable to receive contributions due to compliance or administration issues, employers may encounter difficulties meeting their Payday Super obligations.

Increased Administrative Activity

One practical consequence of Payday Super is that SMSFs may receive contributions more frequently.

Instead of receiving employer contributions quarterly, trustees may see contributions arriving each pay cycle, such as weekly, fortnightly or monthly.

Trustees should ensure that:

  • Contributions are correctly allocated to member accounts.
  • Contribution records are maintained.
  • Contribution caps are monitored throughout the year.
  • Fund accounting records are kept up to date.

Regular monitoring will become increasingly important as contribution volumes increase.

Importance of Timely Compliance

Payday Super places greater emphasis on maintaining an SMSF’s administrative compliance.

Trustees should ensure that:

  • Annual accounts are prepared promptly.
  • Audits are completed on time.
  • The SMSF Annual Return is lodged by the due date.
  • Changes to trustees or members are properly documented.

Failure to maintain compliance may create difficulties receiving employer contributions and increase regulatory risks.

Opportunities for Members

While the reforms will create additional administrative requirements, they may also provide benefits for SMSF members.

Receiving contributions earlier means:

  • Funds can be invested sooner.
  • Investment earnings may commence earlier.
  • Members have greater visibility over employer contributions.
  • Unpaid superannuation issues may be identified more quickly.

For many members, this will improve transparency and retirement savings outcomes.

How We Can Help

At Kirk Davis Accounting, we assist SMSF trustees with compliance, accounting, taxation and audit requirements.

If you are an SMSF trustee or employer and would like advice on how Payday Super may affect your circumstances, please contact us to discuss your obligations and ensure your fund is ready for the changes commencing on 1 July 2026.

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Reforming RCA Licensing: Addressing ASIC’s Interpretation & Expanding Audit Capacity

Posted on: July 25th, 2025

Background: ASIC’s Interpretation Since 2016

I raise concern over a significant and ongoing inconsistency between ASIC’s current interpretation of the “supervised audits of companies” requirement and the legal position established in Birdseye v ASIC [2006] and Murphy v ASIC [2013].

Both cases confirm that “supervising audits” does not require supervision of staff, but rather substantive oversight of audit engagements—such as determining audit scope, reviewing workpapers, evaluating findings, and ensuring compliance with auditing standards. Regulation 9.2.01(a)(ii) of the Corporations Regulations 2001 retains this same language, yet ASIC now routinely requires evidence of staff supervision—a requirement not supported by legislation or judicial precedent.

Since ASIC’s shift in 2016, following changes to the competency standards and Regulatory Guide 180, this narrower interpretation has imposed a barrier to registration for capable auditors in smaller firms who otherwise meet the legal test. With increasing demand for registered auditors—particularly in areas such as ESG and sustainability assurance—reform is urgently needed to bring ASIC’s licensing approach back into alignment with the law and the realities of modern auditing.

 

Misconceptions and Barriers for Small Firm Auditors

I am concerned that ASIC and the professional accounting bodies may not fully appreciate the diverse roles RCAs perform, particularly outside the context of large pubic listed entities. Over the past 13 months, during the course of my third RCA application, I have identified a number of misconceptions that contribute to unnecessary barriers for competent auditors in sole practices and small firms.

A commonly held belief appears to be that RCAs primarily service large public listed companies and that it is not possible to conduct an audit without staff. In reality, my mentor Richard and I conduct audits across a wide range of entities—including large and small proprietary companies, AFSL holders, and not-for-profits—without employing staff. We are both sole practitioners. Our experience demonstrates that audit quality can be achieved through direct involvement and professional judgement, rather than through delegation to staff.

This misconception has contributed to a structural imbalance in the audit industry. ASIC’s current interpretation of supervision requirements has created a de facto monopoly, where only large firms are positioned to meet the licensing criteria. This outcome is not consistent with the Corporations Act, nor with the case law. As audit manager on all engagements, I have been directly responsible for planning, executing, and supervising audits in accordance with Australian Auditing Standards. In a small-firm environment, this requires hands-on involvement across all stages of the audit—from risk assessment and fieldwork to final reporting. This model not only maintains audit quality but also promotes independence, integrity, and accountability—qualities essential to the profession.

 

Proposed Reform: A Second-Tier RCA Licence

To address this imbalance, I support the introduction of a second-tier Registered Company Auditor (RCA) licence that applies to all entities other than listed public companies. This alternative pathway would recognise the experience and capability of auditors who conduct engagements independently and to a high standard, without the need for staff supervision.

Holders of this second-tier licence would be authorised to conduct audits for a broad range of entities, including:

  • Large proprietary companies (exceeding $20 million in assets, 100 employees, or $50 million in annual turnover),
  • Small proprietary companies,
  • Australian Financial Services Licensees (AFSLs),
  • Unlisted public companies,
  • Australian Credit Licensees,
  • Foreign companies registered in Australia,
  • Charities and not-for-profits registered with the ACNC, and
  • Self-managed superannuation funds (SMSFs).

Eligibility could be based on demonstrated compliance with Australian Auditing Standards, a minimum threshold of relevant audit experience, and professional standing with a recognised body—without requiring the employment or supervision of staff. This framework would maintain integrity and quality while expanding access to the profession.

 

Public Interest Benefits and Policy Alignment

The introduction of a second-tier RCA licence would address several systemic and regulatory barriers that currently restrict access to the audit profession and limit competition. Under ASIC’s current interpretation, auditors must supervise staff to qualify for registration, which effectively excludes competent sole practitioners and small firm auditors who directly oversee audit engagements but operate without employees. This approach diverges from established case law—particularly Birdseye v ASIC and Murphy v ASIC—which confirm that supervision does not require staff oversight. As a result, the current system favours large firms and has contributed to growing market concentration, creating a de facto monopoly on RCA registrations and undermining diversity in the profession.

Reform would deliver significant public benefit. It would improve access to audit services, particularly in regional and underserved areas where small firms are better positioned to support entities such as charities, SMSFs, ACNC-registered organisations, and AFSL holders. It would also support the growing need for assurance in emerging areas like sustainability and ESG reporting. By broadening the licensing pathway, the profession would become more resilient and diverse, reducing systemic risk tied to overreliance on large firms. A second-tier licence with clearly defined scope and standards would preserve audit quality while mitigating risks of market exit, regulatory inconsistency, and continued misalignment with legislative intent.

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Accessibility of ASIC Registered Auditor Status for Small Firms

Posted on: July 25th, 2025

I write to express concern regarding a significant and unresolved inconsistency between ASIC’s current application of the “supervised audits of companies” requirement and the interpretation endorsed by the Administrative Appeals Tribunal in Birdseye v ASIC [2006].

The central issue in Birdseye was the interpretation of the phrase “supervising audits.” Although the legislative framework has since been amended to include more prescriptive hour-based requirements, Regulation 9.2.01(a)(ii) continues to use the same key language: “supervising audits of companies.”

The Birdseye decision addressed the meaning of this phrase, concluding that “supervision” did not require the applicant to have supervised staff, but could instead include substantive oversight of audit engagements—such as determining audit scope, reviewing documentation, evaluating findings, and ensuring compliance with audit standards.

Similarly, in Murphy v ASIC [2013] AATA 810, the Tribunal reinforced that the key consideration is whether the applicant genuinely supervised audits—not merely participated in them or performed review tasks. Importantly, neither decision required supervision of employees or the employment of staff. The focus was, and remains, on the nature and substance of the applicant’s role in overseeing audit engagements.

Since the introduction of the revised Auditing Competency Standard in 2015 and ASIC’s Regulatory Guide 180 in 2016, however, ASIC’s application of this requirement appears to have shifted. The current approach routinely demands evidence of direct staff supervision—a position that is not supported by legislation or case law, including Birdseye and Murphy.

I bring over 20 years of diverse audit experience, including audits of large proprietary companies, public companies, AFSL holders, small proprietary entities, and self-managed superannuation funds. Yet, despite satisfying both the legislative intent and the practical experience requirements of s1280(2) of the Corporations Act 2001, my application has not progressed due to ASIC’s narrow interpretation of “supervision.”

With Australia facing growing demand for registered auditors—particularly with the emergence of sustainability and ESG assurance—the current licensing approach risks unnecessarily excluding competent professionals. I respectfully suggest that reform is urgently needed to ensure that the registration process aligns with both the legal framework and the practical realities of modern auditing.

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Is my client performing R&D?

Posted on: February 15th, 2024

Identifying Research and Development (R&D) opportunities within your clients’ businesses involves a strategic approach that includes understanding your clients’ industries, their business operations, and their growth objectives.

1. Understand Industry Trends and Innovations:

Stay updated on the latest trends, technologies, and innovations within the industries of your clients. For instance, if a client is in the manufacturing sector, advancements in automation or sustainable materials may present R&D opportunities.

2. Analyse Business Operations and Products/Services:

Look for areas where improvements can be made, whether it’s in product development, cost reduction, efficiency enhancement, or entering new markets. These areas could benefit from R&D initiatives.

3. Engage in Strategic Conversations:

Have regular, strategic conversations with your clients about their business goals, challenges, and areas where they seek improvement or growth. Listening carefully can uncover potential opportunities for R&D that align with their objectives.

4. Review Financial Performance:

Analyse your clients’ financial statements to identify areas where R&D could improve profitability or reduce costs. High costs in certain areas may indicate inefficiencies that R&D could address.

5. Assess the Competitive Landscape:

Help your clients assess their position relative to competitors and identify areas where R&D could provide a competitive advantage. This might involve developing new products, enhancing existing offerings, or adopting new technologies to outpace competitors.

6. Identify Funding Opportunities:

Be knowledgeable about government grants, tax incentives, and other funding opportunities available for R&D activities.

7. Promote Collaboration and Partnerships:

Encourage clients to explore partnerships with universities, research institutions, or other companies for R&D projects. These collaborations can provide access to expertise, technologies, and additional resources.

8. Leverage Data and Analytics:

Use data analytics to identify trends, customer needs, and market gaps that R&D can address. Data-driven insights can provide a strong foundation for justifying R&D investments.

By employing these strategies, you can play a crucial role in identifying and fostering R&D opportunities within your clients’ businesses, helping them to innovate, grow, and stay competitive.

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R&D Mid Year Review

Posted on: December 28th, 2023

Hey there, innovative minds! 🚀

As we hit the halfway mark of the year, it’s the perfect time for businesses to pause and reflect on their Research & Development (R&D) journey. Here’s why a mid-year review of your R&D activities is not just good practice, but essential for staying ahead in the game:

🎯 Align with Goals: Ensure your R&D efforts are in sync with your business objectives. Are we on the right path to innovation? Let’s make sure!

💰 Budget Smart: Keep a close eye on your R&D spending. Are we optimizing our resources? This check-in can save you from budgetary surprises down the line.

📈 Track Performance: Assess the progress of your R&D projects. Celebrate the milestones, learn from the setbacks, and keep steering towards success.

🛡️ Risk Management: Identify and mitigate risks early. Stay proactive and be prepared for the unexpected turns in the R&D journey.

🔍 Adapt and Innovate: The world is constantly changing, and so should our R&D strategies. Adaptability is key to staying relevant and competitive.

🤝 Team Spirit: Engage your team in these reviews. Their insights are invaluable, and this collaboration can boost morale and drive towards common goals.

Remember, R&D is the heartbeat of innovation and progress. A mid-year review is not just a checkpoint; it’s a launchpad for the next phase of your groundbreaking work.

Let’s innovate, evaluate, and accelerate! 🌈✨

www.business.gov.au/grants-and-programs/research-and-development-tax-incentive/how-we-check-compliance.

#InnovationLeaders #RDStrategy #MidYearReview #BusinessGrowth #StayAhead #TeamworkMakesTheDreamWork

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The benefits of a foreign business registering a local company in Australia

Posted on: August 12th, 2023

A USA client asked what are the benefit of a USA company registering a local Australian company.

Registering a local company in Australia can offer several benefits for foreign businesses looking to establish a presence in the country. Here are five advantages:

  1. Market Access and Credibility: Registering a local company demonstrates a commitment to the Australian market, which can enhance your credibility and reputation among local customers, partners, and investors. It also allows you to tap into the Australian market’s potential, giving you better access to customers and clients.
  2. Legal and Regulatory Compliance: Operating as a local company ensures that you comply with Australian business laws and regulations. This can help you avoid legal issues, penalties, and complications that might arise from operating as a foreign entity in the country. Registering a local company ensures that you follow all necessary protocols and meet local requirements.
  3. Tax Benefits and Incentives: Registering a local company can offer various tax benefits and incentives that might not be available to foreign entities. Australia has a competitive tax regime with several tax deductions and credits available to local companies. Additionally, you can take advantage of the country’s network of double taxation agreements to potentially reduce the tax burden on international transactions.
  4. Access to Government Support: Many governments provide support and incentives to local businesses, and Australia is no exception. By registering a local company, you can access various government programs, grants, and initiatives aimed at promoting business growth, innovation, and investment.
  5. Ease of Doing Business: Operating as a local company can streamline business operations by eliminating certain bureaucratic hurdles associated with being a foreign entity. Local companies often have smoother interactions with local banks, suppliers, and customers, making it easier to conduct day-to-day business activities.

It’s important to note that while there are numerous benefits to registering a local company, it also comes with responsibilities and costs. Setting up a local entity involves legal procedures, ongoing compliance requirements, and administrative tasks. Before making a decision, it’s advisable to consult with legal and financial experts who can provide tailored advice based on your specific business goals and circumstances.

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ATO STIMULUS

Posted on: March 25th, 2020

Hi All,

There has finally been some clarity put forward by the ATO so I have included a few points below. When we lodge your quarterly BAS for March 2020, June 2020 and September 2020 we can review everything in more detail.

The ATO will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses, delivered through credits in the activity statement system, when eligible businesses lodge their activity statements. If you are eligible, you do not need to separately apply and upon lodgement of your activity statement, your first amount will automatically be credited to your account but no earlier than 28 April 2020.

Eligible entities who received initial cash flow boosts will receive additional cash flow boosts, for the periods June to September 2020, equal to the total amount of initial cash flow boosts received. This will be delivered in either two or four instalments depending on your reporting period.

Eligible businesses must have held an ABN on 12 March 2020 and lodge your activity statement to receive the credit.

Eligible payments include: salary and wages, director fees, voluntary withholding from payments to contractors etc.

In addition, you must also have either:

  • Derived business income in the 2018–19 income year and lodged your 2019 tax return on or before 12 March 2020.
  • Made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020.
  • However, you may still be eligible where you don’t have any income tax assessment for prior year.

Initial cash flow boost

Eligible businesses that withhold tax on their employees’ salary and wages will receive a credit equal to 100% of the amount withheld, up to a maximum of $50,000. The minimum credit will be $10,000, even if the amount required to be withheld is zero. However you will not be eligible to receive any more cash flow boosts until your PAYG withholding exceeds $10,000 over the relevant periods.

Monthly lodgers will receive a credit that is calculated at three times the rate (300 per cent) in the March 2020 activity statement, to align with quarterly lodgers.

The total of all initial cash flow boosts across all of the relevant periods cannot exceed the maximum limit of $50,000. This is a little vague but it looks like the ATO will do a second payment up to $50,000 which will then equal the total of $100,000 overall (as above).

Examples

  1. If you pay a salary of $1,000 for the March 2020 Quarter with $0 withholding on the BAS. The ATO will still provide a credit to you on $10,000 as the minimum payment.
  2. If you pay a salary of $160,000 for the March 2020 Quarter with $50,000 withholding on the BAS. The ATO will provide a credit to you on $50,000 as the maximum payment. There would be no additional tax payable when you lodge your personal tax return with a salary of $160,000 as the company would have withheld the $50,000 PAYG. You can therefore take money out of the company tax free.

Other Considerations

  • Superannuation would still be payable on all salaries made.
  • Business still need to report the salaries through STP.
  • Paying a salary can be more tax effective then paying a dividend (to get the credit).
  • If the salary generate a tax loss, that loss would carry forward to FY2020 which would also be beneficial for the 2020 tax returns.

There is further information here:  https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/

In the meantime please let me know if you have any questions.

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Research and Development (R&D).

Posted on: March 10th, 2020

Who is R&D For?

Many company developing novel products or services will spend hundreds of thousands of dollars, without realising they might be able to get government assistance in the form of an R&D subsidiary through AusIndustry and the ATO.

Who is Eligible?

If you have a company and you are researching and developing a novel product or service, that is you are creating new knowledge, then you should consider applying for the R&D Tax Incentive.

Applicants need to self-assess their eligibility for the R&D Tax Incentive. As a self-assessment program, companies assess for themselves whether their activities satisfy the definition.

What Can You Get?

If you are eligible, you can get a 45% refundable tax offset for eligible companies with an aggregated turnover of less than $20 million per annum.

What Activities are Eligible?

Activities are eligible if they meet the definition of R&D activities. This includes activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that: a) is based on principles of established science; and b) proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions.

Could the Outcomes Have Been Known in Advance?

The definition requires that the outcome of the experiments could not have been known or determined in advance on the basis of current knowledge, information or experience. This requirement will not be satisfied if: a) experiments merely confirm what is already known; or b) the outcome of the experiments could be deduced or determined by a competent professional in the field on the basis of current knowledge, information or experience.

Please also see:

https://www.industry.gov.au/data-and-publications/ausindustry-rd-tax-form-0

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Cryptocurrency Business & Tax

Posted on: February 13th, 2020

Brief Background

Following its establishment in 2013, the Cryptocurrency Exchanges industry has become one of the fastest growing industry in Australia because it caters to rising interest in cryptocurrencies as a form of payment. These opportunities are expected to contribute to growth in enterprise and employee numbers over the next five years.

Cryptocurrency Business

I have worked with Cryptocurrency businesses since they first emerged. While most businesses tend to operate at a loss for the first few years, the ATO allows small businesses operators to offset their businesses losses against their other salary income. This is very advantageous as it enables you to get a tax refund during the early Start-Up state of your business.

There are a few conditions that need to be assessed. For instance if your salary is less than $250,000 and your Cryptocurrency business income is more than $20,000 then any net business loss can be tax deductible resulting in an income tax refund.

Determining if you operating a Cryptocurrency Business can depend on a number of factors. The main one to consider are:

  1. Are you operating for the purpose of making a profit?
  2. Do you have significant and regular transactions?
  3. Are you keeping proper records?
  4. How much capital has been invested?

Cryptocurrency Investor

If you are buying Cryptocurrency with the intention of holding them long-term, then you would usually be an investor and not a business operator. This means than the net proceeds you make from the sale of the Cryptocurrency is treated as a net capital gain instead of ordinary business income.  

A significant difference is that a net capital loss from investing cannot be used to offset other salary income. These net capital losses must be carried forward and offset against future capital gains only.

What To Do?

Make contact with me because I can help you!

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Business Start-Up

Posted on: February 9th, 2020

Do you have a business idea?

The hardest, but more rewarding part of any business is thinking of your idea to pursue. Luckily, the internet and working from home has enabled many people to start a new business that offers an improvement on a current idea. This can include improvements such as offering a cheaper cost alternative or offering a more customer focused approach.

Think about the current offerings and focus on how you can create something better, cheaper or faster.

What do you need to get started?

If you’re starting a new business is very important to keep your costs low. In some instances it can take a few years before the business generates enough income to pay for itself and to provide you with a wage. Therefore I recommend having enough savings so that you can support yourself for a year if needed.

Having a separate part time job can be a great source of supplement income and also provide a necessary distraction from the loneliness that can accompany being self-employed. I also found a part time job can lead you to more customers and be a great source of marketing material (if the secondary job is in a complementary field).

You also need to address any licensing or regulatory requirements for your industry. For example, do you need a degree or additional licensing or industry memberships?

Get some independent feedback.

It’s good to get started so that people can interact with your product or service and see what they think of it. A fresh set of eyes can help point out a problem you might have missed. Plus, these people can become your first customers, especially if you listen to their feedback and adapt your offering accordingly.

You need to be open to both positive and negative feedback and be able to incorporate it back into your business effectively.

Register your business

You need to ensure you select the correct business structure from the onset. If you are starting a small business it can be good to simply register an Australian Business Number (ABN) in your personal name because this is a cheaper and easier approach during start-up.  

Once your business has signs of growth then you should consider registering a private company (Pty Ltd) or setting up a family trust. This is a more expensive option but it will provide considerable income tax advantages and provide the necessary asset protection. For example, if you own your own home then a company structure can help protect that home in the event that anything goes wrong with your business.

You should also consider registering a business name, trademark and website.

Grow your business.

Whether your buy an existing business or start a small business you will need to expand the sales base and make it more profitable.  

As an accountant I have found that working with people in key industries can be great. For example, I found and made friends with a business bankers, a good financial planner, and commercial lawyers as we can refer each other customers. Building personal relationships alongside business relationship meant that people will always think of you and be happy to refer you customers.

Using social media effectively through organic, influencer or paid campaigns can also help build your business and retain customers. You need to provide useful information in a format that people will want to read.

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