On 11 September the Treasurer released exposure draft legislation for a bundle of 2026-27 Budget tax measures. Much of it is aimed at start-ups and research, but two items matter to everyday small businesses: a monthly option for PAYG instalments, and changes to the fringe benefits tax (FBT) exemption for electric cars. Consultation is open until Monday 28 September 2026.

These are drafts, not law. Details can change before anything reaches Parliament.

Monthly PAYG instalments from 1 July 2027

PAYG instalments are the prepayments many businesses and investors make toward their income tax, usually each quarter. The draft would let taxpayers who pay instalments choose to report and pay monthly from 1 July 2027. Treasury says the aim is to better reflect real time business and investment activity.

For some businesses, twelve smaller payments will be easier to manage than four large ones, especially where income is lumpy. There is also a compliance edge: the draft would require taxpayers with a demonstrated history of not meeting their tax obligations to report and pay monthly.

Electric car FBT exemption: a phased wind back

Since 2022, eligible electric cars provided to employees, often through a novated lease, have been exempt from FBT. The draft phases that down based on when the commitment to provide the car is made:

  • Commitments before 1 April 2027: the existing full exemption continues. Existing arrangements are not affected.
  • Commitments from 1 April 2027 to 31 March 2029: cars with a base value of $75,000 or less keep a 100 per cent discount. Cars above $75,000, up to the fuel efficient car limit, get a 25 per cent FBT discount.
  • Commitments from 1 April 2029: a 25 per cent FBT discount for all eligible electric cars.

The Government says the design gives taxpayers a clear transition path and reduces the risk of market disruption.

Also in the package

The same release includes a new capital gains tax concession for investors in innovative early stage companies, changes to the research and development tax incentive from 1 July 2028, and updated venture capital thresholds from 1 July 2027. If you run a start-up or invest in one, those drafts deserve a separate look.

What to do now

  • Thinking about an electric car through the business? Timing now matters. If the draft becomes law, a commitment made before 1 April 2027 is treated more generously than one made after, particularly for dearer vehicles. Get the numbers run before you sign.
  • Struggle with quarterly instalments? Keep monthly instalments in mind for 2027-28. In the meantime, setting aside tax money weekly achieves much the same result.
  • Behind on lodgments? The proposed mandatory monthly cycle is another reason to get up to date.
  • Have a view? Submissions can be made through the Treasury consultation hub until 28 September.

This is general information only. Speak with your accountant before making vehicle or tax payment decisions.