The Situation
ABC Pty Ltd is a family-owned company operated by John and Sally (husband and wife), each drawing a $125,000 salary. The company turns over less than $10 million with a net profit of $510,525. On top of their wages, both shareholders had $40,000 each in capital gains from an investment property sale, bringing the group’s combined projected income to $840,525.
Without any planning, the estimated total tax bill was $157,431 – an average rate of 26% across the group.
What We Did
This plan was designed around a bigger idea: using company profits to build John and Sally’s personal wealth through superannuation, while reducing the group’s overall tax bill at the same time.
Brought forward a machinery purchase using the Instant Asset Write-Off: the business needed new machinery, so we brought the $18,000 purchase forward to before 30 June. As a small business, ABC Pty Ltd could immediately write off the full cost, saving $4,500 in company tax.
Wrote off bad debts: $6,580 in unrecoverable debts were formally written off before year end, reducing company taxable income and saving a further $1,645.
Paid employee super before 30 June: the company brought forward $25,650 in employee superannuation contributions, securing the deduction in the 2026 financial year. Tax saving: $6,412.
Declared a $90,000 franked dividend: rather than leaving profits sitting in the company as retained earnings, ABC Pty Ltd declared a franked dividend to give John and Sally the cash to fund their personal super contributions. The franking credits attached also helped offset their personal tax.
Made concessional super contributions up to the annual cap: both John and Sally made an additional $15,000 each in personal deductible contributions, topping up to the $30,000 concessional cap on top of the $15,000 already covered by their Superannuation Guarantee (SGC) contributions. Tax saving: $5,400.
Used carried-forward super caps from prior years: both had unused concessional cap space from previous years, allowing a further $30,000 each to be contributed at a flat 15% super tax rate rather than their marginal rate. Tax saving: $10,800.
Crystallised capital losses to offset the property gain: by selling $5,000 worth of underperforming shares before 30 June, John and Sally offset part of their capital gain from the investment property sale. Tax saving: $1,800.
The Result
Base Scenario
| TAXPAYER | TAXABLE INCOME | ($) TAX ASSESSED | TAX CREDITS + (PAYG $) | PAYABLE / (REFUND) |
|---|---|---|---|---|
| Company PL | $510,525 | $127,631 | $0 | $127,631 |
| Sally | $165,000 | $45,688 | ($30,788) | $14,900 |
| John | $165,000 | $45,688 | ($30,788) | $14,900 |
| ESTIMATED TOTAL | $840,525 | $219,007 | ($61,576) | $157,431 |
Tax Planning Strategies (RECOMMENDED)
With this scenario you will save $34,758 more tax than “Base Scenario”.
| TAXPAYER | TAXABLE INCOME | ($) TAX ASSESSED | TAX CREDITS + (PAYG $) | PAYABLE / (REFUND) |
|---|---|---|---|---|
| Company PL | $460,295 | $115,073 | $0 | $115,073 |
| Sally | $175,000 | $49,588 | ($45,788) | $3,800 |
| John | $175,000 | $49,588 | ($45,788) | $3,800 |
| ESTIMATED TOTAL | $810,295 | $214,249 | ($91,576) | $122,673 |
Total tax saved: $34,758.
*The average rate appears marginally higher after planning because the dividend increases John and Sally’s personal taxable income – however the overall tax payable across the group is significantly lower, and $90,000 has been directed into superannuation in the process.
The Takeaway
This wasn’t just a tax exercise. By strategically using company profits to fund superannuation, ABC Pty Ltd reduced the group’s tax bill by $34,758 while building John and Sally’s retirement savings. Every strategy was legitimate, timed correctly, and made the most of what the 2026 financial year had to offer.
If you’d like to explore what strategies might apply to your situation before year end, book a 15-minute call with our team.
