Four major compliance shifts facing foreign firms on 1 July 2026

International businesses in Australia will face major payroll, anti-money-laundering, and climate-reporting reforms from 1 July 2026, triggering one of the country’s largest single-date compliance overhauls in years. 

The reforms are the result of the latest Federal Budget announcement and will affect employers, professional service providers, and medium-sized entities operating in Australia, including many foreign-owned subsidiaries.

Superannuation rate rises to 12%

The compulsory Superannuation Guarantee rate will increase from 11.5% to 12% from the first pay run on or after 1 July 2026. 

Employers are legally required to contribute superannuation into employees’ retirement savings funds in addition to salaries and wages. The increase marks the final legislated rise to the superannuation contribution rate after years of gradual increases. Businesses must ensure payroll systems are updated before July 2026 to apply the higher contribution rate correctly. 

Employers using salary packages that are inclusive of superannuation may also need to review employment contracts to avoid reducing employees’ base salaries. 

Payday Super ends quarterly payments

Employers will also lose the ability to remit superannuation quarterly under new ‘Payday Super’ reforms commencing on 1 July 2026. Businesses must instead pay super contributions at the same time as employee wages. Companies running weekly or fortnightly payrolls will therefore need to remit super weekly or fortnightly. 

The Australian Taxation Office (ATO), the Australian Government agency responsible for administering and enforcing Australia’s federal taxation and superannuation systems, will monitor compliance through the Single Touch Payroll system, giving regulators near real-time visibility over unpaid or delayed super contributions. 

The reform is expected to affect business cash flow because employers will no longer retain accrued super liabilities for up to three months before remittance. Payroll providers and super clearing houses are preparing for the transition as businesses review payment systems and cash-flow arrangements ahead of the deadline. 

Australia widens scope of anti-money-laundering law

Australia’s anti-money-laundering and counter-terrorism-financing regime will expand significantly from 1 July 2026 under the so-called ‘Tranche 2’ reforms. 

The changes will extend regulatory obligations beyond banks and financial institutions to accountants, lawyers, conveyancers, real estate agents, trust and company service providers, and dealers in precious metals and stones. The reforms fall under the Anti-Money Laundering and Counter-Terrorism Financing Act and will be overseen by the Australian Transaction Reports and Analysis Centre, known as AUSTRAC. 

Industry estimates indicate the number of regulated entities will increase from approximately 17,000 to about 100,000. The reforms will require Australian advisers to conduct stricter identity verification and beneficial-ownership checks, particularly during property transactions, mergers and acquisitions, and corporate restructures. 

Businesses providing trust or company services to related entities may also need to enrol with AUSTRAC. AUSTRAC enrolment opened on 31 March 2026 and must be completed by 29 July 2026. 

Climate reporting expands to medium-sized entities

Mandatory climate-related financial reporting requirements will also broaden from the 2026-2027 financial year. 

Businesses meeting at least two of three thresholds, $200 million in revenue, AUD$500 million in assets, or 250 employees, will fall within scope under Australia’s AASB S2 climate disclosure framework, Australia’s mandatory standard for reporting climate-related financial information. The reporting obligations align with the international IFRS S2 climate-reporting standard. 

Affected entities must report direct emissions and energy-related emissions during the first year of implementation, while mandatory reporting of value-chain emissions will begin after a one-year transition period. Many foreign-owned Australian subsidiaries are expected to fall within scope even if their overseas parent entities do not currently report under IFRS S2 requirements in their home jurisdictions. 

Continuous compliance becomes the new standard

The reforms collectively signal a broader shift towards continuous regulatory monitoring and real-time compliance reporting in Australia. The ATO will gain faster visibility over payroll and superannuation compliance, while AUSTRAC will oversee a substantially larger network of regulated professional transactions and ownership structures. Climate disclosures will also become increasingly integrated into mainstream financial reporting.

International businesses operating in Australia must review payroll systems, beneficial-ownership documentation, and climate-reporting readiness well before the 1 July 2026 commencement date.

 Last updated: 15th May 2026

About the Author

Ro Elvinia is ABN Australia's Customer Success and Marketing Manager. She holds a bachelor’s degree in mass communication, majoring in journalism, and also has an academic background in civil engineering. With over a decade of experience in professional writing and a background spanning journalism, Australian immigration, and business services, Ro brings a unique mix of communication and analytical expertise. She works closely with international clients and contributes to ABN Australia's content strategy, helping global businesses stay informed and confident as they navigate the Australian market.