The end of the financial year is often treated as a tax exercise. But why?
Business owners review expenses, look for deductions, meet with their accountant, and make decisions designed to improve their tax position before 30 June.
Those conversations are important. But they can also distract from a much larger question:
Is your business becoming more expensive to operate?
For many businesses, the answer is yes.
Wages continue to rise. Superannuation obligations have increased. New requirements such as Payday Super are changing cash flow management. At the same time, many business owners are trying to grow while balancing recruitment challenges, capacity constraints, and increasing operational costs.
That’s why EOFY is more than an opportunity to review your tax position. It’s an opportunity to review how work is being done, where your money is going, and whether your current team structure is helping or hindering growth.
Because while tax is a once-a-year conversation, labour costs affect profitability every single day.
EOFY Has Everyone Looking at the Wrong Numbers
The average small business tax refund is estimated to be around $5,000. For many businesses, that’s enough to feel like a worthwhile EOFY outcome.
But put that figure into context.
A single employee earning $100,000 now costs at least $112,000 per year once compulsory superannuation is included. That doesn’t account for recruitment costs, leave entitlements, training, software, equipment, or management overhead.
This is where EOFY can distort priorities.
Businesses often spend significant time reviewing expenses worth hundreds or thousands of dollars while rarely applying the same scrutiny to their largest cost category.
Labour.
The issue isn’t simply what employees are paid. It’s whether the work being done justifies the cost of the people doing it.
That’s an important distinction because profitability is rarely determined by a forgotten deduction or an unclaimed receipt. More often, it’s determined by how efficiently work flows through the business and whether high-value employees are spending their time on high-value activities.
Insight
Australia’s small business tax gap is estimated at $17.7 billion, yet lost productivity and inefficient use of staff often have a far greater impact on profitability than most EOFY deductions ever will.
Employment Costs are Rising Faster Than Many Businesses Realise
For most service-based businesses, payroll is already the largest expense category. And the cost of employing staff continues to increase.
The Superannuation Guarantee has now reached 12%.
Payday Super requirements commence from 1 July 2026, requiring employers to pay super at the same time as wages and ensure contributions reach employee funds within seven business days.
What was previously four quarterly super payments each year may now become 26 fortnightly or 52 weekly payment events, depending on payroll frequency.
On top of this, businesses continue to face:
- Wage growth
- Recruitment costs
- Training and onboarding expenses
- Leave entitlements
- Software and technology costs
- Compliance obligations
- Insurance increases
None of these expenses disappear when the new financial year begins.
This is particularly important for offshore staff supporting multiple clients. While they may work closely with one client day-to-day, these events help reinforce their connection to the broader company and team.
Insight
Employment Hero’s modelling of more than 300,000 businesses estimated an average working capital shift of approximately $124,000 under Payday Super. For many businesses, the impact of workforce-related costs extends far beyond wages, affecting cash flow, planning, and day-to-day operations.
Are Your Highest-Paid Employees Doing Administrative Work?
When business owners review labour costs, they usually focus on what employees are paid.
A more important question is whether the work being performed matches the value of the person doing it.
Take a financial adviser earning a six-figure salary. Their expertise is valuable because they can build client relationships, provide strategic advice, generate revenue, and help grow the business.
Yet many advisers still spend hours each week updating CRM records, preparing review packs, chasing documents, scheduling appointments, and handling administrative follow-ups.
The same applies to mortgage brokers. Time spent collecting supporting documents, updating lender portals, processing paperwork, and managing application administration is time that cannot be spent writing loans, nurturing referral relationships, or meeting with clients.
The issue isn’t that these tasks are unnecessary; every business relies on them. The issue is cost allocation.
When highly skilled professionals spend significant portions of their week on administrative work, businesses are effectively paying premium salaries for tasks that could potentially be handled at a lower cost elsewhere.
This is where profitability quietly erodes. Not because staff are unproductive, but because valuable expertise is being consumed by work that doesn’t require it.
The businesses that scale most effectively are often those that deliberately separate high-value work from administrative work and ensure each is handled by the most appropriate resource.
Insight
A professional earning $120,000 per year who spends 25% of their time on administrative tasks is effectively allocating around $30,000 worth of salary to non-revenue-generating work. The bigger cost, however, may be the client meetings, referrals, and growth opportunities that never happen during that time.
When Your Best People Become the Bottleneck
This is where many businesses create a profitability problem without realising it. As organisations grow, administrative work rarely disappears. Instead, it tends to accumulate around the people who are already busy.
A client needs a document. A file needs updating. A report needs preparing. An appointment needs rescheduling.
Individually, these tasks take only a few minutes. Collectively, they can consume hours every week. Over time, however, highly skilled professionals become the default person for work that doesn’t actually require their expertise.
For financial advisers, that means less time spent meeting clients, developing strategies, and generating revenue. For mortgage brokers, it means less time writing loans, nurturing referral relationships, and progressing new opportunities. For business owners, it means spending more time managing day-to-day administration and less time focusing on growth.
The financial cost isn’t just the salary attached to those hours. It’s the opportunity cost of everything else that could have been achieved during that time.
When businesses review labour costs, they often ask, “How much are we paying our people?”
A more valuable question is, “Are we getting the best possible return on the time we’re paying for?”
EOFY is the Perfect Time to Audit Your Workflow
Once you start mapping where work sits across the business, it usually becomes clear when support is rarely missing.
Most businesses don’t deliberately avoid hiring help. Though they do wait until teams are pushed to the brim. By that stage, the structure has already absorbed the strain.
Work starts taking longer. Senior staff begin prioritising urgency over consistency. Client communication becomes reactive instead of structured. New opportunities take longer to progress because day-to-day workload takes priority.
None of these changes appear as a clear line item in financial reporting. Revenue can still look stable, and expenses may not look unusual. But underneath, more of the business is being spent on managing flow rather than delivering value.
Because when high-value staff are consistently operating at or beyond capacity, the business stops scaling in proportion to demand. It begins to plateau, even if demand continues to grow.
This is why timing matters. Support is often introduced after inefficiencies have already become embedded, rather than before they form.
At that point, the question is no longer whether the business needs additional support. It is how much efficiency has already been lost while operating without it.
Building Capacity Without Significantly Increasing Overheads
Once you step back from day-to-day execution, a clearer pattern emerges: most capacity problems are not caused by workload alone, but by how work is structured.
In many firms, every increase in demand triggers the same response — hire more senior staff or extend existing workloads. Over time, this creates a business where growth and cost move in lockstep.
There is another way capacity gets built.
Instead of scaling by adding more high-cost producers, some firms separate roles based on the nature of the work itself. Revenue-generating decisions, client relationships, and strategic work remain with senior staff. Execution-heavy and repeatable work is grouped together into defined support functions.
For professional services firms, this shift changes what “growth” actually requires. It is no longer dependent on adding more advisers or brokers to handle volume. It becomes dependent on how efficiently each existing producer is supported.
Capacity is not created by working harder or hiring faster. It is created when work stops flowing to whoever is available, and instead flows to whoever is best positioned to do it.
That shift in design is what allows firms to grow without increasing fixed costs at the same rate.
Where the Real Cost Savings Actually Are
As employment costs continue to rise through wages, superannuation, recruitment, and compliance obligations, profitability is increasingly shaped by how work is structured, not just how it is priced.
Most businesses will focus on deductions and tax planning. Fewer will step back and assess whether their structure is actually supporting growth.
The difference between the two is often what separates stable businesses from scalable ones.
If you’re reviewing costs this EOFY and want a clearer view of where capacity is being lost in your team, the Advice2Talent team can help you map out more efficient ways to structure your workforce for growth.
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