- EOFY in Australia
Tax returns cover your income, income tax, and so on for this period, and when the government changes things like tax rates, the minimum wage, and pension rates, the applicable start date is July 1st, making this end of the financial year an important date on the calendar in Australia.
Businesses and retailers want to boost sales and get rid of inventory as much as possible by June 30th, so they run “EOFY sales.” This is a time of the year when they promote sales by reducing prices, even a little. It's a time when things like appliances, computers, and clothes are cheaper, so there are probably a lot of people who might want something in late April or early May but wait, thinking “I’ll just wait a little longer because they might be in an EOFY sale.”
You start seeing “EOFY SALE” ads here and there around town from about late May, department stores run big sales too, and you start getting lots of email notifications about EOFY sales at online stores.
And it’s not just on the sales side of things. More people buy things that they can book as an expense and claim as a tax deduction by June 30th, so things that can be written off as business expenses, like computers, office equipment, and cars, sell better than usual at this time of the year.
I don’t go for EOFY sales much, so I don’t know much about the discount rates and so on, but I think you can get a better discount by going to a store, negotiating the price, and buying things over the counter rather than buying them online, if you’re buying big things like cars, furniture, and appliances.
Cars in particular are probably especially good value for money at the end of the financial year.
And then once June 30th, the EOFY, has passed, and the new financial year comes along on July 1st, you can lodge your tax return for your income in the previous financial year. In Australia, everyone who generates income is obliged to lodge a tax return. You can also be fined if you don’t lodge your return by the due date or make omissions in your return, for example.
Although income tax is deducted from the pay of every employee every month (or week, or 2 weeks, etc.) at a previously calculated tax rate, the amount of any excess or shortfall is calculated in your tax return, if you have paid too much you get a refund, and if you haven’t paid enough you pay that tax. That means the tax refund every year is a bit of additional income, and while there are some who can’t wait to do their tax return, there are others who must pay tax every year and are not happy about doing theirs.
I do work as a bookkeeper and around the EOFY there’s an increase in the various accounting things I need to be careful of, which makes it a particularly tense time of the year. Once you’re past June 30th and the new financial year has started on July 1st, you do get the slightly refreshing feeling that once again this year you’ve passed an important date and made a new start.
The current financial year in Australia has brought in an increase in the minimum pension rate, and the minimum wage has also been lifted, perhaps in proportion to the increases in prices. I wonder what sort of financial year this will be for Australia.