PwC’s February 2026 Tax Briefing, hosted by Angeline Young, brought together experts in employment taxes and international tax to unpack what’s ahead for employers and multinational groups, and the practical steps you can take now to be prepared ahead of upcoming compliance deadlines.
Employment taxes: FBT, Payday Super and contractors
Heidi Debrincat from our Workforce team focused on three key areas: FBT year‑end, Payday Super and worker classification. For FBT, the ATO’s continued focus on motor vehicles, exempt cars and employee contributions means organisations should revisit their data sources, documentation and governance as year‑end approaches.
On Payday Super, which commences on 1 July 2026, the discussions have now moved beyond ‘what’ to ‘how’. Aligning super with pay events will affect cash management, reconciliations, vendor arrangements, and how you communicate with your people. The clear message was to start now: map current processes, engage with payroll providers and super clearing houses, and clarify roles across tax, finance, HR and payroll to ensure a smooth transition.
Also highlighted was the continued risk around worker classification. With Payday Super and recent case law raising the stakes on who is an employee versus a contractor, businesses were encouraged to review contractor populations using accounts payable data, pay particular attention to sole traders and strengthen engagement documentation and governance.
For more information on these employment tax developments and more, join our upcoming 2026 PwC Employment Taxes Annual Update on 4 March 2026. Register here.
Pillar Two: safe harbours, filings and ATO expectations
Chris Stewart and Tony Chen from our International Tax team outlined the first filing timelines for Pillar Two in Australia, including 30 June 2026 lodgment due date for in‑scope groups with a 31 December 2024 year‑end, and the decisions groups will need to make about where and how to file the GloBE Information Return (GIR).
The panel discussed the evolving Pillar Two rules at a global level, including the recently announced ‘side‑by‑side’ package and new safe harbours, and what these mean for inbound and outbound groups in Australia. Used effectively, these can materially reduce the complexity of Pillar Two compliance in the early years. However, complexity remains as these new changes must still be legislated in Australia and in other relevant jurisdictions, and some of these changes do not apply until fiscal years commencing on or after 1 January 2026.
The ATO’s emerging approach to Pillar Two in Australia was another focal point. The briefing noted a ‘soft‑landing’ mindset on penalties in the early stages, coupled with increasing guidance and clear expectations around data, methodology and documentation. Filing exemptions were also discussed, with the key message being that exemptions are rare, and unless you have an entity that falls squarely within the legislative instrument for exemptions, it still has a filing obligation even if its top-up tax amount is nil.
Finally, the panel touched on some of the challenges that taxpayers are experiencing to date applying the Pillar Two rules. These include unexpected issues arising from the transitional CBCR safe harbour, accessing data needed to complete disclosures in the GIR (technology can play a key role here), and technical issues in applying the Pillar Two Rules in Australia (for example, applying the rules for flow-through entities to Australian trusts and the interaction of the Australian tax consolidation regime with Pillar Two).
If you’d like to understand what these developments mean for your organisation—and how to prioritise your next steps—please get in touch with your PwC contact.
