Beat the EOFY clock and save by pre-paying your FY26 business travel

Westpac’s Head of International Economics, Elliot Clark, told us the Australian economy has “is moving to an expansionary footing” as inflation normalises and interest rates are poised to fall. With trimmed-mean CPI now inside the Reserve Bank’s 2–3 per cent target band at 2.9 per cent year-on-year in Q1, and two further cash-rate cuts expected by Christmas, Elliot believes the new financial year will open with improved momentum and rising business demand.

“Pre-paying travel captures today’s prices while positioning a business to benefit from a strengthening economy in the coming financial year,” Elliot says.

Under the ATO’s 12-month rule, any flight, hotel or travel-management fee paid before 30 June and used by 30 June 2026 is fully deductible this financial year.^[1] With international airlines flooding the market with extra capacity and sharpened fares, businesses can act now before the EOFY clock runs out.

“Don’t let the changing cost of travel eat into your margins,” says Tom Walley, our Global Managing Director. “Lock in the seats, beds and car hire or transfers now, write them off now, and fly next financial year on yesterday’s prices.”

Australia’s travel landscape has stabilised with domestic passenger volumes now exceeding pre-pandemic levels. International capacity is also on the rise, thanks in part to new services such as Qantas’ Darwin–Singapore route and Virgin Australia’s new deal with Qatar Airways, keeping long-haul prices competitive, signalling a full recovery in demand.^[1]

“We’re seeing thousands of seats opening up across the international network and the launch of new long-haul routes,” adds Tom. “The smartest businesses are locking their travel bookings in and letting the tax deduction cover roughly a third of the cost.”

As airlines continue to expand routes and release capacity, businesses that pre-pay travel now stand to benefit from both pricing advantages and tax efficiency. Elliot says, “It’s a timely response to shifting market conditions and could prove a practical way to strengthen the bottom line ahead of FY26.”

The above does not constitute financial or tax advice. Organisations should seek guidance from a qualified tax professional before making financial decisions.

_{[1] https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business}

_{[2] https://www.ato.gov.au/law/view/print?DocID=SAV/DPE/00001}

_{[3] https://www.fcmtravel.com/en-au/discover-fcm/news-hub/international-flight-capacity-pre-pandemic-levels}