As 30 June rapidly approaches, pharmacy owners should be actively reviewing their business and preparing for year-end obligations. Beyond the usual tax considerations, pharmacies face a unique mix of operating and accounting complexities that require a tailored approach. At Holman Hodge, we work closely with pharmacy clients and understand the critical role that clean, accurate reporting plays in presenting a true picture of your business to stakeholders, including banks.

Here are key focus areas for pharmacists to ensure a smooth and successful end to the financial year.

Stocktake

Performing a stocktake at year-end is essential, not just for compliance but for operational insight. Pay special attention to negative stock balances. These typically indicate system errors or data entry issues and can distort both profit and inventory valuation.

For a clean stocktake:

  • Ensure physical counts align with system data.
  • Investigate and correct negative stock positions.
  • Identify and write off expired, damaged or slow-moving stock.

Choosing the appropriate valuation method (cost, market value, or replacement) is also crucial for consistent financial reporting.

As we close up the end of another financial year, please remember to run a Stock on Hand and Owing Scripts report as at 30 June 2026. The report should be run before trading on the 1st of July 2026.

Review Debtors

Pharmacy owners should closely review their Shop accounts and debtor ledgers, especially amounts owed from PBS (Pharmaceutical Benefits Scheme) accruals, before 30 June. These can materially affect your reported operating profit. Inaccurate debtor records, particularly over or under reporting of PBS accruals may lead to misleading financial performance metrics. This has the potential to impact your ability to meet bank covenant requirements, especially when profit-based metrics are tested.

Take the time now to validate debtor balances and ensure reporting reflects actual receivables.

Review Creditors

As with debtors, aged creditor listings should be reviewed for accuracy. Misstatements in liabilities can distort your business’s working capital position and again lead to misleading financial ratios used in banking or valuation scenarios.

Verify all supplier statements, follow up on any long-outstanding amounts, and ensure your creditor balances reflect only real, payable obligations.

Inter-Store Transfers

Multi-store operators should review and reconcile all inter-store transfers. Unreconciled or incorrect transfers between locations can result in double-counting or under-reporting of stock, skewing profit margins across stores.

Establish a formal process to review these transfers and ensure all records are current and accurate before 30 June.

Payroll Tax

With pharmacy staffing levels on the rise and wage increases flowing through, many owners may be edging closer to payroll tax thresholds, especially if operating across multiple locations or under related business structures.

Each state and territory in Australia has its own payroll tax threshold, ranging from around $900,000 to over $2 million, depending on the jurisdiction. If your total Australian wages exceed the applicable state threshold, you may become liable for payroll tax, even if your business has not previously been subject to it.

Key considerations:

  • Review your total wages paid, including superannuation and certain contractor payments.
  • Consider if any grouping provisions apply (e.g. related entities under common control).
  • Plan ahead for any future wage growth or staffing changes that may tip you over the line.

At Holman Hodge, we help pharmacy owners understand whether they’re at risk of crossing a threshold and develop proactive strategies to manage and, where appropriate, mitigate their payroll tax exposure. This might include reviewing business structures, reallocation of wages, or exploring legitimate grouping exemptions.

If you’re unsure of your position, now is the time to review it before the new financial year begins.

Instant Asset Write-Off Rules

A reminder that eligible pharmacies with aggregated annual turnover of less than $10 million may be able to claim an immediate tax deduction for the business-use portion of eligible depreciating assets costing less than $20,000 each (GST exclusive).

The $20,000 threshold applies on a per-asset basis, meaning multiple assets may qualify for an immediate deduction, provided each individual asset costs less than the threshold. The asset must be first used or installed ready for use for a taxable purpose between 1 July 2025 and 30 June 2026. The measure can apply to both new and second-hand assets.

When assessing whether an asset is below the threshold, care should be taken with the total cost of the asset, including any relevant second element costs or cost additions. These costs may cause the asset, or relevant addition, to exceed the threshold and therefore fall outside the immediate deduction rules.

Assets costing $20,000 or more cannot be immediately written off under these rules. For eligible pharmacies using the simplified depreciation rules, those assets can generally be allocated to the small business depreciation pool and depreciated at 15% in the first income year and 30% in each subsequent income year.

Owners & Managers should also review their fixed asset schedule before year-end to identify any assets that have been sold, scrapped, destroyed, replaced, or are no longer used and are not expected to be used again. Your advisor will determine, if a deduction may be available if the asset’s termination value is less than its adjustable value.

Pharmacies with aggregated turnover of $10 million or more are not eligible to use the small business simplified depreciation rules and will generally need to apply the ordinary depreciation rules, based on the asset’s effective life.

Don’t Forget General Tax Planning

In addition to pharmacy-specific tips, make sure you’re across broader tax planning strategies.

We’ve outlined these in our recent insights:

From superannuation contributions and asset write-offs to prepaid expenses and trust resolutions, these checklists are critical to maximise your tax outcomes and avoid any costly oversights.

How we can help?

If you’d like help reviewing your pharmacy’s records ahead of 30 June or want an estimate of your tax position, please reach out by contacting your Holman Hodge advisor directly. Clean data is not just about compliance, it protects your business reputation, supports decision making, and ensures financial reports are truly reflective of operational performance.

About the author

Jacob Prestia is a Senior Manager at Holman Hodge. He understands that his work with pharmacy clients encompasses much more than just the figures presented in compliance and management reports. He fosters personal relationships that extend to providing advisory services on critical matters such as restructures, cash flow management, and transactions, in addition to supporting clients in areas like property ownership, syndication, and development.