ATO Compliance Checklist for Not-for-Profits in FY26

Running a not-for-profit (NFP) organisation in Australia is rewarding but comes with its fair share of responsibilities. Beyond delivering services to your members, community, or cause, you need to make sure the organisation complies with the Australian Taxation Office (ATO) and other regulators.

In FY26, with the ATO increasingly focusing on transparency, governance, and digital reporting, it has never been more important for charities and NFPs to stay on top of their compliance obligations.

At Numble, we understand that leaders of not-for-profits often wear many hats — from fundraising and governance through to payroll and grant reporting. Bookkeeping and compliance are essential, but they can also feel like distractions from the core mission.

That’s why we’ve put together this detailed ATO Compliance Checklist for Not-for-Profits in FY26: a practical guide that helps organisations understand their obligations and how to meet them without unnecessary stress.

Why ATO Compliance Matters for Not-for-Profits

Many people assume that not-for-profits don’t pay tax, and while it’s true that charities and other NFPs often receive generous concessions, this doesn’t mean they’re free from compliance obligations. The ATO expects NFPs to:

• Apply the correct concessions they’re entitled to.
• Report accurately on income, GST, PAYG withholding, and superannuation.
• Keep proper records that can stand up to audit.
• Be transparent in how they use donor, grant, and membership funds.

Failing to comply can lead to penalties, loss of tax concessions, or reputational damage that undermines community trust. With proper systems in place, however, compliance becomes manageable — and even an opportunity to show stakeholders your professionalism and accountability.

Step 1: Confirm Your NFP Type and Tax Status

The first step in compliance is knowing what kind of not-for-profit you are in the eyes of the ATO. This determines which concessions you can claim and what reporting you need to do.

There are two broad categories:

• Charities
  • Registered with the Australian Charities and Not-for-profits Commission (ACNC).
  • Eligible for a range of tax concessions, including income tax exemption, GST concessions, and FBT rebates.
  • Must submit an Annual Information Statement (AIS) to the ACNC, which is shared with the ATO.
• Other NFPs (non-charities)
  • Include sporting clubs, community service groups, cultural associations, and more.
  • Some are income tax exempt if they meet specific requirements, while others must lodge annual tax returns.
  • Can apply for GST concessions if registered.

Numble Tip: Each year, review whether your organisation is still correctly classified. As activities evolve (for example, introducing trading arms or running events), your tax status may need updating. Numble can help assess whether you’re making the most of the concessions available while remaining compliant.

Step 2: Income Tax Obligations

Not all NFPs are automatically exempt from income tax.

• Charities registered with the ACNC are generally exempt.
• Other NFPs must check the ATO’s eligibility criteria annually. Categories that may be exempt include:
  • Community service organisations
  • Sporting and recreational clubs
  • Cultural, educational, and scientific organisations

If you’re not income tax exempt, your organisation will need to lodge an income tax return each year.

Checklist for FY26:


✔ Confirm whether your organisation is income tax exempt.


✔ Keep written evidence of your self-assessment if you’re a non-charity claiming exemption.


✔ If required, lodge an income tax return by the due date.

Numble in action: We’ve seen many small sporting clubs assume they’re exempt, only to discover they should have been lodging returns. Our bookkeeping systems ensure this question is revisited annually so there are no surprises.

Step 3: GST and BAS Reporting

Goods and Services Tax (GST) can be confusing for NFPs, especially when activities include both taxable and GST-free income streams.

• Threshold: If your organisation’s annual turnover is $150,000 or more, you must register for GST. (The threshold is higher than the standard $75,000 for businesses.)
• Concessions: Some fundraising events and supplies by charities are GST-free. For example, raffles, bingo, and volunteer-driven fundraising may qualify.
• Reporting: GST-registered NFPs need to lodge a Business Activity Statement (BAS), typically quarterly.

Checklist for FY26:


✔ Check whether you are required to register for GST.


✔ Apply GST concessions where eligible.


✔ Lodge BAS on time (quarterly or monthly).


✔ Keep valid tax invoices for all transactions.

Numble in action: We can help NFPs set up clear coding in their chart of accounts so GST-reportable and GST-free items are easily and transparently separated, reducing errors and saving hours of reconciliation time. We also support accurate BAS preparation and lodgement.

Step 4: PAYG Withholding and Payroll Compliance

If your NFP employs staff, compliance with Pay As You Go (PAYG) withholding and payroll requirements is non-negotiable.

• PAYG: You must withhold tax from employees’ wages and remit it to the ATO.
• STP Reporting: Since 2022, all employers must report wages, PAYG, and super through Single Touch Payroll (STP) each pay cycle.
• Payment Summaries: These are no longer issued directly to employees — instead, data goes to the ATO via STP and is accessible in myGov.

Checklist for FY26:


✔ Register for PAYG withholding.


✔ Lodge STP reports with each pay run.


✔ Remit PAYG withholding to the ATO.


✔ Provide accurate payroll records for employees.

Numble in action: Many NFPs operate with small admin teams where payroll errors can slip through. Our attention to detail and checklists ensures payroll is correct and STP filed, ensuring compliance while freeing up staff to focus on service delivery. Our payroll and STP setup support make this straightforward.

Step 5: Superannuation Guarantee Obligations

Employers in the NFP sector must pay superannuation just like any business.

• Rate: The Super Guarantee (SG) rate is 12% in FY26.
• Due Dates: Quarterly payments must be made by the 28th day after the end of each quarter.
• Choice of Fund: Employees have the right to nominate their preferred fund.

Checklist for FY26:


✔ Pay super at 12% of ordinary time earnings.


✔ Meet quarterly payment deadlines.


✔ Provide choice-of-fund forms to new employees.


✔ Use SuperStream for electronic reporting and payment.

Numble in action: We create reminders and set up automatic superannuation clearing house systems, so payments are never missed — avoiding hefty ATO penalties. This is built into our payroll services.

Step 6: Fringe Benefits Tax (FBT)

Not-for-profits often provide salary packaging to attract and retain staff. FBT applies to certain benefits, but charities and public benevolent institutions (PBIs) may qualify for concessions or exemptions.

• Salary Packaging: Eligible employees can package up to $15,900 tax-free for certain expenses.
• Exemptions: Meals, entertainment, and other minor benefits may be exempt up to thresholds.
• Lodgement: If FBT applies, you must lodge an FBT return annually (due in May).

Checklist for FY26:


✔ Assess whether your organisation is entitled to FBT concessions.


✔ Keep records of all benefits provided.


✔ Lodge FBT return if required.

Numble in action: FBT is one of the most misunderstood areas for NFPs. We work with your salary packaging provider to maximise employee benefits and ensure compliance, coordinating with your accountants alongside our management reporting cadence.

Step 7: Record Keeping and Audit Readiness

The ATO requires NFPs to keep detailed records for at least five years. This includes:

• Income and expenses
• PAYG and super contributions
• Minutes of meetings and governance documents
• Grant acquittals and donor restrictions

Checklist for FY26:


✔ Store records electronically for easy retrieval.


✔ Maintain board minutes to evidence decisions.


✔ Keep supporting documents for all claims and concessions.


✔ Be audit-ready at all times.

Numble in action: We use cloud bookkeeping tools like Xero and Dext along with SharePoint to digitise and store documents securely, so if the ATO or ACNC comes knocking, our clients can provide records instantly. Our system setup ensures this structure is in place.

Step 8: Annual Reporting and ACNC Obligations

If your NFP is a registered charity, you must lodge an Annual Information Statement (AIS) with the ACNC.

• Small charities (revenue under $500,000): lodge AIS only.
• Medium charities ($500,000 to $3m): lodge AIS + reviewed financial report.
• Large charities ($3m+): lodge AIS + audited financial report.

The AIS is due within six months of the end of your reporting period (usually 31 December for June year-end charities).

Numble in action: We assist you in completing AIS lodgements alongside BAS and payroll reporting so charities meet all deadlines without juggling multiple systems. Our management reporting cycle helps keep everything aligned.

Step 9: Related Entities and Trading Activities

Many NFPs operate trading arms (e.g., op-shops, cafes, or commercial activities) to fund their mission. These can trigger additional tax and reporting obligations.

• Separate Entities: Consider setting up a company or trust for trading activities.
• Income Tax: Trading arms may not qualify for exemptions.
• GST: Trading income is usually subject to GST.

Numble in action: We can refer great accounting partners to provide advice to boards on deciding whether trading activities should be separated from core NFP operations to protect the charity’s tax status and reduce compliance risks. We’ll keep the books structured via our bookkeeping services.

Step 10: Review Your Policies Annually

ATO compliance is not a “set and forget” task. Each year, review your:

• Tax status and concessions
• GST registration
• Payroll and super obligations
• Salary packaging arrangements
• Governance policies and risk management

Numble in action: We offer annual compliance reviews for NFPs — a simple way to ensure your organisation hasn’t missed a change in legislation or overlooked a concession. Ask about our management reporting and system setup support.

The FY26 Compliance Environment: What’s Changing

A few trends NFP leaders should keep an eye on in FY26:

• Digital-first ATO systems: Expect fewer paper lodgements and more integration with accounting software.
• Increased scrutiny on FBT and salary packaging: Particularly for charities and PBIs.
• Transparency in reporting: Funders and regulators are demanding more detail on how funds are spent.
• Director penalties: Boards can be personally liable for PAYG and super non-compliance.

Numble’s role: We stay across legislative updates, so our clients don’t have to. When rules shift, we update systems and provide training to boards and staff.

Your FY26 ATO Compliance Checklist for NFPs

Here’s a quick summary of the must-dos:

1. Confirm your organisation type and tax status.
2. Assess income tax exemption.
3. Register and report GST correctly.
4. Meet PAYG and STP obligations.
5. Pay superannuation at 12% on time.
6. Understand FBT and salary packaging.
7. Keep complete financial and governance records.
8. Lodge AIS and financial statements with the ACNC.
9. Manage trading arms appropriately.
10. Review compliance annually.

How Numble Supports Not-for-Profits

At Numble, we work with not-for-profits across Australia, from small community clubs to large charities with multiple funding streams. Our services include:

• Setting up bookkeeping systems designed for NFP complexity.
• Managing payroll, STP, and super to keep employees and the ATO happy.
• Preparing BAS, assisting with AIS, and FBT returns accurately and on time.
• Training boards and treasurers in understanding financial reports with ongoing management reporting.
• Offering annual compliance reviews so nothing falls through the cracks.

We believe NFP leaders should spend their time driving impact, not drowning in paperwork. With Numble on your side, you can be confident your organisation is compliant, transparent, and ready for growth in FY26 and beyond.

Final Thoughts

Compliance may not be the most exciting part of running a not-for-profit, but it is essential for maintaining community trust and securing funding. By following this checklist — and partnering with professionals like Numble — your organisation can stay focused on what really matters: delivering outcomes for your members, donors, and community.

Numble’s expertise in the not-for-profit sector means we don’t just tick boxes; we help organisations use their financial systems as a tool for growth, sustainability, and impact.

If your NFP needs help with compliance in FY26, reach out to Numble today. We’ll make sure your organisation stays on top of its obligations — and ahead of the curve.