Avoid plowing around the financial stump

Every farmer knows the story of plowing around the stump. It seems easier to steer around an obstacle in the paddock than to stop and deal with it. 

But over time, that stump becomes a permanent hindrance. 

The ground around it becomes unproductive, machinery has to navigate it season after season, and what started as a small inconvenience becomes a significant problem that limits the potential of the entire field.

The same principle applies to the business side of your farm. Avoiding tough financial and compliance issues doesn’t make them disappear; it allows them to grow until they threaten your farm’s productivity, your family’s wealth, and your legacy.

Taking a proactive approach gives you control over your finances, removing barriers before they cause real harm.

Of course, sometimes you need some extra hands to help you deal with a stubborn stump. From conversations with our farming clients, we’ve identified some common pain points that you might be tempted to ‘plow around.’

• Single Touch Payroll: Ensure you have the right accounting or payroll software and that it is set up to accurately report wages, tax and super paid with every pay run.
• Payday Super: From 1 July 2026, employers must pay superannuation contributions at the time of each pay cycle (rather than quarterly.) Payment must be received by employee fund within seven business days. Penalties for non-compliance are steep and not tax deductible.
• Wage compliance: Farm operators must understand awards applicable to their employees.
• Independent contractor versus employee: Particularly during harvest season, ensure you are correctly distinguishing between employees working in the business vs contractors providing services to your business. Superannuation obligations apply to certain contractors and workcover insurance may be required for rateable contractors.
• Business structure: Regularly evaluate asset ownership and structures to protect wealth and maintain flexibility.
• Superannuation: Plan ahead to minimise the impact of the new Division 296 tax commencing 1 July 2026. Identify opportunities to make additional contributions to meet savings goals. You should also ensure your super benefits will be paid out correctly upon your death and that you have quantified how the death benefits tax might impact family wealth.
• Farm Household Allowance: Often considered only in the event of drought or extreme conditions, this Government support package is available to eligible farmers and their partners who are experiencing financial hardship with income fluctuating to low levels.
• Family succession planning: Make sure you have a documented succession plan that has been clearly communicated to all relevant parties to ensure a smooth transition and protect family harmony.
• Insurance and asset protection: Invest in comprehensive insurance and legal safeguards to protect your farm and assets. 

The stereotypical farmer is very accomplished at being a ‘jack of all trades’ when it comes to problem solving in their business. Our role as farm advisers is to help remove the stumps.

For more information, please contact your local RSM agribusiness adviser. 

This article was first published on ACM Farm Weekly.