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When is the financial year in Australia? What does FY mean?
The financial year is a one-year period that governments and most businesses use for financial reporting and budgeting. A financial year is most commonly used for accounting purposes to prepare financial statements.
The financial year (also shortened to FY) is from July 1 to June 30. Outside of Australia, it is more commonly referred to as the fiscal year, but it means the same thing.
For example, the current financial year 2020 is the 12-month period starting on 1 July 2019 and ending on 30 June 2020, and is often referred to as FY2019/20.
The next FY will begin on 1 July 2020 and will end on 30 June 2021 and will be referred to as the 2020/21 FY.
Pretty easy, right?
What does EOFY mean?
As we just learned, 30 June is the end of financial year, which can be shortened to EOFY.
Most companies — but not all — use the tax year (June 30th) as the end date to their financial year.
At the end of the financial year, every business will take stock of their financial position, draw up their annual report and financial statements (balance sheet, cash flow statement, etc.), and figure out how much tax they must pay to the government. This is generally referred to as Compliance.
Prior to the EOFY, businesses may use strategies to lower the amount of tax they will have to pay, which is known as Tax Planning. It’s a good idea to see an accountant about tax planning, as they know all the rules and can help to legally minimise the amount of tax companies will pay. Verve Group can help you with tax planning, check out how we can save you money here.