Ending card surcharges: What you need to know before 1 October 2026
The Reserve Bank of Australia (RBA) has confirmed that all surcharges on credit and debit card payments — across eftpos, Mastercard and Visa — will be banned from 1 October 2026.
This represents one of the most significant updates to Australia’s payments landscape in years and will have a direct impact on businesses and consumers.
Why this matters
Australians pay an estimated $1.6 billion in card surcharges every year. At the same time, businesses collectively bear even higher card-acceptance costs behind the scenes. Under the new rules, total merchant payment costs are expected to fall by around $910 million per year, with small businesses likely to see the largest percentage savings.
For many businesses this will mean simpler pricing, fewer compliance headaches and potentially better margins — but it also means some preparation is needed.
What’s changing?
The RBA’s reform package has three key components:
1. Surcharges banned
From 1 October 2026, businesses cannot add any surcharge — percentage or flat fee — for payments made using eftpos, Mastercard, Visa or related networks. Customers must see and pay one final price, whether they purchase online, at the counter, or via mobile payment.
2. Lower interchange fees
Interchange fees (the wholesale fees charged between banks when a customer pays by card) will be reduced, with new caps for foreign-issued cards. This should directly lower the cost that a business needs to pay to accept card payments.
3. Greater transparency
Banks, card schemes and payment providers must publish clearer information about fees and margins.
They must also demonstrate how reductions in wholesale fees are being passed through to retailers. This gives businesses more power to compare providers and negotiate.
These changes are supported by oversight from the Australian Competition and Consumer Commission (ACCC) and guidance from the Australian Small Business and Family Enterprise Ombudsman.
What your business should do now
1. Review your merchant fees
Look at your recent statements and determine:
How much you currently pay in card-acceptance fees; and
Whether you have been relying on surcharges to offset part of those costs.
If surcharges are part of your pricing strategy, you may need to adjust prices to maintain margins, where commercially appropriate.
2. Speak to your payment provider
With lower interchange fees coming and more transparency required, it’s a good time to negotiate:
Better merchant service fees
Updated pricing plans
POS or terminal upgrades
Small businesses often pay closer to the current fee caps, so they stand to gain the most.
3. Update your pricing and POS systems
You’ll need to remove:
Surcharge signage
Online checkout surcharges
Automatic percentage add-ons
All displayed prices must become all-inclusive.
4. Build changes into your cash flow
Lower merchant fees won’t appear immediately, but most businesses should see reduced costs flow through during the 2026–27 financial year. This is a good time to revisit budgets, especially for cafés, retailers, trades and service-based operators that have a high proportion of small card transactions.
5. Watch customer behaviour
Businesses might find that the removal of surcharges encourages more customers to pay by card. Higher card usage is often positive for convenience and transaction speed, but keep an eye on total acceptance costs as patterns shift.
The broader commercial picture
This reform levels the playing field to some extent.
Businesses that never applied surcharges will simply benefit from lower underlying fees. Those that did add a surcharge will enjoy simpler operations, less admin and fewer compliance risks. Over time, the changes should encourage more competition among payment providers, potentially leading to better products and lower fees across the market.
There may be secondary adjustments (for example, banks reviewing rewards programs), but the combined effort of the RBA and ACCC aims to ensure that cost savings are passed through fairly and transparently.
Final thoughts
This is ultimately a practical reform: fewer add-ons at the checkout, simpler pricing for customers, and lower complexity for businesses. Some businesses will see this as an opportunity to improve margins, streamline processes and enhance the customer experience.
We recommend reviewing your payment arrangements in the coming months. Our team can help analyse your current merchant fees, model the likely impact of the changes, and support negotiations with providers.
If you’d like tailored advice on how the end of card surcharges affects your business, please reach out — now is the ideal time to prepare.
Government to wind back electric vehicle FBT exemption in three stages
The Government has announced a staged wind-back of the current Fringe Benefits Tax (FBT) exemption for electric vehicles (EVs), following recommendations from the Statutory Review of the Electric Car Discount released in May 2026. While the policy continues to support EV uptake, it also aims to make concessions more sustainable and better targeted. The changes are expected to save the Budget an estimated $1.7 billion over five years from 2025–26.
Importantly, nothing changes immediately—the existing full FBT exemption for qualifying EVs continues until 31 March 2027.
Three-phase transition
Phase 1 — Now until 31 March 2027
The current rules remain fully in place.
Eligible EVs below the Luxury Car Tax (LCT) threshold (approximately $91,387 for fuel-efficient vehicles in 2025–26) continue to enjoy a complete FBT exemption.
For businesses and employees using novated leases or salary packaging, there is no change during this period.
Phase 2 — 1 April 2027 to 31 March 2029
The concession begins to narrow, with a focus on more affordable vehicles:
EVs costing $75,000 or less: Full FBT exemption continues if the eligibility conditions are met.
EVs priced above $75,000 and below the LCT threshold: A 25% FBT discount applies when calculating the FBT liability.
This phase is intended to encourage manufacturers to continue supplying competitively priced EVs into the Australian market, complementing the Government’s New Vehicle Efficiency Standards.
Phase 3 — From 1 April 2029
All eligible EVs under the LCT threshold will receive a flat 25% FBT discount, regardless of price.
The import tariff exemption for qualifying EVs remains permanently in place.
Grandfathering of existing leases
The Government has indicated that existing arrangements will be protected: current leases will not be affected by the new rules.
Draft legislation will clarify the precise scope of this grandfathering, but businesses and employees can take some comfort that current packages will continue to qualify for existing FBT concessions.
What this means for your business and your employees
The FBT exemption has been one of the most effective incentives driving EV adoption, particularly via novated leasing, allowing employees to access EVs using pre-tax income.
The Review found that the exemption:
Led to around 64,000 additional battery EVs in its first three years
Reduced emissions and improved fuel savings
Increased EV uptake across metropolitan, regional and outer-suburban areas
However, it also highlighted equity concerns (higher-income employees benefited disproportionately) and noted that costs to the Budget were growing quickly. The new phased approach aims to balance continued access to lower-cost EVs with long-term fiscal sustainability from the Government’s perspective.
Practical considerations for businesses and individuals
Consider acting before 31 March 2027: Anyone thinking about packaging an EV may benefit from entering arrangements while the full exemption still applies. Timing of orders and leases will be particularly important.
Review fleet and salary packaging models: From 2027 onwards, the value proposition will shift. EVs at or below $75,000 will remain highly attractive under the full exemption in Phase 2.
Commercial fleets: Businesses with high work-use vehicles may see limited impact, but reviewing total cost of ownership (including FBT, running costs and charging infrastructure) remains essential.
Second-hand EVs: A growing used-EV market may provide cost-effective alternatives, particularly where new-vehicle thresholds become restrictive.
EV momentum remains strong. EV/PHEV sales reached 22.9% of new vehicles in March 2026, up from just 1.8% in May 2022, with an increasing number of models now available in the $30,000–$40,000 range.
Next steps
These reforms maintain support for cleaner transport while tightening the focus of concessions. As always, the fine print in the amending legislation will matter, especially when it comes to transitional rules.
If you are considering acquiring an EV—personally or for your business—or want to understand the impact on salary packaging and fleet costs, our team can model the outcomes and advise on the optimal timing. Please let us know if you would like some assistance with working through your options.