The State of Small Business in Australia: What Owners Need to Know Right Now

Small business owners have had a lot to absorb over the past few weeks. Two regulatory and economic developments in particular are set to shape how Australian small businesses operate, price, and plan through the rest of 2026 — a nationwide card surcharge ban, and fresh insolvency data showing where the pressure is landing hardest.

Here's what's actually changing, backed by the primary sources, and what it means if you run a small business.

The card surcharge ban: what's changing from 1 October 2026

The Reserve Bank of Australia has confirmed that surcharging on card payments will be removed for all designated card networks — eftpos, Mastercard and Visa — from 1 October 2026. The RBA achieved this by removing its prohibition on "no-surcharge" rules, which allows the card networks to impose their own ban on surcharging for credit, debit and prepaid transactions.

American Express, which isn't directly regulated by the RBA, has independently announced it will also remove surcharging from the same date. In practice, that means every major card network operating in Australia will move to zero-surcharge from 1 October.

It's important to be precise about what this covers. The RBA's FAQ is explicit that the change applies only to surcharges added because a customer pays by card — not to weekend surcharges, public holiday surcharges, or general booking and service fees, which remain unaffected. Fees your payment provider charges for terminal rental or transaction processing also aren't classified as surcharges and aren't covered by this change.

What businesses need to do: the RBA has been clear that businesses will still incur the underlying costs of accepting card payments — those costs simply can't be itemised as a separate surcharge anymore. The RBA's guidance suggests businesses build these costs into their overall pricing instead, in line with the way most consumers actually want to see pricing (an all-inclusive sticker price, rather than a fee added at checkout).

Beyond that, the RBA is also implementing changes to interchange fees and measures aimed at improving transparency of what merchants actually pay to accept card payments — so there may be some genuine cost relief on the other side of this change, not just a pricing headache. Businesses on invoicing arrangements should also note: if a card payment is made on or after 1 October 2026, surcharging is no longer available, even if the invoice was issued before that date.

If you haven't already, now is the time to review your payment provider statements, understand exactly what you're being charged and why, and decide how (or whether) your pricing needs to shift before the deadline lands.

Insolvency data: where the pressure is concentrated

Alongside this pricing shift, ASIC's latest data gives a clearer picture of which parts of the small business economy are under the most strain.

According to insolvency statistics reported by Accountants Daily, 14,152 companies entered insolvency for the first time in the 2025–26 financial year. That's a modest improvement on the 14,722 companies that entered insolvency the year before, but the rate remains above the long-term average.

The data breaks down clearly by sector. Construction was hit hardest again, with 3,472 companies entering external administration or having a controller appointed over the year — by far the largest single-industry total. Accommodation and food services recorded the second-highest number, at 2,078.

Creditors' voluntary liquidation remained the most common insolvency pathway, accounting for roughly half of all cases for the year, followed by court appointments. Notably, restructuring — which had surged in popularity during 2024–25 — was used less often in 2025–26, with 3,031 companies going through the process.

There's a modest silver lining in the timing: insolvency rates in the fourth quarter of 2025–26 were down around 8% compared with the same period the previous year, even against a backdrop of rising energy costs and interest rates. The highest quarterly total for the year came earlier, in the December quarter, when 3,856 companies entered insolvency.

What this means if you're running a small business

Neither of these developments is cause for panic, but both call for action rather than a wait-and-see approach.

If you're in construction, hospitality, or another sector under visible pressure, this is a good moment to get a clear-eyed view of your cash position and your team structure — overextending on staffing or taking on work you can't service profitably is exactly the kind of decision that shows up in next year's insolvency data.

If you're managing card payments, the surcharge ban is a concrete deadline with a clear compliance requirement. Review your payment provider costs now, model what it means for your pricing, and don't leave it until the last week of September.

And if you're thinking about your team — whether that's building resilience through the right hire, or making sure you have the right people in place before conditions tighten further — that's exactly where the right recruitment partner makes a measurable difference.

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Sources: - Reserve Bank of Australia, "Frequently Asked Questions – Removal of Payment Surcharges From 1 October 2026," rba.gov.au - Accountants Daily, "Company insolvencies climb to 14,152 for FY2025–26," 22 July 2026, citing ASIC insolvency statistics