Other Current Liabilities Explained: Guide for Australian Businesses 2025

For Australian business owners and finance managers, keeping tabs on current liabilities is vital for healthy cash flow and compliance. But one section on the balance sheet—other current liabilities—often gets overlooked or misunderstood. In 2025, with new accounting rules and evolving tax obligations, understanding these liabilities is more important than ever.

What Are ‘Other Current Liabilities’?

Other current liabilities represent a company’s short-term debts or obligations that are due within one year, but don’t fit neatly into standard categories like accounts payable or short-term loans. These can include a diverse mix of items, such as:

• GST and PAYG withholding payable
• Accrued expenses (like utilities, wages, or bonuses owed)
• Unearned revenue (advance payments from customers)
• Superannuation payable
• Short-term provisions for leave entitlements
• Dividends declared but unpaid

For example, if your business received a customer deposit in December 2024 for goods to be delivered in January 2025, that deposit is an unearned revenue and part of other current liabilities until the goods are delivered.

2025 Regulatory and Policy Updates Impacting Liabilities

This year, there are several important updates that affect how Australian businesses must treat and report their current liabilities:

• ATO Reporting Standards: The ATO’s Single Touch Payroll Phase 3 is now mandatory for all employers in 2025. This means more granular reporting of accrued wages, super, and PAYG obligations—often classified as other current liabilities.
• GST Changes for Digital Services: The 2025 update to GST rules extends tax obligations to a broader range of digital services. Businesses holding GST collected but not yet remitted must ensure these amounts are properly recognised in their liabilities.
• Superannuation Guarantee Rate: The SG rate has increased to 12% from 1 July 2025. Businesses must account for higher superannuation payable as a current liability until paid.
• Environmental Levies: With new state-based levies on packaging and waste, many businesses in retail and FMCG sectors may see new accruals show up as short-term obligations.

Staying current with these changes helps avoid compliance risks and makes financial reporting more transparent for investors and lenders.

Managing and Minimising Other Current Liabilities

While some current liabilities are unavoidable, effective management can improve liquidity and support business growth. Here’s how savvy Australian businesses are tackling this in 2025:

• Automated Accounting: Cloud-based platforms like Xero and MYOB can now automatically flag and categorise other current liabilities, reducing manual errors and missed payments.
• Cash Flow Forecasting: Integrating liability schedules into cash flow projections helps anticipate future outflows and avoid last-minute cash crunches.
• Reviewing Contract Terms: Negotiating longer payment terms with suppliers or structuring customer deposits can smooth out spikes in liabilities.
• Proactive Compliance: Regularly reconciling your balance sheet with ATO portals and superannuation funds helps catch discrepancies before they become costly penalties.

For example, a Sydney-based tech startup recently implemented automated reminders for PAYG and superannuation obligations. The result? They avoided late payment penalties and freed up working capital for R&D investment.

Why Accurate Reporting Matters in 2025

Transparent reporting of other current liabilities isn’t just about ticking boxes. It’s a signal to lenders, investors, and partners that your business is well-managed and financially stable. With Australian banks tightening lending criteria in 2025, especially for SMEs, an up-to-date balance sheet can make or break your next loan application.

Additionally, with new ATO data-matching initiatives, the risk of underreporting liabilities is higher than ever. Errors in your liabilities section can trigger audits or penalties, so attention to detail is essential.