Total Liabilities Explained: The Essential Guide for Australian Finances in 2025

For Australians navigating a rapidly changing economy in 2025, understanding your ‘total liabilities’ isn’t just an accounting formality—it’s a cornerstone of smart financial decision-making. Whether you’re running a business, managing your household budget, or planning for retirement, knowing what you owe is as important as knowing what you own. Let’s break down why total liabilities matter, how they affect your financial outlook, and what recent policy updates mean for everyday Aussies.

What Are Total Liabilities?

Total liabilities represent the sum of all debts and financial obligations you or your business owe to others. This includes everything from your mortgage and credit card debts to business loans, unpaid bills, and tax liabilities. In essence, it’s the total amount you’d need to pay off today to be debt-free.

• Personal liabilities: Mortgages, car loans, credit card balances, HECS/HELP debts, personal loans, buy-now-pay-later obligations, and even unpaid utility bills.

• Business liabilities: Business loans, accounts payable, GST owed to the ATO, superannuation contributions, and payroll obligations.

On a balance sheet, total liabilities are subtracted from total assets to determine your net worth (or a business’s equity). This single figure is a reality check—knowing it helps you plan, borrow, and invest more effectively.

Why Total Liabilities Matter in 2025

Australia’s financial landscape is evolving. The RBA’s interest rate settings, the ATO’s digital reporting requirements, and new consumer credit policies all put the spotlight on debt management and transparency. Here’s why keeping an eye on total liabilities is more important than ever:

• Interest Rate Movements: With the RBA maintaining the cash rate at 4.35% into 2025, variable rate debts remain expensive. The average Aussie household is now spending more on mortgage repayments than ever before. This makes understanding—and reducing—total liabilities critical for financial breathing room.

• Credit Reporting and Lending Standards: Lenders are scrutinising total liabilities more closely, thanks to comprehensive credit reporting and tighter responsible lending rules. Your ability to refinance, secure a home loan, or access business finance hinges on how much you owe elsewhere.

• Tax and Compliance: The ATO’s Single Touch Payroll and e-invoicing mandates mean business liabilities—like PAYG withholding or GST—are more visible and must be managed in real time. Falling behind can trigger audits or penalties.

For individuals, tracking total liabilities is also key to managing stress and mental health. ASIC’s 2025 research shows that Australians with a clear grasp of their debts report higher financial wellbeing and lower anxiety about the future.

How to Calculate and Track Your Total Liabilities

Calculating total liabilities isn’t rocket science, but accuracy matters. Here’s a step-by-step approach for Aussies in 2025:

• List all debts and obligations: Include every loan, credit card, buy-now-pay-later balance, and any unpaid bills.

• Check current balances: Use bank statements, online loan accounts, and recent bills to get up-to-date figures.

• Include upcoming obligations: Don’t forget future tax bills, HECS/HELP indexation (which increased by 4.7% in June 2025), and business superannuation liabilities.

• Total everything up: The sum is your total liabilities—your starting point for tackling debt or planning your next financial move.

Many Australians now use budgeting apps linked to open banking data to track liabilities in real time. Some even set alerts for when credit card debt or business liabilities exceed safe thresholds, helping them stay proactive.

Real-World Example: Total Liabilities in Action

Consider the case of Sarah, a Melbourne-based graphic designer. In early 2025, Sarah wants to upgrade her home and take out a bigger mortgage. Her bank asks for a full breakdown of her liabilities:

• Mortgage: $370,000

• Car loan: $18,000

• Credit card: $3,000

• HECS-HELP: $12,000 (with 2025 indexation applied)

• Buy-now-pay-later: $1,200

Sarah’s total liabilities come to $404,200. The lender uses this figure to assess her borrowing capacity. By paying down her credit card and buy-now-pay-later debts first, Sarah improves her chances of getting approved for the home loan and securing a better rate.

Policy Updates and Trends to Watch

Several 2025 policy changes are reshaping how Australians manage and report total liabilities:

• HECS-HELP Indexation Reform: The Federal Government has capped HECS-HELP indexation at the lower of CPI or wage growth, easing the annual liability growth for graduates.

• Credit Card Minimum Payments: ASIC’s new rules require credit card providers to highlight the true cost of only making minimum payments, nudging Aussies to pay down debts faster.

• Small Business Reporting: E-invoicing is now mandatory for businesses with turnover over $10 million, ensuring liabilities like GST and supplier debts are reported promptly to the ATO.

Staying across these developments can help individuals and businesses avoid unexpected penalties and optimise their debt strategies.

Conclusion: Take Control of Your Total Liabilities

In 2025, tracking and managing your total liabilities is more than a box-ticking exercise—it’s a pathway to financial freedom, resilience, and opportunity. By understanding exactly what you owe, you’ll be better positioned to make smart choices, weather economic shifts, and seize new possibilities. Don’t let your liabilities manage you—make them work for you instead.