What is a fiscal year?

Published Wednesday 17 June 2026

Table of contents

• What is a fiscal year?
• Fiscal year vs calendar year
• The Australian financial year
• Why businesses choose a fiscal year
• Examples of fiscal years around the world
• How to choose a fiscal year for your business
• Simplify your financial year planning with Xero
• FAQs on fiscal year

Key takeaways

• A fiscal year is any 12-month period a government or business uses for accounting, tax reporting and financial planning. In Australia, it's commonly called the financial year.
• The Australian financial year runs from 1 July to 30 June. The Australian Taxation Office (ATO) uses this period to assess income tax, and key lodgement deadlines fall within it.
• Fiscal years are named by their ending year, so the period from 1 July 2026 to 30 June 2027 is FY2027 (or FY27 for short).
• Choosing the right fiscal year helps you align financial reporting with your business cycle, plan for tax obligations and make better decisions year-round.

What is a fiscal year?

Understanding fiscal years is one of the first steps to getting your business finances organised. This section explains what the term means and how it applies to your business.

A fiscal year is a 12-month accounting period that a government, organisation or business uses for financial reporting, budgeting and tax purposes. It doesn't have to line up with the calendar year. In Australia, you'll often hear it called the financial year, and the 2 terms mean the same thing.

Fiscal years follow a standard abbreviation convention. The short form uses "FY" followed by the last 2 digits of the ending year: FY27. The long form spells out all 4 digits: FY2027. For example, a fiscal year that runs from 1 April 2026 to 31 March 2027 is called FY27 or FY2027, because it ends in 2027.

Fiscal year vs calendar year

The distinction between a fiscal year and a calendar year is straightforward, but it's worth understanding clearly.

A calendar year always starts on 1 January and ends on 31 December. It's the standard 12-month period most people use in everyday life. A fiscal year, on the other hand, can start on any date and run for 12 months. Its purpose is specifically tied to accounting, tax and financial reporting.

The key difference comes down to purpose. Calendar years are fixed and universal. Fiscal years are flexible and designed to match the way a government or business manages its money. Many countries and companies choose a fiscal year that doesn't match the calendar year so their reporting periods better reflect their actual operations.

The Australian financial year

If you're running a small business in Australia, the financial year is central to how you manage tax and compliance obligations.

The Australian financial year runs from 1 July to 30 June. The Australian Taxation Office (ATO) uses this period as the basis for assessing income tax for individuals, businesses and other entities. FY2027, for example, runs from 1 July 2026 to 30 June 2027.

Several key dates fall within each financial year. Business activity statement (BAS) lodgements are due quarterly: 28 October, 28 February, 28 April and 28 July. If you lodge your own tax return, the deadline is 31 October. If you use a registered tax agent, you may have until 15 May the following year.

Staying on top of these dates helps you avoid penalties and keeps your cash flow predictable throughout the year. As the end of financial year approaches, it's a good idea to reconcile your accounts and review your records.

Why businesses choose a fiscal year

While most Australian small businesses follow the standard July–June financial year, the choice of fiscal year can make a real difference to how a business operates.

Some businesses choose a fiscal year that aligns with their natural revenue cycle. A retail business with peak sales over the Christmas period, for example, might benefit from a fiscal year that captures the full holiday season in 1 reporting period rather than splitting it across 2.

A well-chosen fiscal year also supports better financial reporting. When your reporting period matches your business cycle, your annual results give a clearer picture of performance. This makes it easier to compare year-on-year results and spot trends.

Tax planning is another consideration. Aligning your fiscal year with your busiest and quietest periods can help you time deductions and manage cash flow more effectively.

Examples of fiscal years around the world

Fiscal years vary widely between countries and even between companies within the same country. Here are some common examples.

• Australia: 1 July to 30 June
• United Kingdom: 6 April to 5 April
• United States (federal government): 1 October to 30 September
• Japan: 1 April to 31 March
• China: 1 January to 31 December (matches the calendar year)

Individual companies sometimes choose their own fiscal year based on their industry and operations. Apple's fiscal year runs from October to September, while Walmart's runs from February to January. These choices reflect each company's peak trading periods and when it makes the most sense to close the books.

How to choose a fiscal year for your business

Picking the right fiscal year comes down to understanding your business cycle and your regulatory environment. Here are 3 things to consider.

1. Look at your revenue patterns

If your business has a clear peak season, consider a fiscal year that captures that period within a single reporting cycle. This gives you cleaner year-on-year comparisons and makes budgeting more intuitive.

2. Consider your industry norms

If most businesses in your sector follow a particular fiscal year, aligning with them can simplify benchmarking. It also makes it easier for investors, lenders or partners to compare your results.

3. Check your ATO obligations

In Australia, most small businesses use the standard 1 July to 30 June financial year, as required by the ATO for income tax purposes. If you're considering a different reporting period for internal management, talk to your accountant or bookkeeper about how to handle the practicalities alongside your tax obligations.

Simplify your financial year planning with Xero

Managing your finances across a full fiscal year is easier when you have the right tools in place.

Xero's cloud-based accounting software helps you stay on top of your financial year from start to finish. Automated bank reconciliation keeps your records up to date without manual data entry. Built-in reporting gives you a clear view of your financial position at any point in the year, so you can make confident decisions when it counts.

You can also collaborate with your accountant or bookkeeper directly in Xero, making tax time and BAS lodgements more straightforward. To see how Xero can simplify your financial year, get one month free.

FAQs on fiscal year

Here are some frequently asked questions about fiscal year.

What is the difference between a financial year and a fiscal year?

There's no practical difference. "Financial year" and "fiscal year" refer to the same 12-month accounting period. In Australia, "financial year" is the more common term, while "fiscal year" is widely used internationally.

When does the Australian financial year start and end?

It runs from 1 July to 30 June. You can confirm the current financial year period through your myGov account or on the ATO website.

Can a business choose its own fiscal year in Australia?

For income tax purposes, Australian businesses must use the standard 1 July to 30 June financial year unless the ATO grants a substituted accounting period. Approval is typically given to businesses with overseas parent companies or specific operational reasons.

Do other countries use the starting year or ending year to name a fiscal year?

It varies. Australia, the UK and most countries name the fiscal year by its ending year. Some organisations and countries use the starting year instead, so always check the specific date range when comparing international financial reports.

How are fiscal quarters calculated?

Fiscal quarters divide the fiscal year into 4 equal 3-month periods. In Australia, the financial year quarters are Q1 (July–September), Q2 (October–December), Q3 (January–March) and Q4 (April–June).