Nearly one in three Aussie small businesses have considered walking away due to stress

Melbourne — 28 May 2026 — New research commissioned by Xero, the global small business platform, has shed light on the rising emotional toll on small business owners across Australia, with nearly a third (31%) having considered giving up their business due to stress.

The findings, released today as Xero's Emotional Tax Return report, show 38% of owners describe their current stress levels as very or extremely severe. Economic uncertainty is a significant driver, with 27% of owners very or extremely concerned about how the economy will affect them in the next financial year.

Other key findings include:

• 73% of small business owners say they can't switch off from work
• 58% have hidden business stress from their family or partner
• 34% are losing more than five hours of sleep per night
• 43% are withdrawing from social activities

Despite all this, more than two thirds (69%) said the stress was worth it or they'd never walk away.

The weight small business owners quietly carry

Dr Luke Martin, Beyond Blue Clinical Spokesperson, said the findings reflect an experience many small business owners share but rarely name.

"Running a business has a way of slowly taking over more of your life than you ever planned. When you're responsible for everything, it's easy for time with friends and family, the things you enjoy, or even basic rest to slip down the list. Most business owners don't choose that on purpose. It just happens when you're trying to keep things afloat," Dr Martin said.

"When something takes up such a big part of your life, it’s not separate from your wellbeing - how things are going in your business really shapes how you’re feeling day to day. That's why it's important to take stock from time to time. Pause and ask: what have I been trading off lately? What matters to me that I've stopped making time for? Often, just noticing those gaps can point to small, doable ways to course-correct."

Tax time amplifies the pressure

The research shows 28% of small business owners find tax time more stressful than the rest of the year. Owners' top three concerns were fear of making a tax mistake (39%), anxiety about fines (35%), and chasing paperwork (32%).

Those pressures contributed to avoidance behaviours, with 37% delaying filing until the last minute and 29% avoiding meetings with their accountant or bookkeeper.

Fear of the unknown was also a factor. More than two thirds (69%) of small business owners said they have experienced a surprising tax outcome, with 53% being negative — either a larger tax bill or a smaller refund than expected.

On average, stress costs business owners more than four hours of productive work every week, equating to around 29 working days lost per year. Financial management alone takes up around 21 hours of their time each month.

Signs of relief — and resilience

There are some promising signs in the data. Of the 73% of small business owners who have adopted AI into their day-to-day work, 65% said it has decreased their stress levels throughout this financial year, and 61% say they are feeling less stressed this tax time as a result. When asked what would help them feel more supported, owners pointed to greater predictability and control over finances (42%) and tools that reduce admin and save time (38%).

Charlie Sheppeard, EGM of Strategy and Operations ANZ at Xero, said the findings paint a picture of the remarkable resilience of small businesses.

"Running a small business takes a real emotional toll on owners. They are absorbing it personally, and our data shows it's costing them sleep, relationships and, in many cases, the headspace they need to run their business effectively. But more than two thirds say it's worth it or they'd never walk away. That kind of commitment deserves to be taken seriously, and it's why recognising and responding to the emotional load of running a business matters," Sheppeard said.

"The economic uncertainty small businesses are navigating right now is real — more than a quarter of owners told us they're very or extremely concerned about what the next financial year holds for them. That context means EOFY arrives with a lot already on owners' plates, and with Payday Super starting on 1 July, there's a new compliance obligation landing at an already pressured time of year. For owners who are feeling the strain, working with an accountant or bookkeeper can take some of the uncertainty out of it — and that alone can make a meaningful difference."

Supporting small business owners

Xero is a proud partner of Beyond Blue, helping small business owners access mental health resources and support during what can be one of the most demanding times of year. Small businesses looking for support can visit Beyond Blue at beyondblue.org.au/get-support.

Emotional Tax Refund

To give something meaningful back to small business owners across Australia, Xero is offering the chance to reclaim a moment that matters — from an anniversary dinner to a long-overdue break that slipped by during the past financial year.

Small businesses can share their story in 150 words or less about a personal moment they missed this year due to business stress that they'd like to claim back. For more information visit: xero.com/etr

ENDS

Media Contact

Xero Australia | Jess Brophy | +61 431 268 549 | jess.brophy@xero.com

About Xero

Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero’s powerful platform helps customers automate routine tasks, get timely insights, and connects them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.

About the research

The research was conducted by One Picture via an online survey of 500 small business owners or senior decision-makers in businesses with up to 200 employees recruited via independent panels between 25 March - 12 April 2026.

About Beyond Blue

Beyond Blue provides mental health information, support and advice to help everyone feel better earlier and stay well. Last year more than 300,000 people contacted Beyond Blue’s free, confidential, 24/7 Support Service. Call 1300 22 4636 or visit www.beyondblue.org.au/get-support.