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.”
