Senior Australians and Pensioners Tax Offset (SAPTO)
A tax offset of up to $2,230 (single) for eligible seniors and pensioners, effectively raising the tax-free income level.
The Senior Australians and Pensioners Tax Offset (SAPTO) is a non-refundable tax offset available to eligible older Australians who receive a qualifying government pension or allowance, or who meet the age requirements for the Age Pension (even if they don't receive it). For 2026–27, SAPTO provides up to $2,230 for singles and up to $1,602 for each member of a couple.
To be eligible, you must meet the age requirement (67 or older), satisfy the income test, and either receive a qualifying government pension/allowance or meet the Age Pension age but not receive a pension. Combined with the tax-free threshold and LITO, SAPTO means eligible singles can have rebate income up to approximately $36,950 before paying any income tax in 2026–27, and couples up to about $30,500 each.
SAPTO phases out as your rebate income increases. For singles, it reduces by 12.5 cents for every dollar of rebate income above the shade-out threshold. Rebate income includes taxable income plus some additional amounts like reportable super contributions, net investment losses, and certain tax-free government pensions. This can make SAPTO calculations complex for retirees with diverse income sources.
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Tax Offset (Rebate)
A direct reduction in the amount of tax you owe, different from a deduction which reduces taxable income.
Low Income Tax Offset (LITO)
A non-refundable tax offset of up to $700 for individuals with taxable income below $66,667.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.
Tax-Free Threshold
The first $18,200 of annual income that is not subject to income tax for Australian residents.
Preservation Age
The minimum age at which you can access your super savings, ranging from 55 to 60 depending on your date of birth.