Federal Budget 13 May 2026: What to Watch for Your Tax — Preview (ATO Thresholds)
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Primary tax-year context: Current Australian tax settings
This article is general information only. We maintain pages using primary-source checks and date-based reviews. See editorial policy.
General information only. This is not tax or financial advice. Post-Budget updates land on this page by 14 May 2026.
The 2026 Federal Budget is handed down at 7:30 pm AEST on Tuesday 13 May 2026 by Treasurer Jim Chalmers. It’s the first Budget of the new parliamentary year, and it lands in the middle of tax-planning season for millions of Australians filing their 2025-26 returns.
This page lists what to watch, what’s legislated regardless of the Budget, and where to look on Budget night for the numbers that matter. It will be updated live from ~9pm 13 May with confirmed figures.
Bookmark our Budget 2026 hub for the Budget-night dashboard.
What’s Already Legislated (Not Affected by the Budget)
These changes are locked in for 1 July 2026 regardless of what the Budget does:
| Change | From | To | Affects |
|---|---|---|---|
| Second marginal rate | 16% | 15% | Everyone earning $18,201-$45,000 (save up to $268/yr) |
| SG rate | 12% | 12% (no change) | Every employee |
| CGT discount | 50% | 50% (unchanged at legislated level) | Asset holders > 12 months |
| Company base rate | 25% | 25% | Base rate entities under $50m turnover |
| FBT rate | 47% | 47% | Employers providing fringe benefits |
| Medicare levy | 2% | 2% | All resident taxpayers above shade-in |
The 2025-26 vs 2026-27 comparison page has the full rate table.
Six Things to Watch on Budget Night
1. Indexed thresholds (the boring but important ones)
Many thresholds move with CPI or wage growth. They’re usually announced in the Budget rather than the Mid-Year Economic and Fiscal Outlook (MYEFO). Watch for 2026-27 figures on:
- Medicare Levy Surcharge (MLS) tiers — currently $101k / $118k / $158k (singles)
- HELP/HECS minimum repayment threshold — currently $67,000; indexed to March CPI
- Superannuation concessional cap — currently $30,000
- Super non-concessional cap — currently $120,000
- Government co-contribution income bands — currently $45,400 / $60,400
- Medicare levy shade-in / LITO tapers
These feed straight into our income tax calculator, HELP repayment calculator, and MLS calculator.
2. Instant Asset Write-Off (IAWO)
The $20,000 IAWO for small businesses (< $10m aggregated turnover) has been extended year-by-year. The 2025-26 extension ends 30 June 2026. Watch for:
- Extension to 2026-27
- Threshold change (up to $30k or $50k has been floated)
- Aggregated turnover cap adjustment
3. Division 296 ($3M super tax)
Div 296 — the extra 15% tax on super balances above $3 million — is legislated to commence 1 July 2026 but has faced delays and amendment pressure. Watch for:
- Start date confirmation or deferral
- Whether unrealised gains stay in the tax base (controversial — industry pushback)
- Threshold indexation (currently non-indexed $3M)
Our Division 296 calculator models the current-law design; we’ll update it Budget night if announced changes land.
4. 50% CGT discount
The Senate Select Committee on the 50% CGT discount reported 17 March 2026 (see our analysis). The Treasurer didn’t rule out changes. Watch for:
- Rate change (50% → 33% has been modelled)
- Holding-period change (12 months → 5 years for property)
- Grandfathering rules for existing asset holders
- Targeted property vs broad-based change
5. Negative gearing changes
Like CGT discount, the Treasurer has declined to rule out negative gearing changes. Scenarios to watch:
- Cap on deductible losses against wage income
- Limit to new-build properties only (cf. 2019 Labor policy)
- Phased transition with grandfathering
If anything lands, our negative gearing calculator and property investment tools update the same night.
6. Energy and EV concessions
- FBT electric car exemption — current-law cut-off for plug-in hybrids was 1 April 2025. Watch for extension or tightening.
- Fuel-efficient vehicle LCT threshold — 2025-26 is $91,387; will index
- New EV rebate schemes — possible given election-cycle timing
Budget Night Timeline
| Time (AEST) | Event |
|---|---|
| 7:30 pm, 13 May 2026 | Treasurer delivers Budget speech |
| 7:30-8:30 pm | Budget papers released on budget.gov.au |
| 8:30 pm onwards | Detailed measure-by-measure analysis in Treasury and Budget Paper 2 |
| 9:00-11:00 pm | austax.tools updates published — 2026-27 config values, calculators reflect new thresholds, this page’s “Announced” table filled in |
| 14 May morning | Treasurer’s press conference, industry reactions |
| End May – June 2026 | ATO publishes PAYG withholding tables for 1 July 2026 |
Will the Budget Affect My 2025-26 Tax Return?
Mostly no. The 2025-26 tax year ends 30 June 2026 — six weeks after Budget — and almost all Budget measures start from 1 July 2026 (i.e. the 2026-27 year). The main exception: measures explicitly backdated (rare outside natural-disaster relief) or measures that affect returns lodged after Budget night (e.g. new anti-avoidance measures).
Use our EOFY planner to make sure your 2025-26 position is locked in before Budget night changes the 2026-27 landscape.
Post-Budget Updates Schedule
Once the Budget is handed down, we update:
- This page’s “Announced” section — what was confirmed, what surprised, what didn’t happen
- Budget 2026 hub — itemised measure list with calculator links
- Central tax-year config — every 2026-27 TODO in
src/data/taxYears/2026-27.tsfills with announced figures (53 threshold placeholders) - 2025-26 vs 2026-27 changes page — comparison tables rebuild from the new config
- Impacted calculators — MLS, HELP, super contribution, IAWO, Div 293/296, Medicare shade-in, LITO, car depreciation cost limit
Expected turnaround: publish-ready by 11pm AEST, 13 May 2026 — the Budget-night update checklist is documented internally so nothing is missed.
Useful Calculators and Scenarios
- 2025-26 vs 2026-27 tax changes comparison
- Income tax calculator — reflects the legislated 15% bracket
- Medicare Levy Surcharge calculator — updates with new 2026-27 thresholds
- HELP/HECS repayment calculator
- Superannuation contribution calculator
- Division 293 / 296 calculator
- Instant Asset Write-Off calculator
- EOFY planner 2025-26