What's Changing in Australian Tax 2026-27 — Stage 3+ Phase 2, Super, EOFY Action List
Last reviewed:
Primary tax-year context: 2026-27
This article is general information only. We maintain pages using primary-source checks and date-based reviews. See editorial policy.
General information only — not tax or financial advice. Post-13 May 2026 Budget update will land at the bottom of this page.
The Australian financial year flips on 1 July 2026. One change is locked in by legislation, a few are sitting in Treasury waiting for Budget night (13 May 2026), and several headline rates stay exactly the same. This page covers what’s actually changing in your paycheck and your return, with worked examples, and the pre-1-July action list to capture or defer.
If you want the side-by-side technical reference, see 2025-26 vs 2026-27 tax changes. For Budget night live updates, the Budget 2026 hub is the dashboard.
The one change that’s already legislated
Second marginal rate drops from 16% to 15% on taxable income between $18,201 and $45,000.
This is phase 2 of 3 of the Stage 3+ tax cut package legislated under the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024. Phase 1 landed on 1 July 2024 (cut the 19% rate to 16% and the 32.5% rate to 30%). Phase 3 — dropping the second rate again from 15% to 14% — is legislated to commence on 1 July 2027.
| Taxable income band | 2025-26 rate | 2026-27 rate |
|---|---|---|
| $0 – $18,200 | 0% | 0% |
| $18,201 – $45,000 | 16% | 15% ⬇ |
| $45,001 – $135,000 | 30% | 30% |
| $135,001 – $190,000 | 37% | 37% |
| Above $190,000 | 45% | 45% |
The maths: every dollar between $18,201 and $45,000 is taxed 1% less. That’s a maximum saving of $268.00 per year for everyone earning above $45,000 (1% × $26,800). Below $45,000 the saving scales with how much of that band you actually fill.
How much you actually save
Tax + Medicare levy at representative incomes (no LITO, no MLS):
| Taxable income | 2025-26 tax | 2026-27 tax | Saving |
|---|---|---|---|
| $25,000 | $1,792 | $1,724 | $68 |
| $45,000 | $4,788 | $4,520 | $268 |
| $65,000 | $11,488 | $11,220 | $268 |
| $90,000 | $19,288 | $19,020 | $268 |
| $120,000 | $30,288 | $30,020 | $268 |
| $180,000 | $52,038 | $51,770 | $268 |
| $250,000 | $90,000 | $89,733 | $267 |
The headline isn’t enormous — but it’s automatic, applied via your payroll PAYG schedule from the first pay period that starts on or after 1 July 2026. Try the income tax calculator with the dual-year toggle to see your own number.
What stays exactly the same
These are legislated at their current values and won’t move on Budget night:
- Superannuation Guarantee 12% — permanent since 1 July 2025, the SGAA 1992 legislated maximum
- Medicare levy 2% — unchanged since 2014-15 (shade-in thresholds index, but the rate doesn’t)
- CGT discount 50% — for individuals on assets held > 12 months
- FBT rate 47% — locked to the top marginal + Medicare equivalent
- Company tax 25% / 30% — base rate entities (turnover ≤ $50M, ≤ 80% passive income) at 25%, otherwise 30%
- GST 10% — unchanged since introduction; out of scope for any Budget
- Tax-free threshold $18,200 — first marginal rate at 0%
If you read a news headline claiming any of those is changing on 1 July 2026, double-check against the ATO rates page before changing anything in your tax planning.
What’s still TBD — Budget night 13 May 2026
These are CPI-indexed or AWOTE-indexed and Treasury announces the new figures on Budget night. Until then, every threshold below carries its 2025-26 placeholder. The figures most likely to move:
- Medicare Levy Surcharge tiers — singles currently $101k / $118k / $158k; families $202k / $236k / $316k
- HELP/HECS minimum repayment threshold — currently $67,000; March CPI indexes this
- Concessional super cap — currently $30,000; AWOTE-indexed (may rise to $32,500)
- Non-concessional cap — currently $120,000 (= 4× concessional, moves in lockstep)
- Bring-forward cap — currently $360,000 (= 3× non-concessional)
- Government co-contribution income bands — currently $47,488 / $62,488
- Medicare levy shade-in thresholds (single, couple, senior, family + dependant)
- LITO max $700 + taper points
- Cents-per-km work-related car deduction rate — currently 88c/km
- Car depreciation cost limit — currently $69,674
- Luxury Car Tax thresholds — currently $91,387 (fuel-efficient) / $80,567 (standard)
- Instant Asset Write-Off threshold — currently $20,000; annual announcement, may extend or change
- Div 7A benchmark interest rate — currently 8.37%; ATO publishes May for the following FY
- PHI rebate tiers — re-indexed 1 April each year by the Department of Health
If a threshold is announced, our 2026-27 calculator config picks it up by ~9 pm 13 May. If it’s not announced and indexation applies, the field stays at 2025-26 placeholder until the ATO publishes the indexed value (typically June for super, September for the rest).
Pre-1-July action list (what to do before EOFY)
Even though most numbers stay similar, every dollar of taxable income shifted from 2026-27 back to 2025-26 sits in the higher 16% second-rate band rather than the 15% one. That makes the timing call sharper than usual for low-to-mid earners.
If your taxable income falls between $18,201 and $45,000:
- Defer deductible expenses to 2026-27: prepay rental property interest, premium income protection, work-related course fees if eligible — every $1,000 of deductions is worth $10 more in 2025-26 tax than 2026-27
- Bring deductible income forward into 2025-26: opposite logic for high-income earners considering bonus timing — see does salary sacrifice still help on $300k?
Beyond the 1% rate effect, the standard EOFY moves don’t change:
- Concessional super contribution before 30 June if you have headroom — see carry-forward rules
- Realise capital losses to offset capital gains — see CGT planning
- Donate to DGR before 30 June — see DGR donation timing
- Instant Asset Write-Off for sole traders / small business — assets installed and ready for use by 30 June qualify under 2025-26 rules — see IAWO timing
What changes on Budget night that’s NOT in this list
A small number of items can be announced as new measures rather than threshold updates. Watch for:
- Stage 4 announcements — any extension beyond the legislated 14% phase 3 in 2027-28
- Div 296 changes — the $3M super tax came into effect 1 Jul 2025 with the dual-tier structure ($3M+15%, $10M+25%); watch for indexation announcements
- CGT discount review — Senate Inquiry reported in early 2026; any Treasury response would land here
- First Home Super Saver Scheme cap — $50,000 lifetime / $15,000 annual; may be announced higher
- Small business simplified depreciation pool — annual extension is by Budget announcement
If any of those move, this article gets a dated update note at the top.
Where to verify everything
- ATO rates: Individual income tax rates · Super rates · Study and training loan rates
- Treasury: Stage 3+ tax cut package · Budget portal
- Our coverage: 2025-26 vs 2026-27 technical comparison · Budget 2026 hub · pre-Budget watch list
Last updated 2026-04-25 (pre-Budget). This article will be augmented with confirmed 2026-27 figures within 24 hours of the 13 May 2026 Federal Budget.