This hub tracks tax and superannuation changes taking effect in the 2026-27 Australian financial year, alongside the bands and concessions that stay live from 2025-26. Primary sources: the Australian Taxation Office (ATO) and federal Budget papers, cited at the bottom. Figures update when the ATO publishes indexation numbers and when legislation moves through Parliament.

Stage 3+ second phase income tax cut

From 1 July 2026, the second marginal tax bracket rate drops from 16% to 15%, applied to taxable income between $18,201 and $45,000. This is the legislated second phase of the 2024 Stage 3+ income tax cut.

  • Every taxpayer earning above $18,200 is better off by up to $268 per year compared to 2025-26.
  • The third phase, which cuts the same bracket to 14%, is legislated for 1 July 2027 (a further $268 saving).
  • The Medicare levy (2%) and Medicare levy surcharge rules are unchanged.

2026-27 marginal income tax bands

The full marginal rate schedule for resident taxpayers in 2026-27:

  • $0 to $18,200: 0% (the tax-free threshold).
  • $18,201 to $45,000: 15% (down from 16%).
  • $45,001 to $135,000: 30%.
  • $135,001 to $190,000: 37%.
  • $190,001 and above: 45%.

The Low Income Tax Offset (LITO) gives up to $700 to taxpayers with taxable income up to $37,500, taper-reducing to zero at $66,667. Combined with the tax-free threshold, the effective tax-free income for low earners is around $22,575 in 2026-27.

Medicare levy and the Medicare levy surcharge

The Medicare levy is 2% of taxable income above the low-income threshold. The 2025-26 thresholds (figures for 2026-27 land with the May 2026 Budget):

  • Singles low-income threshold: $27,222 (no levy below this; partial above).
  • Family low-income threshold: $45,907 plus $4,216 per dependent child.
  • Senior / pensioner threshold: $43,020 (single), $59,886 (family).

The Medicare levy surcharge (MLS) applies to higher earners without private hospital cover. 2025-26 thresholds:

  • Singles: 1.0% on income $97,001 to $113,000; 1.25% to $151,000; 1.5% above.
  • Families: 1.0% on income $194,001 to $226,000; 1.25% to $302,000; 1.5% above; plus $1,500 per dependent child after the first.

Superannuation Guarantee: 12%

The Superannuation Guarantee (SG) rate is 12%. The SG reached 12% on 1 July 2025 and that is now the permanent legislated rate. No further increase is scheduled.

The SG applies to ordinary time earnings paid to most Australian employees. The maximum quarterly contribution base is indexed each year; the 2025-26 figure caps SG-payable income at $65,070 per quarter (i.e. $260,280 per year). Earnings above the cap are not SG-payable, although employers can pay above the cap voluntarily.

Payday Super: same-day SG from 1 July 2026

From 1 July 2026, Australian employers must pay SG contributions on the same day they pay wages, rather than quarterly. The change closes the gap that previously let employers hold super for up to three months and is the largest single piece of super reform since the SG was set up in 1992.

The mechanics: every payday, the employer's payroll system must transmit the SG amount through SuperStream into the employee's super fund. Funds must allocate the contribution to the employee's account within three business days. Employers who fail to make a payday payment face a Super Guarantee Charge that includes the unpaid amount, interest, and an administration fee, payable to the ATO rather than the employee's fund.

Better Targeted Super Concessions (Division 296)

From 1 July 2025, an additional 15% tax applies to earnings on the portion of an individual's total superannuation balance above $3 million. The headline rate on the affected portion is therefore 30% (the existing 15% concessional rate plus the new 15% Division 296 levy). Earnings on the portion below $3 million continue to be taxed at 15% in accumulation phase or 0% in pension phase.

The $3 million threshold is not indexed in the legislation. Earnings include unrealised capital gains under the original drafting; the threshold and the unrealised-gains element have been politically contested and may be amended in the second half of 2026 if Parliament returns to the legislation. The first Division 296 assessments will be issued by the ATO in 2026-27 against the 30 June 2026 balance.

Concessional and non-concessional contribution caps

  • Concessional cap (pre-tax): $30,000 per year. Includes employer SG, salary sacrifice, and personal deductible contributions. Indexed in $2,500 increments.
  • Non-concessional cap (post-tax): $120,000 per year. Bring-forward rule allows up to $360,000 over three years if eligible.
  • Carry-forward concessional: Unused concessional cap from the past five years can be added to the current year's cap, provided total super balance is under $500,000 at 30 June of the prior year.
  • Total Super Balance cap: $1.9 million general transfer balance cap (the maximum that can be transferred into a tax-free retirement-phase pension).

HECS / HELP repayments

The 2025-26 HECS-HELP minimum repayment threshold is $67,000. The 2026-27 threshold is indexed by CPI from the March 2026 quarter, with the ATO publishing the new figure in May or June 2026.

From 1 July 2025, HECS indexation uses the lower of CPI or the Wage Price Index, applied retrospectively to the 1 June 2023 indexation. The retrospective recalculation produced an average reduction of around $1,200 on a typical loan balance, with credit refunded against tax owed or returned as a payment.

Repayment rate schedule for 2025-26 (repayment is automatic via PAYG):

  • Under $67,000: 0%.
  • $67,000 to $77,499: 1%.
  • $77,500 to $82,549: 2%.
  • Bands continue rising to a top rate of 10% on income above $137,899.

Capital gains and investment property

The 50% CGT discount for individuals on assets held longer than 12 months is unchanged in 2026-27. Companies do not receive the CGT discount; super funds in accumulation phase receive a 33.3% discount (so the headline 15% becomes 10% on long-held gains).

Negative gearing on investment property remains legal. Investment-property losses can be offset against other taxable income (wages, business income, capital gains). The ATO continues to scrutinise rental claims; the agency's data-matching pulls bond data from state authorities, property-management software, and lender records.

Working from home: the fixed-rate method

From 1 July 2025, the ATO's revised fixed-rate method for working-from-home deductions is 70 cents per hour (up from 67c). The rate covers electricity, gas, internet, mobile phone use, and stationery. Taxpayers using the fixed-rate method must keep a representative record of hours worked from home (a four-week diary in the income year is acceptable).

The actual-cost method remains available for taxpayers with higher work-from-home expenses; this requires apportioning each underlying expense between work and private use. Either method is acceptable, but not both within the same financial year.

Small business instant asset write-off

The instant asset write-off threshold of $20,000 for small businesses (aggregated turnover under $10 million) is extended through 30 June 2026 in the 2025-26 federal Budget. Each asset costing less than $20,000 can be written off in the year of purchase rather than depreciated over its effective life.

Car expense methods

The cents-per-kilometre rate for 2025-26 is 88 cents per kilometre, capped at 5,000 business kilometres per car (so a maximum claim of $4,400). The logbook method (which apportions actual running costs by business-use percentage from a 12-week representative logbook) remains available for higher claims.

Key dates for 2026-27

  • 1 July 2026: 2026-27 financial year begins. Stage 3+ second phase tax cut takes effect. Payday Super begins.
  • 28 July 2026: June quarter PAYG instalment due (those on quarterly cycle).
  • 31 October 2026: 2025-26 individual tax return due if lodging directly without an agent.
  • 15 May 2027: 2025-26 tax return due if lodging through a registered tax agent (most agent clients fall under this extended deadline).
  • 30 June 2027: 2026-27 financial year ends.

What to check before 30 June 2026

  • Concessional contributions: $30,000 cap including employer SG. Top up via salary sacrifice or personal deductible contribution if you have capacity.
  • Carry-forward balances: if your total super balance is under $500,000 you can add unused caps from the past five years.
  • Work-related deductions: receipts plus a representative record where required (motor vehicle logbook, work-from-home hours diary).
  • CGT events: timing of asset sales matters. A sale that crosses 30 June into 2026-27 changes which financial year the gain falls in.
  • Rental property expenses: repairs versus capital improvement classification, depreciation schedule from a quantity surveyor for new investment properties.
  • Private health insurance: hospital cover from 30 June avoids the Medicare levy surcharge for the year.

Glossary

  • Marginal rate: the tax rate that applies to the next dollar earned within a band.
  • LITO: Low Income Tax Offset. Up to $700 reduction in tax payable for low earners.
  • SG: Superannuation Guarantee. The employer-paid super rate. 12% from 1 July 2025.
  • Payday Super: the rule from 1 July 2026 that requires SG payment on the same day as wages.
  • Division 296: the additional 15% tax on super earnings above a $3 million balance, from 1 July 2025.
  • TSB: Total Super Balance. Used to determine eligibility for the carry-forward concessional rule.
  • Transfer balance cap: $1.9 million. The maximum that can move from accumulation into tax-free pension phase.
  • HECS-HELP: the Higher Education Contribution Scheme. Indexed annually by the lower of CPI or WPI from June 2023 onwards.
  • CGT discount: 50% reduction in capital gains for individuals holding the asset longer than 12 months.
  • Fixed-rate method: the 70 cents per hour shortcut for working-from-home deductions from 1 July 2025.

Where to check the live numbers