Tax Changes
Income Tax Rate Cut
The lowest marginal tax rate dropped from 16% to 15% on 1 July 2026 for income between $18,201 and $45,000. This gives most taxpayers up to $268 extra per year. A further cut to 14% is already legislated for 2027–28.
| Bracket | 2025–26 Rate | From 1 July 2026 |
|---|---|---|
| $0 – $18,200 | Nil | Nil |
| $18,201 – $45,000 | 16% | 15% ↓ |
| $45,001 – $135,000 | 30% | 30% (unchanged) |
| $135,001 – $190,000 | 37% | 37% (unchanged) |
| $190,001+ | 45% | 45% (unchanged) |
$1,000 Standard Tax Deduction (New)
From the 2026–27 tax year, you can choose to claim a flat $1,000 deduction for work-related expenses instead of tracking individual receipts. If your actual expenses are more than $1,000, you can still itemise and claim the full amount with receipts. This replaces the old $300 no-receipt threshold and simplifies tax time for millions of workers.
ATO General Interest Charge No Longer Deductible
Since 1 July 2026, the GIC (interest charged on overdue tax debts) is no longer tax deductible. This makes carrying a tax debt more expensive — if you have outstanding ATO debts, paying them down sooner saves you money.
Holiday Home Deduction Changes
Certain holiday homes may be classified as "leisure facilities" from July 2026. Owners may not be able to claim deductions for maintenance unless the property is primarily rented out to generate income. If you own a holiday home that you rent occasionally, check your deduction eligibility with your accountant.
Superannuation Changes
Payday Super (Biggest Change)
Since 1 July 2026, employers must pay your super within 7 days of payday — not quarterly. This is the biggest structural change to super in decades.
| Before July 2026 | From July 2026 | |
|---|---|---|
| Super payment frequency | Quarterly (up to 3 months after you earn it) | Within 7 days of each payday |
| Impact | Your super sits with your employer for months | Your super is invested immediately — more compounding |
| Unpaid super detection | ATO finds out months later | ATO has real-time visibility from day one |
Why this matters: If your employer has been underpaying or delaying super, you'll know much sooner. The ATO will also know immediately, making it harder for employers to skip payments.
Super Contribution Caps Increasing
Both concessional and non-concessional caps rose with indexation on 1 July 2026:
| Cap | 2025–26 | 2026–27 |
|---|---|---|
| Concessional (before-tax) | $30,000 | $32,500 |
| Non-concessional (after-tax) | $120,000 | $130,000 |
| Bring-forward (3-year NCC) | $360,000 | $390,000 |
Division 296 — New Tax on Large Super Balances
Since 1 July 2026, individuals with a total super balance above $3 million pay an additional 15% tax on realised earnings attributable to the portion of their balance between $3 million and $10 million (total 30%). Realised earnings attributable to balances above $10 million face an extra 25% (total 40%). Both thresholds are indexed to CPI.
This affects approximately 90,000 Australians — primarily SMSF holders. If your balance is approaching $3 million, talk to a financial adviser.
Transfer Balance Cap Increasing
The general transfer balance cap increased from $1.9 million to $2.1 million on 1 July 2026 (a $200k lift via AWOTE indexation). This is the maximum amount you can transfer into a tax-free retirement pension. Note: the Total Super Balance threshold for non-concessional contribution eligibility separately moved from $2.0M to $2.1M.
LISTO Increasing
The Low Income Superannuation Tax Offset (LISTO) increases from $500 to $810. The income threshold rises from $37,000 to $45,000. This expands access to about 3.1 million low-income workers, adding up to $15,000 more to their super over a working life.
PPL Super Payments Begin
The government started paying super on Paid Parental Leave from 1 July 2025, but the actual payments to super funds happen from 1 July 2026 (paid annually after the end of the relevant financial year). If you received PPL in 2025–26, your super payment arrives from July 2026.
Unused 2020–21 Carry-Forward Caps Expire
Unused concessional cap amounts from 2020–21 expired permanently on 30 June 2026. You can only carry forward unused amounts for 5 years — unused 2021–22 amounts are next to expire, on 30 June 2027. If your super balance is under $500,000, catch-up contributions remain a powerful lever.
Energy and Cost of Living
Solar Sharer Scheme
From July 2026, households in NSW, south-east Queensland, and South Australia will have access to free electricity for 3 hours per day through the Solar Sharer scheme. If you can shift your electricity usage (washing machine, dishwasher, EV charging) into the free window, you'll save on your power bill — whether or not you have solar panels.
Paid Parental Leave
PPL Expanding to 26 Weeks
Paid Parental Leave increased from 24 weeks (120 days) in FY 2025-26 to 26 weeks (130 days) on 1 July 2026 — the final leg of the legislated PPL extension. This is at the national minimum wage rate ($1,004.90/week). With the 12% Super Guarantee paid on PPL days (which began 1 July 2025), the full 130 days is worth about $26,130 plus around $3,135 in super for FY 2026-27.
What the Pre-EOFY Checklist Covered (Before 30 June 2026)
Our full EOFY 2026 checklist walks through each of these in detail. Before 30 June, the key moves were:
- Use any remaining 2020–21 carry-forward super cap — it expired permanently on 30 June
- Max out your 2025–26 concessional contributions ($30,000 including employer super)
- Pay any ATO debts — the GIC became non-deductible on July 1
- Review your super balance — if you're near $3M, get advice on Division 296 implications
- Check your employer is paying super — with payday super from July, late payments will be caught immediately
- Lodge your 2024–25 return if you haven't — ensure your FTB, CCS, and LITO are reconciled
- Review your work-related deductions — the new $1,000 standard deduction may simplify your 2026–27 return
Frequently Asked Questions
How much extra will I get from the tax cut?
Up to $268 per year. The 16% rate dropped to 15% on 1 July 2026 for income between $18,201 and $45,000. A further cut to 14% is legislated for 2027–28.
What is payday super?
Since 1 July 2026, your employer must pay your super within 7 days of each payday — not quarterly. This means your super is invested sooner and the ATO can detect unpaid super immediately.
What is the $1,000 standard deduction?
A new flat $1,000 deduction for work-related expenses, no receipts needed. If your actual expenses exceed $1,000, you can still claim the full amount with documentation. This replaces the old $300 no-receipt threshold.
Does Division 296 affect me?
Only if your total super balance exceeds $3 million. Balances below $3M continue to be taxed at 15%. This affects about 90,000 Australians.
What is the Solar Sharer scheme?
Free electricity for 3 hours per day for households in NSW, south-east QLD, and SA from July 2026. You don't need solar panels — all connected households can access it.