Lodging your 2025-26 tax return this year? The Medicare levy low-income thresholds rose, the $2 minimum for gift deductions was scrapped, and the work-from-home fixed rate holds at 70 cents an hour. Here's everything that's actually different this tax time.
Key facts
| What changed | Before | Now |
|---|---|---|
| Self-lodge deadline | — | 31 October 2026 |
| Via registered tax agent | — | Up to 15 May 2027 |
| Work-from-home fixed rate | — | 70 cents/hour (unchanged) |
| Gift deduction minimum | $2 | Removed |
| Medicare levy singles threshold | $27,222 | $28,011 |
Deadlines haven't moved
If you lodge your own 2025-26 return, it's due by 31 October 2026. Engage a registered tax agent before that date and your deadline can extend out to 15 May 2027, provided you're on their client list by 31 October. Missing the self-lodge deadline without an agent can trigger a failure-to-lodge penalty, so it's worth registering with an agent early if you think you'll run late.
Most people can prefill a large chunk of their return through myGov, since employer, bank and health insurer data typically flows through automatically by late July. Waiting a couple of weeks after 1 July before lodging often means less manual entry and fewer amendments later, particularly if you have income from multiple sources.
Medicare levy thresholds are higher
Low-income Medicare levy thresholds rose 2.9% for 2025-26, backdated to 1 July 2025. The singles threshold lifted from $27,222 to $28,011, and the family threshold from $45,907 to $47,238 (see our Medicare levy thresholds explainer for the full table. The ATO applies this automatically; there's nothing extra to claim.
Work-from-home claims stay the same
The fixed rate method for working-from-home expenses stays at 70 cents per hour for 2025-26, unchanged from 2024-25. You can still separately claim depreciation on assets costing more than $300, work-related purchases up to $300, and home office cleaning and repair costs on top of the fixed rate. Just keep a record of the hours you worked from home across the year.
If you'd rather itemise, you can still use the actual cost method instead of the fixed rate, claiming the work-related portion of your actual electricity, internet, phone and depreciation costs with supporting records. Most people find the fixed rate simpler unless their actual running costs are unusually high, so compare both before you decide which to use on this year's return.
Smaller changes worth knowing
The $2 minimum donation threshold for deductible gift recipients has been removed, backdated to gifts made from 1 July 2024, so any eligible gift, no matter how small, is now deductible with a receipt (political donations still need to be $2 or more). And if you incur general interest charge or shortfall interest charge from 1 July 2025 onward, you can no longer claim that interest as a tax deduction on your 2025-26 or later returns.
HECS and HELP debtors also face a genuinely new element this tax time: this is the first full year the marginal repayment system and the FY2026-27 threshold settings interact with an assessment, after 2.8% indexation was applied on 1 June 2026. See our first tax return under the new HECS system for what that means for your notice of assessment.
What this means for your pay
None of this year's changes affect your fortnightly pay packet. They show up in your refund or tax bill once you lodge. Note that the $1,000 instant deduction does not apply to this year's return; see our $1,000 instant deduction explainer for when it kicks in. Estimate your refund now with the tax return calculator.