Living Document
This page will be updated as further changes are confirmed. Last updated: 5 August 2026.
FY2026-27 Tax Year Overview
The 2026-27 financial year runs from 1 July 2026 to 30 June 2027. The year's settings are now confirmed: the legislated rate cut took effect on 1 July 2026, the ATO has published the 2026-27 HELP repayment thresholds and super contribution caps, and the headline measures from the 12 May 2026 federal budget — including the CGT changes that start on 1 July 2027 — have passed into law.
Building on the Stage 3 structure that took effect on 1 July 2024, the legislated cost-of-living tax cuts lower the first marginal rate from 16% to 15% on 1 July 2026 (and to 14% from 1 July 2027). For anyone earning $45,000 or more, that is a tax cut of $268 per year in FY2026-27. All other rates and thresholds carry over from FY2025-26.
Confirmed Changes for FY2026-27
First Tax Rate Drops from 16% to 15%
Under the cost-of-living tax cuts legislated in 2025, the marginal rate on income between $18,201 and $45,000 falls from 16% to 15% on 1 July 2026. This delivers up to $268 in annual tax savings, with the full amount going to anyone earning $45,000 or more. A further cut to 14% is legislated for 1 July 2027. PAYG withholding schedules have been updated accordingly — see our PAYG withholding tables for the new weekly, fortnightly and monthly amounts.
Super Guarantee Stays at 12%
The Superannuation Guarantee (SG) rate reached its legislated ceiling of 12% on 1 July 2025 after a decade-long incremental increase from 9.5%. No further increases are legislated for FY2026-27 or beyond. Employers must continue paying SG on ordinary time earnings up to the maximum super contribution base.
The concessional contributions cap is $32,500 for FY2026-27 (up from $30,000), and the non-concessional cap is $130,000 — both confirmed by the ATO and applying from 1 July 2026. These caps are indexed to Average Weekly Ordinary Time Earnings (AWOTE) and are rounded down to the nearest $2,500.
Payday Super Starts
Payday Super commenced on 1 July 2026. Employers must now get super guarantee contributions into your fund within 7 business days of each payday instead of quarterly, and the maximum contribution base became an annual figure of $270,830. Late payments attract a rebuilt super guarantee charge with interest at the general interest charge rate — 11.43% for July–September 2026. That rate resets quarterly, with the next rate due mid-September 2026.
One transition measure is still pending: relief to avoid employees exceeding their concessional contributions cap in 2026-27 because Payday Super shifted the timing of contributions was announced by Treasury, 24 February 2026, but it is not yet law — the ATO's changeover page still says “This is not yet law.” Treat the $32,500 cap as it stands until legislation passes.
HECS-HELP Thresholds Confirmed
The ATO has published the 2026-27 HELP/STSL repayment thresholds — see Study and training support loans rates and repayment thresholds. You repay nothing on repayment income up to $69,528 (up from $67,000 in FY2025-26). Above that, repayments are 15c for each $1 over $69,528 up to $129,717, then $9,028 plus 17c for each $1 over $129,717 up to $186,050, and 10% of total repayment income from $186,051.
Under this marginal system, introduced in FY2025-26, you only pay the repayment percentage on income above each threshold, not on your entire income. Work out your exact repayment with the HECS-HELP Calculator, or see our HECS-HELP Guide for the full breakdown.
Medicare Levy Thresholds
The Medicare levy low-income thresholds are adjusted annually, but the ATO publishes them in arrears: its threshold pages (last updated 30 June 2026) still show only the 2025-26 figures, and no 2026-27 thresholds have been legislated yet. The operative numbers are therefore the 2025-26 ones — no levy below $28,011 for singles, phasing in at 10c per dollar up to $35,013 (the singles upper threshold), with the family threshold starting at $47,238 plus $4,338 per dependent child.
The Medicare Levy Surcharge tiers are confirmed for FY2026-27: the surcharge starts above $105,000 for singles and $210,000 for families, at rates of 1% to 1.5% for anyone without private hospital cover.
CGT Discount Replacement Is Now Law (From 1 July 2027)
The 2026-27 budget's capital gains reforms have passed into law: from 1 July 2027, the 50% CGT discount for individuals, trusts and partnerships is replaced with cost base indexation and a 30% minimum tax rate on capital gains, applying only to gains that accrue after that date. Nothing changes for assets sold during FY2026-27, and the ATO has not yet published indexation or apportionment guidance. See the Capital Gains Tax Calculator for the current rules.
Other Confirmed FY2026-27 Settings
Tax Bracket Indexation
Australia does not automatically index income tax bracket thresholds to inflation — threshold changes require legislation. The bracket thresholds are unchanged for FY2026-27; the only legislated change is the rate cut on the first taxable bracket described above. See the current tax brackets for full detail.
The FY2026-27 brackets are:
| Taxable Income | Tax Rate |
|---|---|
| $0 – $18,200 | 0% |
| $18,201 – $45,000 | 15% (was 16%) |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
Low Income Tax Offset (LITO)
LITO provides up to $700 in tax offset for low-to-middle income earners. The offset phases out between $37,500 and $66,667. These thresholds are not automatically indexed, so any changes would require budget legislation. No changes have been flagged.
Minimum Wage — FWC Annual Review
The Fair Work Commission conducts its Annual Wage Review each financial year, typically announcing the new national minimum wage in June for effect from 1 July. The FWC's 2 June 2026 decision lifted the national minimum wage from $24.95 to $26.44 per hour ($1,004.90 per week), effective 1 July 2026, alongside a 4.75% award wage increase.
Impact on Take-Home Pay
The legislated rate cut lifts take-home pay by up to $268 a year (about $5.15 a week) for employees at the same nominal salary, with the full benefit reaching anyone earning $45,000 or more. On top of that, the indexed HECS threshold and the FWC minimum wage decision shape the final numbers.
The table below shows annual take-home pay at key salary levels, computed from the same FY2026-27 tax engine that powers the site's calculators (LITO and the 2% Medicare levy included; no HECS debt, no MLS, resident status).
| Gross Salary | FY2025-26 Take-Home | FY2026-27 Take-Home | Difference |
|---|---|---|---|
| $60,000 | $50,112 | $50,380 | +$268* |
| $80,000 | $63,612 | $63,880 | +$268* |
| $100,000 | $77,212 | $77,480 | +$268* |
| $120,000 | $90,812 | $91,080 | +$268* |
| $150,000 | $110,162 | $110,430 | +$268* |
| $200,000 | $139,862 | $140,130 | +$268* |
*Reflects the legislated 16% → 15% rate cut on income between $18,201 and $45,000 from 1 July 2026. Excludes HECS, MLS, and salary sacrifice.
How to Prepare for FY2026-27
Salary Sacrifice Timing
If you are considering increasing salary sacrifice into superannuation, review your arrangements early in the financial year. The concessional contributions cap applies per financial year, so timing contributions strategically can maximise your tax benefit. Use our Salary Sacrifice Calculator to model different scenarios.
Super Contribution Planning
With the SG rate locked at 12%, any additional super contributions must come from salary sacrifice or personal after-tax contributions. The carry-forward rule allows you to use unused concessional cap amounts from the previous 5 years if your total super balance is under $500,000. This can be particularly valuable for one-off bonus years.
Action Item
Review your current salary sacrifice arrangements, HECS balance, and private health insurance status. Use our Income Tax Calculator to model your FY2026-27 take-home pay.
HECS Voluntary Repayments
If you hold a HECS-HELP debt, consider making a voluntary repayment before 1 June 2027, when the next annual indexation is applied. With the indexation cap set at the lower of CPI or WPI, the rate is moderate but still adds to your debt each year.
Private Health Insurance Review
If your income is approaching the FY2026-27 Medicare Levy Surcharge threshold of $105,000 for singles, compare the cost of basic hospital cover against the 1% surcharge. See our Private Health Insurance & Medicare guide for a detailed comparison.
Frequently Asked Questions
Tax changes 2026-27 questions and answers
What are the main tax changes for FY2026-27?
The headline change is the legislated cost-of-living tax cut: the rate on income between $18,200 and $45,000 drops from 16% to 15% on 1 July 2026, worth up to $268 a year once you earn $45,000 or more. The super guarantee stays at 12% while Payday Super begins, and the HECS-HELP repayment threshold rises to $69,528.
Will tax brackets change in 2026-27?
Yes. The legislated cost-of-living tax cuts reduce the rate on income between $18,200 and $45,000 from 16% to 15% on 1 July 2026 — worth up to $268 a year — with a further cut to 14% on 1 July 2027. Bracket thresholds themselves are unchanged.
What is the super guarantee rate for 2026-27, and is it going up again?
No. The super guarantee rate remains at 12% for FY2026-27 — it reached its legislated ceiling of 12% on 1 July 2025 after a decade-long increase from 9.5%, and no further increases are currently scheduled. Any additional rise would require new legislation from Parliament.
What will the HECS threshold be in 2026-27?
The FY2026-27 HECS-HELP threshold is $69,528, up from $67,000 in FY2025-26. Above it you repay 15c per $1 up to $129,717, then $9,028 plus 17c per $1 up to $186,050, and 10% of total repayment income beyond that.
When is the 2026 federal budget?
The 2026-27 federal budget was delivered on 12 May 2026. Its headline tax measures — including the CGT reforms that apply from 1 July 2027 — have since passed Parliament and are now law.
Will LITO change in 2026-27?
The Low Income Tax Offset is not automatically indexed. It currently provides up to $700 for incomes up to $37,500, phasing out completely at $66,667. The May 2026 budget made no change to LITO, so these settings carry over unchanged for FY2026-27.
When will the new minimum wage be announced?
The Fair Work Commission typically announces the new minimum wage in June each year, effective from the first full pay period on or after 1 July. The FWC's 2 June 2026 Annual Wage Review decision set the current minimum wage at $26.44 per hour ($1,004.90 per week for a 38-hour week), effective 1 July 2026.
About this guide▼
Information is based on current legislation, ATO publications, and scheduled indexation formulas. Anything not yet legislated (such as the Payday Super cap relief) is clearly marked as pending. Take-home pay figures are computed from the FY2026-27 rates in the site's tax engine, with FY2025-26 figures shown for comparison. This page is updated as new information becomes available from the ATO, Treasury, and federal budget announcements.
Sources & References
- 1Individual income tax rates— Australian Taxation Office
- 2Super guarantee rate— Australian Taxation Office
- 3Study and training support loans rates and repayment thresholds— Australian Taxation Office
- 4Medicare levy thresholds— Australian Taxation Office
- 5General interest charge rates— Australian Taxation Office
Last verified: 28 July 2026. Our content is based on the latest information from official Australian government sources.
James Harrington
Verified AuthorSenior Tax & Payroll Analyst
CPA, Registered Tax Agent (25787011)
James is a CPA-qualified tax professional with over 14 years of experience in Australian taxation and payroll systems. He spent six years at the Australian Taxation Office working on PAYG withholding and individual tax return processing before moving into financial publishing. He now leads the tax content at Pay Calculator Australia, translating complex ATO legislation into clear, actionable guidance.
Areas of Expertise