Australia Tax Cut Calculator 2026-27: New Rates From 1 July 2026

Australia Take-Home Pay Calculator

The new 2026-27 tax brackets

For 2026-27 (1 July 2026 to 30 June 2027), Australian resident rates per the ATO are: nil on taxable income up to $18,200; 15% on $18,201–$45,000 (down from 16%); 30% on $45,001–$135,000; 37% on $135,001–$190,000; and 45% above $190,000. The only change from 2025-26 is the second-bracket rate — every threshold stays put, as does the 2% Medicare levy charged separately. The cut was legislated in March 2025 through the Treasury Laws Amendment (More Cost of Living Relief) Act 2025, which also locks in a second step: the 15% rate falls to 14% from 1 July 2027. Because the 15% band covers $26,800 of income ($18,201 to $45,000), the arithmetic is simple — one percentage point off that band is worth at most 1% × $26,800 = $268 a year, and everyone with taxable income of $45,000 or more receives exactly that. Earn less than $45,000 and your saving is 1% of whatever you earn above the $18,200 tax-free threshold. The Low Income Tax Offset (up to $700, fully shaded out at $66,667) is unchanged, so lower earners keep it on top of the new rate. Verify your position against the ATO's published 2026-27 tables before adjusting anything.

How much is the July 2026 tax cut worth? Worked examples

These examples compare 2025-26 and 2026-27 tax payable, excluding the 2% Medicare levy and offsets, which this measure does not change. On $45,000: 2025-26 tax is 16% × $26,800 = $4,288; 2026-27 tax is 15% × $26,800 = $4,020 — a saving of $268. On $67,000 (a typical wage for all employees, a little below the ~$74,000 median): $4,288 + 30% × $22,000 = $10,888 falls to $4,020 + $6,600 = $10,620 — saving $268. On $100,000: $20,788 becomes $20,520 — again $268. On $150,000: $4,288 + 30% × $90,000 + 37% × $15,000 = $36,838 drops to $36,570 — still $268. The pattern is the point: this is a flat-dollar cut. Once taxable income clears $45,000, everyone from a nurse to a surgeon saves the same $268 a year, about $5.15 a week. Below $45,000 the saving scales down — a part-timer on $30,000 saves 1% × ($30,000 − $18,200) = $118. From 1 July 2027 the band rate drops to 14%, doubling the maximum annual saving to $536 against 2025-26 settings. Treasury's factsheet puts the average total tax cut, counting the 2024 stage-3 changes, at about $2,229 in 2026-27 — a reminder that most of the relief already in your payslip predates this July's change.

Payday super from 1 July 2026: what changes and what workers should check

From 1 July 2026, employers must pay the 12% superannuation guarantee at the same frequency as wages, not quarterly. Under the payday super rules (legislated via the Treasury Laws Amendment (Payday Superannuation) Act 2025 and administered by the ATO), contributions must reach the employee's fund within 7 business days of each payday, with limited longer windows — for example, for brand-new employees. SG is also calculated on "qualifying earnings", a new base consolidating ordinary time earnings, commissions, and salary-sacrificed amounts. Miss the window and a redesigned superannuation guarantee charge applies, with additional penalties of up to 200% of the charge in serious cases — partial remission is possible per current ATO guidance. What workers should check after the first July pay run: first, that your payslip shows a super amount every cycle — on a $67,000 salary paid fortnightly, that's 12% × $2,576.92 = about $309.23 per payday; second, that the money actually lands in your fund within a week or two — log into your fund rather than trusting the payslip line; third, that year-to-date super tracks roughly 12% of qualifying earnings. The change mainly protects people who lost compounding, or entire balances, to the old quarterly lag when employers failed. Small employers should note the ATO's Small Business Superannuation Clearing House is being retired as part of this transition — verify your replacement channel before the first payroll run.

How we got here: stage 3 and the 2025 top-up cuts

This July's cut is the third act in a long saga. The original stage 3 package, legislated in 2019, was redesigned by the Albanese government from 1 July 2024: the 19% rate fell to 16%, the 32.5% rate to 30%, the 37% threshold rose to $135,000 and the 45% threshold to $190,000. The March 2025 federal budget then added a top-up — the two further cuts to the bottom rate now arriving as 15% (2026-27) and 14% (from 2027-28) — passed as the Treasury Laws Amendment (More Cost of Living Relief) Act 2025. The design choice shapes who benefits: because the top-ups apply only to the $18,201–$45,000 band, they deliver the same dollar amount to everyone above $45,000, which makes them proportionally most valuable to lower earners — $268 is nearly 1% of after-tax income around $35,000 but a rounding error at $200,000. There is also a fourth act, now locked in: announced in the 2026-27 Budget and legislated in June 2026 through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received royal assent on 26 June 2026, the Working Australians Tax Offset of up to $250 a year applies from 2027-28, lifting the effective tax-free threshold for workers to $19,985 — just shy of $20,000.

How the cut interacts with the Medicare levy

The tax cut does not touch the Medicare levy, which remains 2% of taxable income for most residents under the Medicare Levy Act 1986. Your all-in marginal rate in the second bracket therefore falls from 18% to 17% (15% tax plus 2% levy), and the $268 saving calculated above is unaffected, because the levy is computed separately on the same taxable income. Where the levy does move is at the bottom: low-income thresholds are indexed most years, and the most recent uplift raised the 2025-26 thresholds by 2.9% to $28,011 for singles and $47,238 for families (plus $4,338 per dependent child), with $44,268 for single seniors and pensioners — applied retrospectively from 1 July 2025. Below the threshold you pay no levy at all; just above it, the levy phases in at 10 cents per extra dollar earned until it reaches the full 2%. Thresholds for 2026-27 are typically confirmed in a later budget, so verify the current figures before lodging. The Medicare levy surcharge for higher earners without private hospital cover is a separate calculation with its own income tiers and is likewise unchanged by the rate cut. Practical upshot: if you earn under about $28,000, the rate cut plus threshold indexing may together leave you paying very little tax at all.

What should you actually do? Withholding and planning

For most employees, the honest answer is nothing. The ATO updates its withholding schedules for 1 July 2026, payroll software applies them automatically, and the roughly $5 a week appears in your first July pay without any action. Three checks are still worth making. First, compare your first 2026-27 payslip against the new scale — if your employer's payroll software hasn't updated, too much tax is being withheld and you'll only recover it at return time. Second, if you hold an existing PAYG withholding variation (common for negatively geared property investors), the rate change slightly alters the correct variation amount — recalculate it rather than rolling last year's forward. Third, use the moment to audit super: payday super makes underpayment visible within days instead of months, so check your fund's transactions after each of the first few pay cycles. Salary-sacrifice arrangements deserve a quick look too, since sacrificed amounts now sit inside qualifying earnings for SG purposes — confirm your employer isn't shrinking the SG base. If you're near $45,000, remember the saving is capped at $268 no matter how much you earn above it, so the cut shouldn't drive salary or bracket decisions. As always with new-start-date measures, these figures reflect legislation as enacted — verify against ATO published rates before lodging.