Australia Federal Budget 2026-27: Super Tax Changes and Your Take-Home

Treasurer Jim Chalmers delivered the Federal Budget for 2026–27 on Tuesday, 25 March 2026, with the biggest personal-finance headline being the long-awaited commencement of Division 296 — the 30% concessional tax on superannuation earnings attributable to balances above $3 million. A handful of Medicare levy and low-income threshold adjustments round out the main changes for wage-earners. Here is what actually hits your bank account from 1 July 2026.

Division 296: Super's New 30% Tier

For the roughly 80,000 Australians with a Total Super Balance (TSB) above $3 million on 30 June, an additional 15% tax applies to the proportion of earnings above that threshold — stacking on top of the standard 15% concessional rate to arrive at an effective 30%. Key mechanics confirmed in the Budget papers:

• The $3M threshold is not indexed. With wage inflation at 3.5%/year, a 35-year-old on $150K today could be captured by the time they retire.
• "Earnings" includes unrealised gains — a feature that remains politically contested but made it through unchanged.
• Liability is assessed at the individual level by the ATO; funds do not pay — you do, personally.
• First assessments land in the 2027–28 financial year for 2026–27 earnings.

Find your projected TSB at age 65 using the Superannuation Calculator Australia.

Stage 3 Tax Cuts: Still in Place, Review Flagged

The revised Stage 3 cuts legislated in 2024 remain law, but the Budget papers quietly commissioned a Productivity Commission review of the broader personal income tax scales to report by mid-2027. For 2026–27, the resident brackets are unchanged from 2025–26:

• $0 – $18,200: Nil
• $18,201 – $45,000: 16c per $1
• $45,001 – $135,000: 30c per $1
• $135,001 – $190,000: 37c per $1
• $190,001+: 45c per $1

Plus 2% Medicare levy for most residents. Run your actual take-home through the Pay Calculator Australia to see the 2026–27 number.

Medicare Levy Low-Income Thresholds Lifted

The tax-free thresholds for the Medicare levy rise from 1 July 2026 in line with CPI:

• Singles: from $26,000 to $27,222
• Families: from $43,846 to $45,907 (plus $4,216 per dependent child)
• Seniors/Pensioners (single): from $41,089 to $43,020

Super Guarantee at 12% — The Compounding Win

The Super Guarantee (SG) rate is fully phased in at 12% for 2026–27, delivering the final 0.5 percentage point uplift from the 2014 legislated glide-path. On a $100,000 salary, that is $12,000/year into super — an extra $500 versus 2025–26. Over a 35-year working life with 6% real returns, that incremental 0.5% adds roughly $60,000 to the retirement balance.

Concessional and Non-Concessional Caps

• Concessional cap: $30,000 (unchanged)
• Non-concessional cap: $120,000 (or $360,000 under 3-year bring-forward if TSB under $1.9M)
• Transfer balance cap (TBC): rises to $2.0 million from 1 July 2026 — the first indexation since 2023.

What to Do Before 30 June 2026

1. If you are near the $3M TSB line and over preservation age, consider a partial lump-sum withdrawal to stay under — once.
2. Max the concessional cap with a salary-sacrifice top-up; it still beats marginal income tax for anyone earning over $45K.
3. Check unused concessional carry-forward amounts — you can reach back 5 years if your TSB was under $500K on 30 June 2025.
4. Review spouse contributions — the tax offset of up to $540 for contributing to a low-income spouse's fund survived the Budget.

Take-Home Examples for Common Salary Bands

The Stage 3 rates continuing into 2026-27 put real money into middle-income pockets. Approximate annual take-home after tax and Medicare levy (single, no offsets, no HELP):

• $75,000 gross: ~$60,438 net (~$5,037/month)
• $100,000 gross: ~$77,471 net (~$6,456/month)
• $135,000 gross: ~$99,919 net (~$8,327/month)
• $180,000 gross: ~$129,438 net (~$10,787/month)
• $250,000 gross: ~$171,838 net (~$14,320/month)

HELP (student loan) repayments kick in from $67,000 at 1% and climb to 10% above $152,458, which can shave an extra $5K–$15K off the above. Full breakdowns are in the Pay Calculator Australia.

First Home Super Saver Scheme Still Live

Quietly preserved in the Budget: the FHSSS remains capped at $50,000 of voluntary contributions ($15,000/year max) for first home deposits. Combined with the 12% SG, a 30-year-old earning $100K who salary-sacrifices an extra $15K/year for three years builds a ~$42,500 after-tax deposit inside super — taxed at 30% on withdrawal minus marginal offset, still materially cheaper than building the same deposit with after-tax income at 37c per dollar marginal rate.

What Stayed Out of the Budget

Also worth noting, because speculation was loud before the night: there were no changes to:

• Negative gearing or CGT discount on investment property — preserved in their current form.
• Franking credit refundability — untouched.
• Main residence CGT exemption — still unlimited in dollar terms.
• Super preservation age — remains 60 for everyone born after 1 July 1964.

Property investors, retiree self-funded households, and holiday-home owners can exhale. The Treasurer confirmed in the lock-up that these structural settings would be revisited, if at all, only after the Productivity Commission's 2027 review.

The Low Income Tax Offset (LITO)

LITO is preserved at up to $700 for taxable incomes up to $37,500, tapering to nil at $66,667. For part-time workers and students this can effectively push the tax-free ceiling to around $22,575 — worth modelling explicitly if you are combining a casual role with a HELP debt, because the interaction with the 1% HELP threshold at $67,000 creates a surprisingly hard marginal rate around that income.

Verdict: Unless your balance is north of $3M, Budget 2026-27 is net-neutral on your take-home. Focus on maxing SG-12% compounding and, if you are buying your first home, stacking FHSSS on top. Verify your refund line with the Australian Tax Return Calculator and cross-check your pay slip against the Pay Calculator Australia from your first July pay cycle.