The new financial year has officially arrived, bringing one of the biggest rounds of tax changes Australians have seen in recent years. From personal income tax cuts to new deductions and changes for employers, there are several reforms that could affect your finances.
New Income Tax Cuts
From 1 July 2026, the tax rate applying to income between $18,201 and $45,000 has reduced from 16% to 15%, providing every taxpayer with additional tax relief.
For many Australians, this equates to an annual tax saving of up to $268, with a further reduction scheduled from 1 July 2027 that will increase savings to up to $536 per year.
New Instant Tax Deduction
The Government has also legislated a $1,000 Instant Tax Deduction, simplifying tax time for millions of Australians.
Rather than keeping receipts for every small work-related expense, eligible taxpayers can claim an instant deduction of up to $1,000 without substantiating individual expenses below that threshold. Taxpayers can still claim more than $1,000 if they have appropriate records.
Payday Super Begins
Employers also face one of the biggest payroll changes in years.
From 1 July 2026, superannuation must generally be paid at the same time as wages, replacing the previous quarterly payment system. The reform is designed to improve employee retirement savings while reducing unpaid super.
What Should You Do?
The new financial year is an ideal time to:
- Review your payroll systems
- Update tax planning strategies
- Consider how the new tax cuts affect your cash flow
- Speak with your adviser before lodging your next tax return
