Tax cuts 2026-27: how much more you keep
The 2026-27 tax cuts lower the rate on income from $18,201 to $45,000 from 16% to 15%. If your taxable income is $45,000 or more, you pay $268 less income tax a year than in 2025-26, about $10.31 a fortnight. The figures use Australian resident rates from the ATO's page on new tax cuts for every Australian taxpayer (opens in a new tab).
The link carries the numbers you entered, so anyone who opens it sees the same result.
You keep more than in 2025-26, per year
$268
From $80,000 gross per year
- You keep 79.9%
- Income tax 18.1%
- Medicare levy 2.0%
Take-home pay by pay period, 2026-27 resident rates
1 July 2026 to 30 June 2027. Super is paid on top.
Breakdown
| Income tax 2025-26 | $14,788 |
|---|---|
| Income tax 2026-27 | $14,520 |
| Income tax 2027-28 | $14,252 |
| Take-home pay 2026-27 | $63,880 |
- Per fortnight
- $10.31
- Income tax 2025-26
- $14,788
- Income tax 2026-27
- $14,520
- Income tax 2027-28
- $14,252
- Extra saving in 2027-28
- $268
Key insights
- You get the full $268 because your taxable income is $45,000 or more.
- The legislated 14% rate from 1 July 2027 adds up to $268 more a year on top of this.
- That is about $10.31 a fortnight, already built into the tax withheld from your pay since 1 July 2026.
What changed on 1 July 2026: 16% became 15% on income from $18,201 to $45,000
Only the lowest tax bracket changed. The tax-free threshold and the 30%, 37% and 45% rates stayed where they were. The change is law under the Treasury Laws Amendment (More Cost of Living Relief) Act 2025 (opens in a new tab).
| Taxable income | 2025-26 rate | 2026-27 rate |
|---|---|---|
| $0 to $18,200 | 0% | 0% |
| $18,201 to $45,000 | 16% | 15% |
| $45,001 to $135,000 | 30% | 30% |
| $135,001 to $190,000 | 37% | 37% |
| Over $190,000 | 45% | 45% |
Because the bracket is lower, the tax already owed at each threshold also fell. At $45,000 it's $4,020 in 2026-27, down from $4,288. Employers started withholding at the new rate from 1 July 2026, so the cut shows up in each pay rather than at tax time.
Who gets the full $268 and who gets less
The saving is 1 cent for every dollar of taxable income between $18,201 and $45,000. That band is $26,800 wide, so the most anyone can save in 2026-27 is $268.
| Taxable income | Tax and Medicare 2025-26 | Tax and Medicare 2026-27 | You keep more |
|---|---|---|---|
| $22,000 | $0 | $0 | $0 |
| $30,000 | $1,387 | $1,269 | $118 |
| $45,000 | $4,863 | $4,595 | $268 |
| $60,000 | $9,888 | $9,620 | $268 |
If your taxable income is $22,575 or less, the low income tax offset already cancelled all of your income tax in 2025-26. You pay nothing in either year, so the cut changes nothing.
In 2026-27 the offset covers income tax up to $22,866. Between $22,575 and $45,000, your saving grows by a cent for each extra dollar.
Tax saving at common salaries: 2025-26 vs 2026-27
| Taxable income | Total tax 2025-26 | Total tax 2026-27 | Saving a year | Saving a fortnight |
|---|---|---|---|---|
| $45,000 | $4,863 | $4,595 | $268 | $10.31 |
| $80,000 | $16,388 | $16,120 | $268 | $10.31 |
| $135,000 | $33,988 | $33,720 | $268 | $10.31 |
| $200,000 | $60,138 | $59,870 | $268 | $10.31 |
Everyone in the table keeps the same $268, about $5.15 a week. At $45,000 that lifts take-home pay to $40,405, and $135,000 is the top of the 30% bracket.
Why the saving stops growing above $45,000
Income above $45,000 is taxed at 30%, 37% or 45%, and none of those rates changed. A higher earner still pays the lower 15% rate on their first $26,800 of taxable income above $18,200, which is where the whole $268 comes from. Every dollar above $45,000 is taxed exactly as it was in 2025-26.
As a share of income, the cut is larger for lower earners. $268 is 0.6% of $45,000 and 0.13% of $200,000. Your full tax for 2026-27, including offsets and HELP, is in the tax calculator.
How the 2026 cut builds on the 2024 Stage 3 changes
- 1
1 July 2024: Stage 3
Set the 16% rate on $18,201 to $45,000, along with the other brackets that still apply. The same 16% table was used for 2024-25 and 2025-26.
- 2
1 July 2026: the second step
A smaller cut, on that lowest bracket only.
- 3
1 July 2027: the third step
The 2027 cut is another step on the same bracket.
- Tax bracketsThe full rate tables for each year.
- Salary after tax2026-27 take-home from $20,000 to $300,000.
- Pay calculatorYour per-pay figure.
- Income tax in AustraliaOther changes for 2026-27.
Keep going
What are the tax cuts for 2026-27?
They lower the rate on taxable income from $18,201 to $45,000 from 16% to 15%, starting 1 July 2026. All other rates and the $18,200 tax-free threshold are unchanged. The most an Australian resident saves is $268 a year.
Will I get the tax cut as a refund?
No. The ATO's withholding formulas changed from 1 July 2026, so employers withhold less tax from each pay. The saving arrives in your pay over the year, about $10.31 a fortnight at $45,000 or more. It doesn't appear as a separate refund.
Do I get the tax cut if I earn under $45,000?
Partly. You save 1 cent for each dollar of taxable income between $18,201 and your income. At $30,000 that's $118 a year. If your income is $22,575 or less, the low income tax offset already cancelled your income tax, so the cut makes no difference.
Is the 14% rate from 2027 law?
Yes. The Treasury Laws Amendment (More Cost of Living Relief) Act 2025 sets 15% for 2026-27 and 14% from 1 July 2027 on income from $18,201 to $45,000. The 14% rate adds up to $268 more a year on top of the 2026-27 cut.
Do foreign residents get the tax cuts?
No. Foreign resident rates start at 30% from the first dollar and didn't change on 1 July 2026. The cut applies only to the resident 15% bracket. Working holiday makers pay 15% on their first $45,000 under a separate scale that was already 15%.
Estimates only, based on published rates for 2026-27. General information, not tax or financial advice.
Sources
- ATO: Tax rates: Australian residents (opens in a new tab)
- ATO: Personal income tax: new tax cuts for every Australian taxpayer (opens in a new tab)
- Treasury Laws Amendment (More Cost of Living Relief) Act 2025 (opens in a new tab)
- ATO: Low income tax offset (opens in a new tab)
Provisional: the Medicare levy low-income thresholds ($28,011 and $35,013) are carried over from the previous financial year until the ATO publishes the 2026-27 figures.