For individuals and employees — changes in effect now

Income tax cuts (in effect from 1 July 2026)

The tax rate on income between $18,201 and $45,000 has dropped from 16% to 15% as of 1 July. This applies to the current financial year (2026-27) and will drop again to 14% from 1 July 2027. Check your PAYG withholding now — if your employer has not adjusted it, you may be over-withheld.

$1,000 standard work deduction (now available from 1 July 2026)

From this financial year, you can claim a flat $1,000 deduction for work-related expenses without keeping receipts. If you spend more than $1,000, you can claim actual expenses but will need to substantiate them. This applies immediately and simplifies claims for millions of workers.

Working Australians Tax Offset (coming 1 July 2027)

From next financial year, eligible employees and sole traders will receive a $250 offset, effectively raising the tax-free threshold on work income. This is still being finalised but is scheduled to commence in 2027-28.

Medicare levy thresholds increased (already in effect from 1 July 2025)

The low-income thresholds for the Medicare levy were increased last year. Singles now have a threshold of $28,011, with corresponding increases for families and seniors. Check if this affects you — you may be exempt from the levy if your income falls below the new threshold.

For investors — what you need to prepare for

Negative gearing changes (coming 1 July 2027)

If you own or are planning to acquire established residential investment property, pay close attention. From 1 July 2027, losses from established properties acquired after 12 May 2026 will no longer be deductible against other income (like salary or capital gains from shares). Losses can only offset rental income or residential property capital gains, with excess losses carried forward.

Properties you already own are protected — the changes only apply to new acquisitions. If you are considering a property purchase, now is the time to understand how this will affect your tax position. Seek advice before committing.

CGT changes (coming 1 July 2027)

The 50% capital gains tax discount, which has applied for decades, is scheduled to be replaced with CPI indexation from 1 July 2027. A minimum 30% tax rate will also apply to capital gains accruing from that date. The exemption for assets acquired before 20 September 1985 will be removed, though transitional rules protect gains accrued before 1 July 2027.

For existing investments, the rules do not change retrospectively — only gains accrued from 1 July 2027 onwards will be subject to the new rates. However, if you are considering selling any assets before 1 July 2027, the timing may be worth discussing with your accountant.

For business owners — what's live and what's ahead

Instant asset write-off at $20,000 (in effect now)

Small businesses with annual turnover under $10 million can now immediately deduct assets costing less than $20,000. This threshold is now permanent and applies to the current financial year (ending 30 June 2026) and beyond. If you are planning equipment or plant purchases, this is a good time to review timing and whether any assets fall below the $20,000 mark.

Payday Super (in effect from 1 July 2026)

Superannuation payments must now be made in line with each pay run, not quarterly. We have published a detailed article on this — see "Payday Super Is Coming: Get Your Cash Flow Ready" for what you need to do. If you have not already updated your cash flow forecasting and employee records, this is urgent.

FBT on electric vehicles (coming 1 April 2027)

The current FBT exemption for eligible electric vehicles will begin to phase out from April 2027. If you provide company cars as part of salary packages, watch for the detail as it emerges. This may affect the tax efficiency of vehicle arrangements from next year.

Family trust distributions (coming 1 July 2028)

A proposed minimum 30% tax rate on discretionary trust distributions will apply from 1 July 2028. This is the furthest out of the business measures but has significant implications if you operate through a family trust structure. If you use a discretionary trust for business or investment, this is worth a conversation now — restructuring options and timings may be relevant.

What to do in July 2026

Review your tax position for the current year

With the new income tax rates in effect, check your PAYG withholding. If you are self-employed or a contractor, review whether your quarterly tax instalments need adjustment.

Audit your employee super records

Payday Super is live from 1 July. Confirm that all employee super fund details are correct and complete, and that your payroll software is set up for per-pay-run contributions.

Plan ahead for next year

The negative gearing and CGT changes come into effect on 1 July 2027 — exactly one year away. If you are an investor or operate through a trust, do not wait until June 2027. Have a conversation with us now about whether any restructuring or timing strategies make sense for your situation.

Consider your asset purchase timing



The $20,000 write-off is permanent, but if you have large capital purchases planned, consider whether completing them before 30 June 2026 or in the next financial year makes sense from a cash flow and tax perspective.

Important notice: This article provides general information only and does not take your objectives, financial situation or needs into account. Seek professional advice before acting.