Imagine keeping more of your hard-earned money in your pocket each year. Exciting news for Australian taxpayers: from 1 July 2026, you’ll see welcome changes to personal income tax rates.
The latest parliamentary session confirmed the personal income tax rate reductions initially announced in the 2025-26 Federal Budget. This tax relief targets everyday earners, specifically affecting those with incomes between $18,201 and $45,000. The current tax rate of 16% will drop to 15% starting 1 July 2026, with a further reduction to 14% in the 2027-28 financial year. This means potential savings of up to $268 in 2026-27 and up to $536 annually from 2027-28 onwards.
While these changes are officially confirmed, remember that they depend on the outcome of the Federal election scheduled for 3 May 2025 and any future budget decisions. Rest assured, we’ll keep you informed every step of the way.
Increased Medicare Levy Threshold – A Win for Low-Income Earners
If you’re a low-income earner, here’s something that might ease your financial burden. Parliament recently approved a boost to the Medicare levy threshold. This threshold sets the income level at which you start contributing the compulsory 2% Medicare levy. The good news is that it varies according to your personal circumstances, whether you’re single, a pensioner, or have dependent children to support.
Even better, this increase is backdated to 1 July 2024, meaning you’ll notice the difference in your next tax return, giving your budget a welcome boost sooner. This means you’ll notice the benefits when lodging your 2024-25 tax return, potentially putting extra cash back in your hands sooner.
Want personalised guidance to make the most of these tax savings?
Contact the team at C&N Accountants today and ensure you’re set up for financial success.