Tax Changes Australia 2026: Key Updates from 1 July You Need to Know

Future Accounting
2 days ago
3 min read

New financial year, new opportunities

The start of a new financial year always brings change, and 1 July 2026 is no exception.

This year introduces a number of important updates affecting individuals, employers, business owners and investors. While some of the changes create new opportunities to save tax or build wealth, others introduce new compliance obligations that businesses need to prepare for.

At Future Accounting Group, our goal is to help you Protect, Preserve and Prosper. Staying informed about tax changes Australia 2026 is the first step, and with the right planning these changes can often work to your advantage.

Here's what you need to know.

Personal income tax cuts continue

From 1 July 2026, the tax rate applying to taxable income between $18,201 and $45,000 reduces from 16% to 15%, delivering tax savings of up to $268 per year for eligible taxpayers.

Taxable income	Tax payable
$0 – $18,200	Nil
$18,201 – $45,000	15% of amount over $18,200
$45,001 – $135,000	$4,020 + 30% over $45,000
$135,001 – $190,000	$31,020 + 37% over $135,000
Over $190,000	$51,370 + 45% over $190,000

Medicare Levy generally remains at 2%, where applicable.

Future Prosperity Tip: Consider directing your tax savings towards reducing debt, making additional super contributions or building your investment portfolio.

Superannuation changes under tax changes Australia 2026

Super Guarantee

The Super Guarantee remains at 12%, having reached its legislated maximum from 1 July 2025.

Higher concessional contribution cap

The annual concessional contributions cap increases to $32,500 (previously $30,000).

Higher non-concessional contribution cap

The annual non-concessional contributions cap increases to $130,000 (previously $120,000). The three-year bring-forward cap increases to $390,000, subject to eligibility.

Transfer Balance Cap

The general Transfer Balance Cap increases to $2.1 million, subject to individual circumstances.

Future Prosperity Tip: Regularly reviewing your super strategy helps maximise available contribution caps while remaining within the rules.

Payday Super is here

From 1 July 2026, employers must pay superannuation at the same time employees are paid instead of quarterly.

Update payroll software.
Review payroll procedures.
Ensure cash flow forecasting includes more frequent super payments.
Confirm payroll staff understand the new reporting requirements.

National Minimum Wage increases

From the first full pay period on or after 1 July 2026 the National Minimum Wage increases by 4.75% to $26.44 per hour or $1,004.90 per week (38-hour week). Modern Award minimum wages also increase by 4.75%.

New $1,000 instant tax deduction

Eligible employees may choose a new $1,000 standard deduction for work-related expenses from 1 July 2026 instead of claiming individual deductions. If your actual deductible expenses exceed $1,000, claiming actual expenses may produce a better outcome. Keep receipts for at least five years.

Permanent $20,000 Instant Asset Write-Off

The $20,000 Instant Asset Write-Off becomes a permanent feature for eligible small businesses. Always seek advice before purchasing assets to confirm eligibility, timing and cash flow implications.

Division 296 tax for high-balance super funds

Individuals with total superannuation balances exceeding $3 million may be affected by the new Division 296 tax. Personalised advice is recommended.

Employer checklist for the new financial year

✔ Update payroll software

✔ Review employee wage rates and Modern Award classifications

✔ Prepare for Payday Super

✔ Update business cash flow forecasts

✔ Review salary sacrifice arrangements

✔ Consider eligible business asset purchases

✔ Ensure payroll and HR processes remain compliant

Protect. Preserve. Prosper.

At Future Accounting Group, we help clients Protect their wealth, Preserve what they have built and Prosper through informed financial decisions.

Ready to prepare for the new financial year?

Book an appointment with Future Accounting Group to discuss how tax changes Australia 2026 affect you or your business and ensure you are making the most of every opportunity available.

Disclaimer  

This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.  

Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder 

Liability limited by a scheme approved under professional standards legislation.