Tax cut calculator 2026–27
From 1 July 2026 the 16% tax rate fell to 15% and a $1,000 standard deduction arrived. On $90,000 that is $588 a year more ($268 from the rate, $320 from the deduction). In 2027–28 the 14% rate and a $250 offset add another $518.
Resident tax rates by year
| Taxable income | 2026–27 | 2025–26 | 2027–28 | Tax at the top of the band (2026–27) |
|---|---|---|---|---|
| $0 – $18,200 | 0% | 0% | 0% | $0 |
| $18,201 – $45,000 | 15% | 16% | 14% | $4,020 |
| $45,001 – $135,000 | 30% | 30% | 30% | $31,020 |
| $135,001 – $190,000 | 37% | 37% | 37% | $51,370 |
| $190,001 and over | 45% | 45% | 45% | — |
Only the second band changes. It covers $26,800 of income, so each percentage point off the rate is worth up to $268 a year. Everyone with taxable income over $45,000 gets the full amount; below that the saving is 1% of income over $18,200, and people whose tax is already wiped out by LITO save nothing.
How much you save, by salary
| Salary | Tax + Medicare 2025–26 | 2026–27 | Saving | 2027–28 | Further saving |
|---|---|---|---|---|---|
| $25,000 | $388 | $170 | $218 | $0 | $170 |
| $30,000 | $1,387 | $1,019 | $368 | $661 | $358 |
| $40,000 | $3,713 | $3,275 | $438 | $2,817 | $458 |
| $50,000 | $6,538 | $5,935 | $603 | $5,417 | $518 |
| $70,000 | $13,188 | $12,600 | $588 | $12,082 | $518 |
| $90,000 | $19,588 | $19,000 | $588 | $18,482 | $518 |
| $120,000 | $29,188 | $28,600 | $588 | $28,082 | $518 |
| $150,000 | $39,838 | $39,180 | $658 | $38,662 | $518 |
| $200,000 | $60,138 | $59,400 | $738 | $58,882 | $518 |
The standard deduction is worth your marginal rate on $1,000: $320 for someone in the 30% band (including the Medicare levy), and more in the 37% and 45% bands. You get it without claiming anything, unless you claim other work-related expenses, which changes how much of it you get.
Why your pay only went up a little
The PAYG withholding schedules that started on 1 July 2026 reflect the 15% rate and nothing else. On a weekly pay of $1,730 the tax withheld fell from $377 to $372. The standard deduction is not in those schedules, so it reaches you as part of your refund when you lodge your 2026–27 tax return.
2027–28: 14% and the Working Australians tax offset
The law already sets the second rate at 14% from 2027–28. The same year brings a new Working Australians tax offset of up to $250 for residents whose net labour income is over $18,200. It is non-refundable, so it can reduce your tax to zero but not below. On $90,000 the two together are worth $518 on top of 2026–27.
Working holiday makers do not get the cut: their 15% rate on the first $45,000 stays where it is (see the non-resident tax calculator).
FAQ
How much is the 2026 tax cut worth?
Up to $268 a year from the 15% rate, plus the $1,000 standard deduction, which is worth $320 on $90,000. Together that is $588 on $90,000 and $603 on $50,000.
When did the tax cut start?
On 1 July 2026, the start of the 2026–27 income year. Tax withheld from pays made from that date uses the new schedules; the standard deduction comes through your 2026–27 tax return.
Do I need to do anything to get the $1,000 standard deduction?
No. It is applied automatically when your 2026–27 return is assessed, for residents with salary or wage income. It cannot be used for 2025–26 returns.
Will tax fall again?
Yes. The 15% rate becomes 14% from 1 July 2027, and the $250 Working Australians tax offset starts in 2027–28. On $90,000 that adds $518 a year.