Accounting & Tax Audit Finance Financial Planning Self Managed Super

Personal tax cuts

From 1 July 2026, personal income tax rates will change.

On the last sitting day of Parliament, the personal income tax rate reduction announced in the 2025-26 Federal Budget was confirmed. The modest reduction of 1% applies to the $18,201-$45,000 tax bracket, reducing from its current rate of 16% to 15% from 1 July 2026, then to 14% from 2027-28. The saving from the tax cut represents a maximum of $268 in the 2026-27 year and $536 from the 2027-28 year.

With a 1 July 2026 start date, the outcome of the Federal election on 3 May 2025 and subsequent budgets will determine whether this change comes to fruition.

Medicare levy threshold change for low-income earners

Low-income earners do not pay the compulsory 2% Medicare levy until their assessable income reaches the threshold. The threshold is different depending on whether you are a single taxpayer, pensioner, and the number of children you have that are dependent on you.

Parliament has confirmed the increase to the Medicare levy threshold announced in the Federal Budget. The threshold change is backdated to 1 July 2024, which means that taxpayers will benefit when they lodge their 2024-25 tax return.

Click to see our Budget 2025-26 summary for details

Latest

News

ATO Reminds Taxpayers about being careful with work related deduction claims

With the 2025 tax season fast approaching the Australian Taxation Office (ATO) is reminding taxpaye ... read more

Economic crossroads: US shrinks, China stimulates, Australia holds steady 

The US economy experienced a notable slowdown in the first quarter of 2025. The latest GDP data sho ... read more

Labor’s victory: unpacking the promises and priorities

As the Labor party settle back into their seats having secured a majority in the House of Represent ... read more