2026–27 tax changes: what actually matters for everyday Australians

If you only read the headlines, you could think the whole tax system is changing overnight. It isn't — but a few changes are worth knowing before you lodge.

2026–27 tax changes: what actually matters for everyday Australians

Every new financial year brings headlines about tax cuts, deductions, super, Medicare, property and small business rules.

The problem is that not every headline affects every taxpayer, and not every change starts at the same time.

If you only read the headlines, you could easily think the whole tax system is changing overnight. It is not. But there are a few 2026–27 changes worth knowing before you lodge your return, salary package, make super contributions, claim work expenses or plan around property.

Here is the plain-English version of what actually matters.

First, which tax year are we talking about?

When people say “the 2027 tax year”, they usually mean the income year that runs from 1 July 2026 to 30 June 2027.

That is the period your income is earned and your deductions are paid in.

It sounds obvious, but it trips people up. If you are checking whether a new tax rule applies to you, the first question is not just “what changed?” The first question is:

When does it start?

Some changes apply from 1 July 2026. Others are planned for 1 July 2027. That timing can make a big difference.

Key 2026–27 tax changes to check before you lodge

The 2026–27 tax changes do not mean every part of the tax system is changing, but they do affect tax rates, Medicare thresholds, super, car claims and planning dates.

The main areas to check are:

• personal tax rates

• Medicare levy surcharge thresholds

• superannuation

• car expense claims

• the $1,000 standard work deduction

• future property tax changes

Let’s go through them in plain English.

The personal tax cut is real, but modest

From 1 July 2026, the resident tax rate on income between $18,201 and $45,000 reduces from 16% to 15%.

For taxpayers earning above $45,000, the maximum saving from this change is about $268 for the year.

That is helpful, but it is not a windfall.

It may slightly improve your take-home pay and slightly reduce the tax value of deductions in that income band. For most people, it is a small adjustment rather than a major tax planning event.

Medicare levy surcharge thresholds have moved

The Medicare levy surcharge thresholds have increased for 2026–27.

For 2026–27, the surcharge generally starts once income for surcharge purposes goes over:

• $105,000 for singles

• $210,000 for families

The family threshold also increases for each dependent child after the first.

This matters if you are close to the threshold and do not have appropriate private hospital cover.

We are not saying everyone should take out private health insurance. That depends on your income, family situation, cover and personal circumstances.

The point is simply this:

If you are near the threshold, check before the end of the year rather than finding out at lodgement.

Super is a big theme this year

There are three super points worth knowing for 2026–27.

First, the super guarantee rate is 12%. That rate is already in place, so there is no further scheduled increase for ordinary employers from 1 July 2026.

Second, Payday Super starts from 1 July 2026. This means employers need to pay super more closely in line with wages, rather than relying on the old quarterly rhythm.

For employees, this should make it easier to see whether super is being paid regularly.

For employers, it means payroll and cash flow processes need to be much tighter. Leaving super until the end of the quarter will no longer be the normal approach.

Third, the contribution caps have increased for 2026–27:

• concessional contributions cap: $32,500

• non-concessional contributions cap: $130,000

If you are planning extra super contributions, salary sacrifice or bring-forward contributions, check the cap before you transfer money. Super mistakes can be expensive and annoying to unwind.

Car claims have changed

If you use the cents-per-kilometre method for work-related car expenses, the 2026–27 rate is 91 cents per kilometre.

The method is still capped at 5,000 business kilometres per car, so the maximum claim using this method is:

5,000 km × 91c = $4,550

This does not mean you can simply claim 5,000 kilometres automatically.

You still need a reasonable basis for the business kilometres claimed. That could include diary notes, calendar entries, job records, travel patterns or other evidence showing how you worked out the kilometres.

If your work-related car use is higher, it may be worth comparing the cents-per-kilometre method with the logbook method.

The $1,000 work deduction needs careful wording

The Tax Reform No. 1 Bill includes a $1,000 standard deduction for work-related expenses from the 2026–27 financial year.

This is designed to simplify smaller work-related claims.

However, the practical point is still important: do not throw away records just because you have seen a headline.

Some taxpayers may still be better off claiming actual work-related expenses if their genuine claim is more than $1,000. Other deductions, such as donations, super contributions or income protection insurance, may also need to be considered separately.

Before lodging, check the final ATO guidance and compare the standard deduction with your actual expenses.

Property investors: watch the 1 July 2027 date

A lot of people have seen headlines about negative gearing and capital gains tax changes.

The key point for everyday taxpayers is timing.

The major property-related reforms are aimed at 1 July 2027, not ordinary 2026–27 returns.

Broadly, the announced reforms limit future negative gearing for residential property to new builds, with grandfathering for existing property owners. CGT discount rules are also changing from 1 July 2027.

This is an area where advice matters.

Do not assume the new 1 July 2027 reforms apply to your 2026–27 tax return. Also do not assume that a property decision made now has no future tax impact.

If you are buying, selling or refinancing investment property, get advice before signing contracts.

Quick checklist before you lodge

Before lodging your 2026–27 tax return, check the following:

• Which income year are you dealing with?

• Did the rule actually start in 2026–27?

• Are you near the Medicare levy surcharge threshold?

• Do you have records for deductions and car claims?

• Would the $1,000 standard deduction or actual expenses be better?

• Have you checked your concessional and non-concessional super caps?

• If you are an employer, is your payroll ready for Payday Super?

• If you are a property investor, are you relying on current rules or future rules?

Want to know what this means for you?

How these changes affect you depends on your income, deductions, health cover, super contributions and plans for the year.

If you are unsure, send Regans your income details, deduction records, private health information and any planned super or property transactions before lodging.

We will check the year-specific rules properly and make sure you are not relying on headlines when you should be relying on the actual tax law.