When do the 2026–27 tax cuts take effect?

From 1 July 2026. Changes are legislated as part of the 2025/26 Federal Budget.

How is the tax cut delivered?

Through less PAYG tax withheld from your regular pay — not a lump sum at tax time. You’ll notice more in each paycheck.

Who benefits most from the new tax cuts?

Most savings go to incomes between $45,000 and $135,000, with all taxpayers seeing some benefit above the new threshold.

2026 Tax Cut Estimator

Calculator

Calculates your new estimated tax cut for 2026–27 based on updated income bands, rates, and Budget 2025/26 legislation.

Free to useNo data storedAI insightsUpdated: April 2026

Australia's 2026–27 Budget introduces a further round of staged income tax cuts, affecting nearly all working Australians. These changes lower rates for middle-income earners and adjust income bands in line with cost-of-living pressures. Use this estimator to calculate your approximate tax cut for the 2026-27 financial year and see how new laws compare to previous rates.

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Real-World Examples

Average Worker

Chris earns $90,000. For 2026–27, the calculator shows a $268 tax cut compared to 2025–26.

Chris's employer will reduce tax withheld each pay, boosting take-home pay versus last year.

Higher-Income Earner

Jamie earns $180,000. Calculator estimates $315 additional cut for 2026–27, on top of Stage 3 savings.

Most of the tax cut is delivered by new income band adjustments, benefitting middle and higher earners.

Frequently Asked Questions

Glossary

PAYG Withholding

Tax automatically withheld from each paycheck by your employer, reflecting estimated annual tax liability.

Tax-free Threshold

The amount of income you can earn before paying tax. For 2026-27, this is $22,866.

Marginal Tax Rate

The rate of tax that applies to your next dollar earned, increasing with higher income bands.

Related Tools

Income Tax Calculator

Full tax breakdown by bracket and year.

Tax Refund Estimator

Estimate your refund after tax cut changes.

Negative Gearing Calculator

See how investment losses reduce tax for 2026-27.

How to Use

1Enter your annual taxable income (before tax and deductions).
2See your estimated tax cut for the 2026–27 year compared to prior settings.
3Use the result to compare your after-tax pay and check what’s changed since 2025–26.

Key Information

The average tax cut is $268 for 2026–27, on top of cuts delivered in 2024–25.
Most benefits are for incomes between $45,000 and $135,000.
Tax-free threshold rises by indexation: $22,866 in 2026–27.
Changes follow amendments in the 2025/26 Federal Budget and apply from 1 July 2026.

Pro Tips

Check your withholding: update your employer so you benefit from upfront savings rather than waiting for your tax return.
Use this tool to model scenarios if you expect your income to rise or fall in the 2026–27 year.
Review your total taxable income, including any bonuses, to get the most accurate result.

Avoid These Mistakes

Forgetting that tax cuts AREN’T paid as a lump sum — your employer withholds less tax from each pay instead.
Using previous year's tax bands — be sure to select/compare 2026–27 rates.
Not including all sources of taxable income (wages, rental, investments).

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: April 2026