What Changed for FY2026-27
The 2026-27 financial year (1 July 2026 – 30 June 2027) brought a personal tax cut and higher superannuation caps. None of the changes are dramatic on their own, but together they put a few hundred dollars back in most people's pockets and let higher earners shelter more in super. Here's exactly what moved, and what it means in real dollars.
The headline changes at a glance
| What | FY2025-26 | FY2026-27 |
|---|---|---|
| Second tax bracket ($18,201–$45,000) | 16% | 15% |
| Concessional (pre-tax) super cap | $30,000 | $32,500 |
| Non-concessional (after-tax) super cap | $120,000 | $130,000 |
| Bring-forward non-concessional (3 yrs) | $360,000 | $390,000 |
| General transfer balance cap | $2.0M | $2.1M |
| HELP/HECS repayment threshold | $67,000 | $69,528 |
| Super Guarantee (employer) | 12% | 12% |
1. The income tax cut: a flat $268 for most workers
The only bracket that changed is the second one: the rate on income between $18,201 and $45,000 dropped from 16% to 15%. That's the second step of the tax cuts legislated in 2025 (the rate falls again to 14% from 1 July 2027).
Because the cut applies to a fixed slice of income, the benefit is capped once you earn $45,000 or more: 1% of the $26,800 band = $268 a year. Everyone above $45k gets the same $268; below that, you get 1% of whatever you earn over $18,200.
| Taxable income | Tax FY2025-26 | Tax FY2026-27 | You keep |
|---|---|---|---|
| $30,000 | $1,888 | $1,770 | +$118 |
| $45,000 | $4,288 | $4,020 | +$268 |
| $80,000 | $14,788 | $14,520 | +$268 |
| $120,000 | $26,788 | $26,520 | +$268 |
| $200,000 | $56,138 | $55,870 | +$268 |
Tax shown excludes the 2% Medicare levy, which is unchanged. Figures are income tax only.
What to do with it: $268/year is $5.15/week. Invested at 8% for 20 years, that single year's cut compounds to about $1,250 — and if you keep directing the saving each year, it adds up meaningfully. Every calculator on this site now uses the FY2026-27 brackets, so your take-home and marginal-rate numbers already reflect the cut.
2. Super caps: room for an extra $2,500 pre-tax
The concessional (before-tax) contributions cap rose from $30,000 to $32,500. This is the total of your employer's 12% super guarantee plus any salary sacrifice or personal deductible contributions. The extra $2,500 of headroom is where the real money is for higher earners.
Worked example: a $180,000 earner uses the new headroom
On $180,000, employer super guarantee is about $21,600, leaving roughly $10,900 of concessional room — now $2,500 more than last year. If they salary-sacrifice that extra $2,500:
- As salary, $2,500 would be taxed at 39% (37% + 2% Medicare) → $975 tax, leaving $1,525.
- Sacrificed to super, it's taxed at 15% → $375 tax, leaving $2,125 in super.
- $600 more working for them, every year, purely from the extra cap room.
The after-tax (non-concessional) cap also rose from $120,000 to $130,000, and the 3-year bring-forward from $360,000 to $390,000 — relevant if you're contributing an inheritance or downsizing proceeds. The general transfer balance cap (the most you can move into a tax-free retirement pension) rose from $2.0M to $2.1M.
Watch the cap: exceeding the $32,500 concessional cap means the excess is added back to your taxable income and taxed at your marginal rate. If you salary sacrifice, add your employer's 12% first, then sacrifice up to the gap.
3. HELP/HECS: the threshold moved up
Compulsory student-loan repayments now start at $69,528 (up from $67,000), and — under the marginal system introduced in 2025 — you only repay a percentage of the income above that threshold, not your whole income. On $90,000 with a HELP debt, that's 15% of ($90,000 − $69,528) ≈ $3,071 for the year, rather than a flat percentage of the full $90,000. The higher threshold and marginal calculation both reduce repayments for most borrowers versus the old system.
Who benefits most
- Everyone earning $18k–$45k: a proportional tax cut, up to $268.
- Middle and high earners: the full $268 tax cut, plus $2,500 more concessional super room to shelter income at 15%.
- People nearing retirement: a higher transfer balance cap ($2.1M) and bring-forward limit ($390,000).
- Graduates with HELP debt: a higher repayment threshold and the marginal repayment system.
See it in your own numbers. Our Work Freedom, Next Dollar and Part-Time calculators all run on the FY2026-27 rates and caps, so you can model the tax cut and the extra super headroom against your actual income.
Educational summary only, not financial or tax advice. Rates and thresholds sourced from the ATO for the 2026-27 income year. Consult a registered tax agent or licensed adviser before acting.