The new financial year begins July 1, bringing a raft of reforms affecting millions of Australians. From tax cuts and deductions to Payday Super and the minimum wage, significant changes are imminent.
Tax cuts for all income brackets
Every Australian will receive a tax cut of up to $268 from July 1, 2026, increasing to $536 from July 1, 2027. The 16 per cent tax rate on income between $18,201 and $45,000 will drop to 15 per cent from Wednesday, then to 14 per cent from July 1, 2027.
$1000 instant tax deduction
The $1000 instant tax deduction, a 2025 election promise, will apply from the 2026-27 tax year. More than six million workers can reduce taxable income without receipts. The average taxpayer is expected to save about $205. However, H&R Block tax communications director Mark Chapman clarified: "Many people hear '$1000 deduction' and assume they'll receive $1000 back in their tax refund, which isn't how it works. A deduction reduces your taxable income, not the amount of tax you get back directly."
Minimum wage increase
The national minimum wage will rise by 6 per cent to $26.44 per hour, equating to $1004.90 for a 38-hour week before tax. This is the first time the weekly minimum has exceeded $1000, effective from the first full pay period on or after July 1, 2026. Modern award-reliant workers will receive a 4.75 per cent increase, benefiting nearly three million workers.
Centrelink benefits rise
Family Tax Benefit A maximum rates will increase to $235.48 per fortnight for each child under 13, and $306.46 for each child aged 13 and over. Family Tax Benefit B will rise to $200.34 per fortnight for families with a youngest child under five, and $139.86 for those with a youngest child aged five or older.
Medicare levy surcharge thresholds
From July, singles can earn up to $105,000 (up from $101,000) and families up to $210,000 (up from $202,000) before incurring the Medicare levy surcharge, which is in addition to the 2 per cent Medicare Levy.
Paid parental leave expansion
Paid parental leave increases by 10 days to 130 days (26 weeks), with payments rising to $1004.90, matching the new minimum wage. Partner leave increases from 15 to 20 days. Families accessing the full entitlement will receive nearly $30,000.
Payday Super and super changes
Employers must pay super at the same time as wages, benefiting retirement incomes. A 25-year-old median earner could be about $6000 better off at retirement. The concessional contributions cap rises to $32,500, and the non-concessional cap to $130,000. The Australian Taxation Office estimated $3.4 billion in unpaid super in 2019-20.
Tax on large super balances
Australians with over $3 million in super will be taxed at 30 per cent instead of 15 per cent, and balances over $10 million will be taxed at 40 per cent. Thresholds will be indexed to CPI.
Fuel excise reduction
The temporary fuel excise cut of 32 cents per litre will be halved to 16 cents from July and expire on August 2.
Anti-scam SMS protections
Businesses sending branded texts must register their sender ID. Unregistered IDs will appear as "unverified". Australians lost nearly $18 million to text scams in 2025.
Supermarket price gouging laws
New legislation prohibits large supermarkets from charging prices significantly excessive compared to supply cost plus a reasonable margin, effective from Wednesday.
Instant asset write-off extended
The $20,000 instant asset write-off is permanently extended for small businesses with turnover below $10 million.
