Tax Planning
Tax Planning Under the 2026-27 Tas Cuts: How Australians Can Benefit
Australia’s new personal income tax rates from 1 July 2026 present fresh planning opportunities — here’s who benefits and how to get ready.
By NomadicTax Research Team • 5-8 min read • March 21, 2026
## Understanding What’s Changing
Australia has passed the Treasury Laws Amendment (More Cost of Living Relief) Act 2025, which introduces new personal income tax rates from **1 July 2026**. The changes include:
- The tax rate for income $18,201 to $45,000 drops from 16% to **15%**. ([ato.gov.au](https://www.ato.gov.au/law/view/pdf/acts/20250028.pdf?utm_source=openai))
- From **1 July 2027**, that same bracket will be taxed at **14%**. ([ato.gov.au](https://www.ato.gov.au/law/view/pdf/acts/20250028.pdf?utm_source=openai))
These changes are part of a broader effort to ease the financial burden of everyday Australians. ([cpaaustralia.com.au](https://www.cpaaustralia.com.au/-/media/project/cpa/corporate/documents/policy-and-advocacy/budget-commentary/cpa-australia-budget-report-2025-26.pdf?utm_source=openai))
## Who Wins, Who Needs to Act
### Who Benefits Most
- **Low-to-middle income earners**: The rate cuts directly reduce tax for individuals earning in the second bracket.
- **Families especially feeling cost-of-living pressure**, including those with modest incomes.
### Strategic Moves You Can Make Now
- **Revisit withholding and PAYG instalments** now so your scores don’t overshoot when rates change.
- **Delay big income unless needed** — if pushing into the $45,000 bracket before July 2026, see if timing income to after the change will reduce tax.
- **Review deductions and concessions** that may phase out or change value under new brackets (e.g. some offsets, or thresholds tied to taxable income).
## Examples in Context
- **Sally**, a part-time worker earning $40,000: her tax bill might fall by hundreds of dollars once the new rate hits.
- **Mike**, who earns $48,000 but can defer a bonus of $5,000 until August 2026, could potentially save by shifting that income into the lower rate period.
## What to Check with Your Adviser
- Confirm whether pension, superannuation, or other non-ordinary incomes are structured to benefit from the new brackets.
- If you run a business, think whether salary packaging and distributions should align with the new rates for best effect.
**Bottom line**: With bracket creep eased for lower incomes, now’s a smart time to plan income flows, deductions, and withholding to align with the upcoming cuts.