What changed on 1 July — your FY 2026–27 money checklist
The new financial year switched on the Budget's headline measures — the 15% tax bracket, the marginal HECS repayment system, and Division 296. Here's what actually changed in your pay, your HECS debt and your super from 1 July, and what's worth doing about it this month.
In this guide
The 2026–27 financial year began on Tuesday 1 July, and with it the Federal Budget's headline measures moved from announcement to law in force. Three of them touch ordinary households directly: a cut to the lowest marginal tax rate, a completely restructured HECS repayment system, and a new tax on very large super balances. None of them require you to do anything — but all of them change numbers you might be planning around.
Your payslip: the 16% bracket is now 15%
The marginal rate on income between $18,201 and $45,000 dropped from 16% to 15% on 1 July. Your employer's payroll software updates PAYG withholding automatically, so the change simply appears in your first July pay run.
Because the cut applies only to that band, the saving is capped: earn anything above $45,000 and you get the full +$268 a year — about +$5.15 a week. Earn between the tax-free threshold and $45,000 and the saving phases in proportionally. Earn under $18,200 and nothing changes, because you weren't paying tax on that income anyway.
▶ Annual tax saving by income · FY 2026–27
For a couple who both earn over $45,000, the household saving is +$536 a year. It stacks on top of the Stage 3 cuts already in place since July 2024 — this is an additional cut, not a replacement.
HECS: repayments are now marginal, not whole-of-income
This is the structural change most people haven't fully registered. Under the old system, crossing the repayment threshold meant paying a percentage of your entire income. Under the new system that started 1 July, you pay only on the income above the threshold — which is now $67,000.
The difference is dramatic at real salaries. The old system charged a $75,000 earner 3.5% of the lot — $2,625 a year. The new system charges approximately 10% of the $8,000 above the threshold — around $800 a year. That's roughly +$1,825 a year back in take-home pay for the same debt.
| Income | Old system (% of total) | New system (income above $67k) |
|---|---|---|
| $60,000 | ~$1,500 | $0 — below threshold |
| $67,000 | ~$1,800 | $0 — at threshold |
| $70,000 | ~$2,100 | ~$300 |
| $75,000 | $2,625 | ~$800 |
| $90,000 | ~$4,000 | ~$2,300 |
Two things worth knowing. First, the cliff-edge problem is gone: under the old rules, earning one extra dollar could push your whole income into a higher repayment band and cost you hundreds. The marginal system removes that — extra income is always worth earning. Second, this comes on top of the 20% balance cut that was applied automatically on 1 June 2025, so your debt is smaller and your repayments are lower.
Slower compulsory repayment does mean the debt hangs around longer and gets indexed more times. If you're close to paying off, it may be worth modelling whether a voluntary repayment beats letting the new schedule run.
Super: Division 296 begins, everything else holds
From 1 July, earnings attributable to super balances above $3 million are taxed at an additional 15% — effectively 30% on that slice. This is Division 296, and it affects roughly 80,000 Australians, about half a percent of fund members. The controversial part is that "earnings" includes unrealised gains: your fund can owe tax on paper growth you haven't sold or banked.
For everyone else, super is steady this year: the Superannuation Guarantee stays at 12%, and the concessional contributions cap remains $30,000. If you salary sacrifice, your cap headroom resets with the new financial year — July is the month to set the amount, not June.
What didn't change on 1 July
- Medicare levy — still 2% of taxable income, same thresholds structure.
- Superannuation Guarantee — holds at 12%; no further legislated rises.
- CGT 50% discount — unchanged for assets held over 12 months.
- Negative gearing — no changes; existing arrangements continue.
- Stamp duty and land tax — state taxes on their own cycles; nothing moved on 1 July federally.
Your July checklist
- Look at your first July payslip. The 15% bracket should already be reflected in withholding. If your take-home didn't move at all and you earn over $18,200, ask payroll.
- Check your HECS position. Your repayment basis changed even if your salary didn't. Run the new number — for most people between $67,000 and $100,000 it dropped meaningfully.
- Reset your salary-sacrifice amount. New year, fresh $30,000 concessional cap. Lock the number in early so the tax benefit compounds across all twelve months.
- Lodge last year's return when your income statement is tax-ready — usually late July. The return you lodge now is for FY 2025–26 under the old rates; don't let the new-year numbers confuse the two.
The theme of this financial year is that the changes are quiet ones — they arrive through payroll systems and ATO debt accounts rather than anything you apply for. The numbers above are the defaults. Whether the defaults are right for you is what the calculators are for.