Your payslip already shows the tax cut. Your 2025–26 return does not.

Your latest payslip can already look lighter. The return you are lodging this spring still uses last year's rate on that band.

Since 1 July 2026, PAYG withholding schedules use the cut that is now law: for Australian residents, the second bracket falls from 16c to 15c for each dollar over $18,200. Take-home on pays paid from that date can be higher. The return open in myTax is the 2025–26 year — earnings from 1 July 2025 to 30 June 2026 — and that year is assessed at 16c on the same band.

The income year of the earnings decides the rates. The date you press lodge does not.

Which year the payslip belongs to

A payment belongs to the income year it was paid in.

Payslip payment date	Income year	Where it goes
1 July 2025 – 30 June 2026	2025–26	This return. Second bracket stays at 16c.
1 July 2026 onwards	2026–27	Next year's return. Withholding uses 15c.

Self-lodgers have until 31 October 2026 for the 2025–26 return. A September lodge still assesses the year ended 30 June 2026. July, August, and September 2026 pays stay on the 2026–27 income statement, with the tax withheld from those pays.

Use the income statement for the year ended 30 June 2026, once it is tax ready, as the gross and the tax withheld for this return.

Resident rates: 16c this return, 15c from July

These rates apply if you were an Australian resident for the full year and entitled to the full tax-free threshold. They do not include the 2% Medicare levy. Figures are from the ATO resident tax rates page (updated 13 August 2026). The 30c, 37c, and 45c bands are unchanged. The dollar amount of tax already counted at the start of those bands drops, because less tax was charged on the second band.

Taxable income	2025–26 (this return)	2026–27 (from 1 July 2026)
$0 – $18,200	Nil	Nil
$18,201 – $45,000	16c for each $1 over $18,200	15c for each $1 over $18,200
$45,001 – $135,000	$4,288 plus 30c for each $1 over $45,000	$4,020 plus 30c for each $1 over $45,000
$135,001 – $190,000	$31,288 plus 37c for each $1 over $135,000	$31,020 plus 37c for each $1 over $135,000
$190,001 and over	$51,638 plus 45c for each $1 over $190,000	$51,370 plus 45c for each $1 over $190,000

At the top of the second band the published bases are $4,288 (2025–26) and $4,020 (2026–27). The gap is $268. The same $268 is already in the higher brackets: $31,288 versus $31,020, and $51,638 versus $51,370. That is one cent on each of the $26,800 between $18,200 and $45,000. Once taxable income reaches $45,000, a further dollar is taxed at the same rate in both years, so the income-tax cut stays $268. Inside the band, it is one cent per dollar over $18,200, and smaller than $268.

That $268 is income tax on the scale only, before the Medicare levy and before offsets. It applies to 2026–27 taxable income. It is not a credit on the 2025–26 assessment.

The same legislation cuts the band again, from 15c to 14c, on 1 July 2027. That is the 2027–28 income year. It is described on the ATO tax cuts page (updated 13 May 2026). It is not the rate on this return.

What that means for a refund estimate

Tax withheld through 2025–26 followed the schedules in force that year, including the 16c second bracket. The assessment uses that same scale. Withholding tables changed from 1 July 2026 — see the ATO tax tables overview (updated 17 June 2026). Extra take-home on a pay dated July, August, or September 2026 belongs to 2026–27. It leaves the 2025–26 tax figure, and the 2025–26 tax-withheld total, as they were.

A refund or a bill on this lodge still comes from the usual gaps: deductions, offsets, other income, and whether withholding through 2025–26 matched the assessment. The 1 July 2026 cut shows up across 2026–27 pays, and in the return you lodge in 2027.

On a full year of 2026–27 income, the rate change itself reduces income tax by $268 once taxable income is $45,000 or more, before Medicare and offsets. Someone still inside the $18,201–$45,000 band saves one cent on each dollar over $18,200.

Which payslip, which rates

flowchart TD
  pay[Payslip date] --> year{Income year?}
  year -->|"By 30 Jun 2026"| old["2025-26 at 16c"]
  year -->|"From 1 Jul 2026"| new["2026-27 at 15c"]
  lodge[This lodge] --> old

Not this return

Two other changes are easy to paste onto the lodge that is open now:

• The $1,000 standard deduction first applies to the 2026–27 return, at Tax Time 2027.
• The Working Australians tax offset is a maximum of $250, and the ATO says it is available from the 2027–28 income year. Details are on the Working Australians tax offset page.

Keep the year on the record

File the income statement, receipts, and logs against the income year they belong to. A rate that changes on 1 July is easy to attach to the wrong return when the pile is just "this spring".

This is general information, not tax advice. The ATO rates page, or your agent, is the check for your own assessment.