Australian Tax & Payroll Reforms starting 1 July 2026

The arrival of the new financial year signals a period of significant changes across Australia. From 1 July 2026, a series of new regulations will come into effect, affecting businesses and individuals nationwide.

This blog article provides an overview of the main changes introduced across the 2026–27 financial period every employer and taxpayer should be aware of.

While this article provides a high-level overview of these newly introduced reforms, links to comprehensive resources have been included for each topic to access more detailed information and gain a better understanding of these updates.

📅 July 2026 – Fair Work Annual Pay Increase

Millions of Australian workers will receive an increase in their pay, following the Fair Work Commission’s annual wage review.

Effective from the first full pay period paid on or after 1 July 2026, minimum wages officially increase by:

• 5.97% applicable to the national minimum wage pay rate, setting the minimum wage pay rate to $26.44 per hour (or $1,004.90 per week for a standard 38-hour work week); and
• 4.75% applied to the minimum Award rates.

The Australian Government announced this latest increase is set to help around 2.8 million Australians deal with ongoing cost-of-living pressures. For employers, this mandatory pay increase means conducting a full annual review of their employee’s pay rates to maintain legal compliance and prevent wage theft.

Want to keep up-to-date with all other tax brackets and caps in FY 2027? Check our blog article: Key Rates and Threshold FY 2027.

📅 July 2026 – Changes to Superannuation

One of the most significant changes impacting both employers and employees is the introduction of “payday super.”

Starting 1 July 2026, Australian employers are legally required to pay their employees’ superannuation contributions at the same time they pay their wages, instead of quarterly.

This reform fundamentally shifts how retirement savings are managed:

• For Employees: Retirement balances will grow faster due to the higher payment frequency, while making it much simpler to cross-reference payslips against super fund deposits.
• For Businesses: While this eliminates facing large quarterly payments, switching to frequent payment cycles may have a significant impact on cash flow. This is especially challenging for companies operating on monthly billing cycles; who are now dealing with another 12% in weekly or fortnightly wages costs before receiving their customers payments.

Super on payday impacts around 19 million super accounts nationwide, aiming to significantly reduce delayed or unpaid superannuation.

Alongside the shift to payday super, Australians can also contribute more to superannuation at the concessional tax rate, as the Concessional Super Contribution is set to increase to $32,500 per year, while the after-tax (non-concessional) limit has climbed to $130,000.

These increased caps provide a valuable opportunity for individuals to maximise their super contributions in the new financial year.

📅 July 2026 – Adjustments to Individual Tax Rates

Personal income tax rates are also undergoing a phased reduction.

From 1 July 2026, the marginal tax rate applicable to the lowest income bracket (between $18,201 and $45,000) is reduced by 1%, falling from 16% to 15%.

This initial cut is set to provide savings of up $268 per year for all individual taxpayers. A second 1% reduction is already locked in for FY 2028, bringing the final marginal tax rate down to 14%, with annual maximum savings to $536.

📅 July 2026 – Changes to Paid Parental Leave

Families welcoming or adopting a child from 1 July 2026 can now access an enhanced Pay Parental Leave scheme scaled up to 26 weeks of coverage.

To promote a fairer distribution of early childhood responsibilities, the non-primary caregiver leave allocation has also increased to up to 4 weeks.

The 26-week increase period is the final stage of the Parental Leave policy extension and is set to deliver a much-needed lifestyle flexibility for modern households, making it easier to share early childcare responsibilities while supporting a smooth return to the workforce.

Want to know more about how the Paid Parental Leave scheme works? Check out our blog article: Paid Parental Leave in Australia.

📅 July 2026 – Instant Asset Write-off to become permanent

From 1 July 2026, the $20,000 instant asset write-off becomes permanent under Australian tax law. Small businesses with an aggregated annual turnover of less than $10 million can immediately deduct the full cost of eligible assets priced under $20,000.

📅 July 2026 – Increase of the Electricity Minimum Disconnection Amount

Effective 1 July 2026, the minimum debt threshold required for energy retailers to disconnect a customer for non-payment increases from $300 to $500. This update strengthens consumer protections under the National Energy Customer Framework across the ACT, NSW, Queensland, South Australia, and Tasmania.

For further details, visit the Australian Energy Regulator website.

📅 July 2026 – New SMS Sender ID Registration and Anti-Scam Protections

Starting from 1 July 2026, the Australian Communications and Media Authority (ACMA) has implemented a mandatory SMS Sender ID Register to combat impersonation scams.

Under these new rules, messages sent using unregistered sender IDs will be labelled “Unverified” and separated from verified communications to make it harder for scammers to imitate trusted organisations.

For more details, visit the ACMA website.

📅 July 2026 – Mandatory Country of Origin Labelling for Seafood

From 1 July 2026, hospitality businesses serving seafood for immediate consumption must comply with mandatory country of origin labelling.

Under an information standard added to Australian Consumer Law, venues like restaurants, cafés, pubs, takeaways, and food trucks must use the “AIM” model to explicitly state if their seafood is Australian (A), Imported (I), or Mixed Origin (M).

For more information, refer to the Australian Department of Industry, Science and Resources website.

📅 July 2026 – Expansion of Anti-Money Laundering (AML/CTF) Laws

Australia’s strict anti-money laundering and counter-terrorism financing regulations are expanding to cover “Tranche 2” entities.

This includes real estate agents, lawyers, accountants, and conveyancers who must now implement formal customer identity checks and report suspicious transactions.

For more information, refer to the Australian Transaction Reports and Analysis Centre (AUSTRAC) website.

📅 October 2026 – Ban of Card Fees Surcharges

Effective 1 October 2026, the Reserve Bank of Australia (RBA) has banned businesses from adding a separate surcharge to transactions processed on major card networks. This mandatory “no-surcharge” rule applies across EFTPOS, Mastercard, Visa, and American Express, covering debit, credit, and prepaid transactions made in-store, online, or via mobile digital wallets.

The surcharge ban is introduced to maximise pricing transparency for individuals, ensuring that the checkout payment explicitly match the advertised price of the goods or services purchased.

For more information, refer to our blog article: Is your Business Ready for the October 2026 Surcharge Ban?.

📅 October 2026 – Funding Resets for Select NDIS Supports

Funding allocations within individual National Disability Insurance Scheme (NDIS) plans will be reset for specific categories, including improved daily living skills and community participation supports. These changes take effect gradually as participants’ plans are created, reassessed, or renewed.

For more information, refer to the NDIS Hub.

📅 June 2027 – Division 296: New Super Tax on Balances Over $3 Million

Division 296 introduces new reductions in tax concessions for individuals with high-balance superannuation accounts. Although, this amendment formally commenced on 1 July 2026, its first formal application will take place at the end of 2026–27 Financial Year when preparing individual tax returns.

The Australian Taxation Office (ATO) calculates this personal assessment on a tiered scale according to an individual’s Total Superannuation Balance (TSB):

• Between $3 million and $10 million: attract an additional 15% tax on the proportion of realised earnings matching the excess balance, bringing the tax rate on these earnings to 30%;
• Exceeding $10 million: attract an additional 25% tax on the proportion of realised earnings matching that upper tier, resulting in an effective tax rate of 40%.

Conclusion

The extensive compliance updates across the 2026–27 financial period introduce both new challenges and welcome relief.

For individuals, these changes mean immediate pay rises, lower income tax rates, and upfront honesty at checkout lines through banned card fees and transparent labels.

For businesses, the permanent asset write-off will continue to provide some financial relief. However, these new regulations create increased cashflow pressure when dealing with card surcharge recovery and more frequent superannuation payments.

Disclaimer

This blog and attached resources are of general nature, designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.