Key Rates and Thresholds FY 2027

Fair Work Australia and the ATO have released new Key Rates and Thresholds applicable for the Financial Year 2027. Here are some of the most significant ones affecting Australian businesses and individuals.

Individual Tax Rates

From 1 July 2026, the only legislated change to Australian individual resident tax rates is a reduction of the marginal rate on the $18,201–$45,000 bracket from 16% to 15%, all other brackets remain unchanged.

Here’s a table summary of the Individual Tax Rates which started from 1 July 2026.

Payroll Key Rates and Thresholds

Fair Work Minimum Wage and Award Pay Conditions

The National Minimum Wage has increased for FY 2027 by 5.97%. The new Minimum Wage Pay Rates are:

• $26.44 Hourly Rate (Full-Time Employees*)
• $1,004.90 Weekly Salary (Full-Time Employees*)
  *25% Loading still applies to Casual Employment

A percentage increase of 4.75% instead applies to all Modern Awards’ minimum wages.
Some very low classification levels (C13/C14) received a higher increase than 4.75%, due to an extra ‘structural’ uplift.

Allowances

Laundry and Dry Cleaning Allowance

The annual tax-free laundry allowance remains at $150 per annum.

Car, Meals and Travel Allowances

The cents per km threshold for FY 2027 has increased to $0.91 per km.

The Overtime Meal Allowance threshold for FY 2027 has increased to $40.00 per meal.

The FY 2027 Overnight Travel Allowances have been updated.

ATO – Car Km Allowances

ATO – Dry Cleaning and Laundry Allowances

ATO Overnight Travel Allowances TD 2026/4

Superannuation Key Rates and Thresholds

The percentage of Superannuation Contribution Guarantee remains at 12% of Ordinary Time Earnings for FY 2027.

The minimum monthly threshold of $450 per month was removed from 1st July 2022.

The quarterly superannuation maximum contribution cap has decreased for FY 2027 to $62,500 wages per quarter (allowing a maximum amount of Quarterly Superannuation Guarantee Contribution of $7,500).

The annual Concessional Contribution has increased to $32,500 per annum, with the ability to carry forward unpaid contributions for a 5-year period.

The Annual Non-Concessional Contribution cap also remains at $130,000 with the ability to carry forward unpaid contributions for a 3-year period.

ATO – Superannuation Key Rates and Thresholds

Lump Sums and Employment Terminations

Genuine Redundancy and Early Retirement Payment Limits
The limit of the Tax-Free Component for Genuine Redundancy and Early Retirement Scheme has increased for the FY 2027 to the following:

• Base Limit: $13,598
• Each Year of Completed Service: $6,801

Death & Life Benefits ETP & Whole of Income Cap

The ETP cap for both Death & Life Benefits has increased for FY 2027 to $270,000.

The Whole of Income Cap stays at $180,000.

ATO – Tax-Free on Genuine Redundancy

ATO – ETP and Whole of Income Caps

Payroll Tax Rates and Thresholds

The ACT Government has introduced a range of new banded rates.

A detailed breakdown of the new ACT structure for FY 2027 is:

• More than $1.75m but not more than $20m Australia‑wide wages: 6.75%.
• More than $20m but not more than $50m: 6.85%.
• More than $50m but not more than $100m: 7.35%.
• More than $100m but not more than $150m: 7.85%.
• More than $150m: 8.75%.

The applicable Payroll Tax rates and thresholds for the FY 2027 are the following:

Motor Vehicles Key Rates & Thresholds

The Income Tax and GST Threshold for purchasing has increased to $69,883.

The Luxury Car Thresholds also increased for FY 2027 to the following:

• $80,809 (Non-Fuel-efficient vehicles)
• $91,661 (Fuel-efficient vehicles)

ATO – Car Cost Limits

ATO – GST on Motor Vehicles

ATO – Luxury Car Tax Rates and Thresholds

Instant Asset Write-Off

From 1 July 2026 the $20,000 instant asset write‑off is made permanent for small businesses (turnover ≤ $10m).

Here’s a table summary of the Instant Asset write-off thresholds for Small Businesses (under $10 Million per year).

ATO – Instant Asset Write-Off

Is your Accounting Software up to date? Compare the latest updates on the ATO and Fair Work Rates and Thresholds with the FY 2026 Key Pay Rates & Thresholds.

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.