The 2026-27 budget reduces the lowest income tax bracket from 16% (current) to 15% in FY2027, then 14% in FY2028. Both changes are already legislated.
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When do the new rates take effect?
The 15% rate applies from 1 July 2026 (FY2026-27). The 14% rate applies from 1 July 2027 (FY2027-28). Both are already legislated.
What was the rate before?
Stage 3 (1 July 2024) set this bracket at 19%. The 2025-26 budget reduced it to 16%. The 2026-27 budget delivers further reductions to 15% then 14%.
What about the $1,000 deduction and $250 WATO?
These were announced in the 2026-27 budget but are not yet law. The $1,000 automatic work expense deduction reduces taxable income; the $250 Working Australians Tax Offset reduces tax owed directly.
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