Latest Tax News & Advice | Income Tax Professionals

Should I File a Tax Return If I Don’t Have an Income? (2026 Guide)

Quick answer:

You generally don’t need to lodge a 2025-26 tax return if you were an Australian resident all year, your taxable income was $18,200 or less, and no tax was withheld from anything you were paid.
You must lodge if, among other things, tax was withheld from any payment, you ran a business (even at a loss), you have a loss to claim, or you have reportable fringe benefits or employer super contributions on your income statement.
If you don’t need to lodge, tell the ATO by lodging a non-lodgment advice through myGov.
Lodging can still be worth it if tax was withheld from your pay or bank interest, because you may get it back as a refund.
Self-lodged 2025-26 returns were due 31 October 2026. Because that’s a Saturday, the ATO accepts returns lodged on Monday 2 November 2026.

What you’ll learn:

When you have to lodge a tax return even with little or no income
What counts as income for tax purposes
How the tax-free threshold works for 2025-26 and 2026-27
When to lodge a non-lodgment advice instead
When lodging a return works in your favour

When “no income” doesn’t mean “no tax return”

Many people assume that if they didn’t earn much, they don’t need to deal with the ATO. That’s often true, but not always.

Under the ATO’s guide, Do you need to lodge a tax return? 2026, you must lodge a 2025-26 return if any of these applied to you (this is a summary, not the full list):

Tax was withheld from any payment you received, such as wages, or bank interest where you didn’t give your TFN
your taxable income was over $18,200 and you were an Australian resident for the full year
you were under 18 on 30 June 2026 and earned more than $416 from income other than salary or wages, such as interest or dividends
you carried on a business, even if it made a loss or earned very little
you made a loss in 2025-26, including a capital loss, or have a loss from an earlier year you can claim
your income statement shows reportable fringe benefits or reportable employer super contributions
you received a super lump sum in certain circumstances, such as being under 60
you’re a working holiday maker with Australian income of $45,001 or more
you’re a foreign resident with Australian income that didn’t have final withholding tax taken out
you’re a liable parent or entitled to child support, unless both of these apply: you received government payments for the whole year, and your total income for child support purposes was under $31,047

If you receive government payments, different thresholds apply. For example, if you received certain allowances such as JobSeeker, you must lodge if your taxable income was over $22,575. Seniors and pensioners have their own thresholds.

Not sure? The ATO’s Do I need to lodge a tax return? tool takes 5 to 10 minutes and covers income years up to 2025-26. If you sign in through myGov, it uses information the ATO already holds about you.

What counts as income?

For tax purposes, income is broader than just a pay packet. It includes:

salary, wages, tips and bonuses
bank interest
dividends and distributions from shares, managed funds or trusts
rent, including from short-term stays such as Airbnb
freelance, gig and platform income, such as rideshare, delivery or design work
capital gains, including from crypto
foreign income, if you’re an Australian resident
some government payments

Selling your own second-hand items occasionally isn’t usually income. But if you buy and sell regularly to make a profit, or you have a side business, that income needs to be declared. Our guide to how a side hustle affects your tax explains where the line sits.

The tax-free threshold for 2025-26 and 2026-27

Australian residents for the full year don’t pay tax on the first $18,200 of taxable income. The ATO’s resident tax rates for the two current years are:

2025-26 (the return you’re lodging now):

Taxable income	Tax on this income
$0 to $18,200	Nil
$18,201 to $45,000	16c for each $1 over $18,200
$45,001 to $135,000	$4,288 plus 30c for each $1 over $45,000
$135,001 to $190,000	$31,288 plus 37c for each $1 over $135,000
$190,001 and over	$51,638 plus 45c for each $1 over $190,000

2026-27 (from 1 July 2026):

Taxable income	Tax on this income
$0 to $18,200	Nil
$18,201 to $45,000	15c for each $1 over $18,200
$45,001 to $135,000	$4,020 plus 30c for each $1 over $45,000
$135,001 to $190,000	$31,020 plus 37c for each $1 over $135,000
$190,001 and over	$51,370 plus 45c for each $1 over $190,000

The rates don’t include the 2% Medicare levy, which low-income earners may pay at a reduced rate or not at all.

The tax-free threshold applies to Australian residents. Foreign residents and working holiday makers are taxed from the first dollar, at different rates. If you became or stopped being a resident during the year, you get a part-year threshold.

What if you earned less than $18,200?

If none of the situations above apply, and no tax was withheld from anything you were paid, you usually don’t need to lodge a return. But you shouldn’t just stay silent.

Instead, lodge a non-lodgment advice. This tells the ATO you don’t need to lodge for the year, so it doesn’t follow you up for an overdue return. You can do it in myGov by going to the ATO, then Tax, Lodgments and Non-lodgment advice. You can also tell the ATO you won’t need to lodge in future years.

A few things to know:

You can’t lodge a non-lodgment advice if the ATO’s records show an active ABN, or PAYG withholding or instalments for the year. In those cases, you’ll need to lodge a return.
If you get Family Tax Benefit, Child Care Subsidy or child support, you also need to tell Services Australia your income for the year, even if you don’t lodge a tax return. Otherwise you may not get your full entitlement.
If you have franking credits but don’t need to lodge, you can apply for a refund of franking credits instead of lodging a return.

When lodging works in your favour

Even if you’re not required to lodge, a tax return can put money back in your pocket.

Getting withheld tax back. If you worked a casual job for part of the year, tax was probably withheld from your pay. If your total income was under $18,200, lodging a return usually gets that tax refunded. (Strictly, having tax withheld means you must lodge anyway.)
Claiming tax withheld from bank interest. If you didn’t give your bank your TFN, tax may have been withheld from your interest at the top rate.
Recording a loss. If you started a business or made an investment loss, lodging a return records that loss so you can use it against future income.
Keeping your records straight. An up-to-date tax record makes it easier to apply for government payments, loans or a visa.

Want an idea of your refund? Try ITP’s income tax calculator.

Common mistakes to avoid

Forgetting small amounts of income. Platform, freelance and gig income is often reported to the ATO, so leaving it out can trigger an adjustment.
Ignoring the non-lodgment advice. Doing nothing can lead to reminder letters and, eventually, the ATO treating you as an overdue lodger.
Assuming a loss means you don’t need to lodge. If you carried on a business or have a loss to claim, you must lodge.
Claiming deductions without records. If you do lodge, you need records for what you claim, such as a log of hours for working from home expenses. Keep records for 5 years.
Forgetting foreign income. Australian residents are taxed on worldwide income.

Key dates for 2026

1 July 2026: 2025-26 tax returns opened.
31 October 2026: Self-lodged 2025-26 returns were due. Because 31 October fell on a Saturday, a return lodged on Monday 2 November 2026 is on time.
31 October 2026: Last day to get on a registered tax agent’s client list. Most agent clients then have until 15 May 2027 to lodge, unless they have earlier returns outstanding.

Missed a deadline, or not sure if you were meant to lodge in earlier years? Our guides to 2026 tax deadlines and lodging a late tax return can help. If the ATO decides you did need to lodge, the late lodgment penalty is generally not applied where a late return results in a refund or nil result.

Still not sure? Here’s what to do

Gather what you received during the year: income statements, bank interest, dividend statements and any payment summaries from Services Australia.
Use the ATO’s Do I need to lodge? tool, ideally through myGov.
Either lodge a tax return, or lodge a non-lodgment advice.
Keep a copy of what you lodged and any receipt number.

An ITP tax accountant can check your situation and lodge the right thing for you, whether that’s a full return or a non-lodgment advice. Find your nearest ITP office or start your tax return online. If this is your first time dealing with the ATO, our guide to lodging your first tax return walks you through it.

FAQs: do I need to lodge a tax return?

Do I need to lodge a tax return if I earned less than $18,200?

Usually not, if you were an Australian resident for the full year and no tax was withheld from any of your income. But you must lodge if any other reason applies, such as running a business or having a loss to claim. If you don’t need to lodge, send the ATO a non-lodgment advice.

What is non-lodgment advice?

It’s a notice telling the ATO you don’t need to lodge a tax return for a particular year. You can lodge it through myGov, under the ATO’s Lodgments section, or on a paper form.

Should I lodge a tax return if tax was taken out of my pay?

Yes. If tax was withheld from any payment, you must lodge. If your total income was under the tax-free threshold, you’ll usually get a refund of that tax.

Do I need to lodge if I’m under 18?

If your only income was salary or wages under $18,200 and no tax was withheld, usually not. But if you were under 18 on 30 June 2026 and earned more than $416 from other income, such as interest, dividends or trust distributions, you must lodge.

Do I need to lodge if my business makes a loss?

Yes. If you carried on a business during the year, you must lodge a return, even if it made a loss or earned very little.

What if I only receive Centrelink payments?

It depends on the payment and your total income. For example, if you received certain allowances such as JobSeeker, you must lodge if your taxable income was over $22,575 for 2025-26. If you receive family payments or child support, you also need to give Services Australia your income details.

What is the tax-free threshold for 2026-27?

It stays at $18,200 for Australian residents. From 1 July 2026, the rate of income between $18,201 and $45,000 drops from 16% to 15%.

Disclaimer: This article provides general information about whether you need to lodge a tax return and isn’t personal tax advice. Lodgment requirements depend on your circumstances. Always check the ATO’s current guidance or speak with a registered tax agent about your situation. ITP Accounting Professionals disclaims any liability for decisions made based solely on the general information in this article.

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Work Travel Expenses 2026-27: What You Can Claim on Your Tax Return

If you pay for travel as part of doing your job, you may be able to claim a tax deduction. This can include transport, overnight accommodation and meals.

But not every trip connected with work qualifies. Your normal commute, holiday expenses and costs your employer pays or reimburses are generally not claimable.

This guide covers employees’ claims for 1 July 2026 to 30 June 2027. A deduction reduces the income you pay tax on, it does not mean you get the full expense back.

What’s new this year?

From 2026–27, eligible Australian tax residents with employment income can receive a standard work-expense deduction of up to $1,000. You do not need to spend money or keep receipts to receive it, and the ATO applies it automatically through your tax return. Your maximum deduction cannot exceed your eligible employment income.

However, you cannot claim the full standard deduction plus your travel expenses. Travel, car and most other work-expense claims reduce the standard deduction dollar for dollar, down to zero.

In practice:

If your covered work expenses are below your standard deduction: it is usually simpler not to claim those expenses individually.

If they are higher: claiming your actual deductible expenses may give you a larger deduction. You need the required records for the whole claim, not just the amount above the standard deduction.

Some deductions, including eligible union fees, professional association fees, donations and tax agent fees, can still be claimed separately without reducing your standard deduction.

Keep records during the year, even if you expect to use the standard deduction. Your expenses may end up being higher than expected.

Which work trips can you claim?

The main question is whether you are travelling as part of doing your job, rather than simply getting yourself to work.

Trips that may qualify include:

travelling from your office to visit a client;

travelling interstate for work meetings;

attending a conference directly related to your current job; and

travelling directly between workplaces.

When claiming individual expenses, you generally need to have paid the cost yourself, without reimbursement. Only the work-related part is deductible.

What about getting to and from work?

Your normal journey between home and your regular workplace is generally private. Starting early, finishing late or answering work calls on the way does not usually change that.

Working from home does not automatically make trips to your employer’s office deductible. Even occasional office visits can still be ordinary commuting. Limited exceptions apply where the journey itself forms part of performing your duties.

What travel costs can you claim?

Expense	When it may qualify
Flights, trains, buses, taxis and rideshare	When the journey is part of doing your job, rather than ordinary commuting or private travel.
Your own car	For eligible work journeys, using the cents-per-kilometre or logbook method.
Accommodation	When your duties require you to travel and stay away from home overnight.
Meals	Generally during necessary overnight work travel—not an ordinary day trip.
Parking, tolls and car hire	When they relate to a deductible work journey.
Phone and internet	The work-related share of costs you incur while travelling.
Conferences and training	Where the expense has the required connection with your current work.

An overnight stay does not automatically make accommodation and meals deductible. Costs are generally private if you choose to stay near your regular workplace because you live far away, or if you have relocated or are living at a work location.

You also cannot claim a meal separately if it is already included in another expense you claim, such as a conference registration fee.

Using your own car

For an eligible car you own or lease, there are two main ways to calculate your deduction. ⁵

Option 1: Cents per kilometre

For 2026–27, the rate is 91 cents for each eligible work kilometre, up to 5,000 kilometres per car.

The maximum deduction under this method is $4,550 per car.

Step	Calculation	Amount
Maximum claim	5,000 km x $0.91	$4,550

You do not need fuel or servicing receipts under this method, but you must keep a record showing how you calculated your work kilometres. A diary of work trips can help. You cannot simply claim 5,000 kilometres without a reasonable basis.

The rate already covers fuel, registration, insurance, maintenance and depreciation. Do not claim those costs again.

Option 2: Logbook

The logbook method lets you claim the work-related percentage of your actual car costs.

You generally need:

a representative logbook covering at least 12 continuous weeks;

odometer readings; and

the required records of your car expenses.

It is worth comparing the two methods, especially if you drive more than 5,000 work kilometres. The better result depends on your costs and work use—not just how far you drive. Our guide to what car expenses are tax deductible goes into more detail.

Travel allowances: what do the ATO amounts mean?

A travel allowance is money your employer pays to help cover costs on a work trip. It is different from reimbursement, where your employer pays you back for a particular expense.

Each year, the ATO publishes “reasonable amounts” for certain travel costs.

These amounts are not automatic deductions. They are limits used to decide whether some receipt-keeping requirements can be relaxed. You must still have spent the money on deductible expenses.

Capital-city amounts for 2026–27

For employees with an annual salary of $153,210 or less, the following amounts apply in capital cities:

Expense	Reasonable amount
Breakfast	$36
Lunch	$40.45
Dinner	$69
Small additional travel expenses, called “incidentals”	$25.40 per day

The accommodation amounts vary by city:

City	Accommodation per night
Adelaide	$158
Brisbane	$188
Canberra	$178
Darwin	$220
Hobart	$176
Melbourne	$175
Perth	$180
Sydney	$230

These figures are receipt-exception limits, not amounts everyone can claim.

Different amounts apply to higher salary bands, regional destinations and overseas travel. Salary excludes allowances. Part-time employees use their full-time-equivalent annual salary to select the correct salary band. Separate rules also apply to employee truck drivers and certain public office holders.

Only meals falling within the travel period covered by your allowance count. The incidental limit does not need to be reduced for part-days at the beginning or end of a trip, but you can claim only deductible expenses you actually incur.

Can you claim without receipts?

Sometimes. For qualifying travel allowance expenses, you may not need individual receipts if:

your employer pays a genuine allowance for those particular expenses;

you actually incur deductible expenses;

you are not reimbursed;

you declare the allowance when claiming the related expenses; and

your claim stays within the relevant reasonable amounts.

The exception only covers the expenses included in the allowance. For example, a meals-only allowance does not remove the need for accommodation receipts.

Even without receipts, you must be able to explain the trip, what you spent and how you calculated your claim. Keep useful supporting information, such as your itinerary, allowance details, diary notes and bank records.

When do you still need receipts?

Normal evidence requirements generally apply where:

you do not receive a qualifying travel allowance;

you claim more than the relevant reasonable amounts; or

you claim overseas accommodation.

If you claim above the reasonable amounts, you need evidence for the whole relevant expense claim, not just the excess.

The accommodation limits apply to short stays in places such as hotels, motels and serviced apartments. They do not apply to hostels or caravan parks. Those accommodation costs may still be deductible, but keep the required evidence.

Also, do not rely on the former general rule allowing work-expense claims of up to $300 without receipts. That exception was removed from 1 July 2026. Specific exceptions, including qualifying travel allowance and cents-per-kilometre claims, have their own rules.

Do you need to declare your allowance?

Generally, include your travel allowance as income and claim your deductible spending separately. An allowance is not automatically tax-free because it is missing from your income statement.

A limited exception lets you leave out both the allowance and the matching expense deduction where:

the allowance is not shown on your income statement or payment summary;

it is no more than the relevant reasonable amount; and

you spend it fully on deductible travel expenses.

If you leave the allowance out under this exception, do not also claim the expenses.

What if you add a holiday?

Separate the work and private parts of the trip.

You cannot claim holiday accommodation, private meals or the extra cost of bringing your family. Necessary nights connected with the work trip may qualify, including an appropriate arrival night before work begins.

Airfares need a separate assessment. Adding a short holiday does not always mean dividing the airfare by the number of work and holiday days:

a minor private addition may leave the airfare fully deductible;

substantial work and holiday purposes may require a reasonable split; and

a mainly private trip may leave the airfare non-deductible.

The allocation must reflect why the expense was incurred. Only the deductible work-related portion can be claimed.

What records should you keep?

If you claim individual travel expenses, keep:

receipts and invoices, unless an exception applies;

your itinerary and evidence of the trip’s work purpose;

details of allowances and reimbursements;

your work-kilometre calculations or car logbook; and

an explanation of any split between work and private costs.

Digital copies and clear photos of receipts are useful.

Travel diaries

You generally need a travel diary or equivalent record if you are away from home for six or more consecutive nights. Record where you went, what you did, when activities started and how long they lasted.

For qualifying domestic travel allowance expenses within the reasonable amounts, the diary requirement can be waived. For overseas trips of six or more consecutive nights, it generally remains. A specific exception applies to qualifying international flight crew.

Keep tax records generally for five years after lodging your return. Some circumstances require longer retention. The legal substantiation rules sit in Division 900 of the Income Tax Assessment Act 1997.

Before you lodge

Check that you have:

excluded ordinary commuting and private travel;

removed costs your employer paid or reimbursed;

claimed only expenses you actually incurred;

treated your allowance correctly;

kept the records required for your chosen claim method; and

compared your covered work expenses with your available standard deduction.

Lodging a 2025–26 return instead? Use that year’s rules and rates, including 88 cents per kilometre. The new standard deduction does not apply to 2025–26.

Start by adding up your deductible travel and other covered work expenses, then compare that total with your available standard deduction.

Bring your records to your ITP appointment using our tax checklist.

If your travel is complex, such as frequent travel, international trips or mixed work and holiday trips, an ITP tax accountant can make sure you claim what you are entitled to and nothing that could be questioned later. Find your nearest ITP office or start your tax return online.

Running short of time for this year’s return? Check our tax deadlines guide. For more ways to lower your tax, see how to reduce your taxable income.

FAQs: work travel expenses

Can I claim the $1,000 standard deduction and my travel expenses?

You cannot claim the full standard deduction plus your travel expenses. Travel, car and most other work-expense claims reduce the standard deduction dollar for dollar, down to zero. If your covered work expenses are below your standard deduction, it is usually simpler not to claim those expenses individually.

Can I claim travel between home and work?

Your normal journey between home and your regular workplace is generally private. Starting early, finishing late or answering work calls on the way does not usually change that. Travelling directly between workplaces may qualify.

Are the ATO reasonable amounts automatic deductions?

No. They are limits used to decide whether some receipt-keeping requirements can be relaxed. You must still have spent the money on deductible expenses.

What are the ATO reasonable amounts for 2026–27?

For employees with an annual salary of $153,210 or less, the capital-city amounts are breakfast $36, lunch $40.45, dinner $69 and incidentals $25.40 per day. Accommodation varies by city, from $158 per night in Adelaide to $230 per night in Sydney. Different amounts apply to higher salary bands, regional destinations and overseas travel.

Can I claim travel expenses without receipts?

Sometimes. For qualifying travel allowance expenses, you may not need individual receipts if your employer pays a genuine allowance for those particular expenses, you actually incur deductible expenses, you are not reimbursed, you declare the allowance when claiming the related expenses and your claim stays within the relevant reasonable amounts. Normal evidence requirements generally apply if you do not receive a qualifying travel allowance, you claim more than the relevant reasonable amounts or you claim overseas accommodation.

What is the cents per kilometre rate for 2026–27?

The rate is 91 cents for each eligible work kilometre, up to 5,000 kilometres per car. The maximum deduction under this method is $4,550 per car. For 2025–26 returns, the rate is 88 cents per kilometre.

Do I need a travel diary?

You generally need a travel diary or equivalent record if you are away from home for six or more consecutive nights. For qualifying domestic travel allowance expenses within the reasonable amounts, the diary requirement can be waived. For overseas trips of six or more consecutive nights, it generally remains.

Can I claim a work trip I extended for a holiday?

Separate the work and private parts of the trip. You cannot claim holiday accommodation, private meals or the extra cost of bringing your family. Adding a short holiday does not always mean dividing the airfare by the number of work and holiday days: a minor private addition may leave the airfare fully deductible, substantial work and holiday purposes may require a reasonable split, and a mainly private trip may leave the airfare non-deductible.

How long do I need to keep travel records?

Keep tax records generally for five years after lodging your return. Some circumstances require longer retention.

Disclaimer: This article provides general information about claiming work travel expenses and isn’t personal tax advice. Rates and rules change each year, and what you can claim depends on your circumstances. Always check the latest ATO guidance or speak with a registered tax agent about your situation. ITP Accounting Professionals disclaims any liability for decisions made based solely on the general information in this article.

Smiling man and woman sitting at a desk with paperwork

Company Tax Rate Australia 2026-27: 25% vs 30% Explained

Quick answer

25% is the company tax rate for base rate entities: companies with aggregated turnover under $50 million and no more than 80% of assessable income from passive sources.
30% is the rate for every other company.
The rates are the same as last year. They have applied since 2021-22 and continue for 2026-27.
Base rate entity status is tested each year, using that year’s turnover and income, so a company can move between rates.
The rate you frank dividends at uses the previous year’s figures, so it can differ from the rate you pay tax at in the same year.
Most small companies using a tax agent lodge their 2025-26 return by 15 May 2027.

What you’ll learn:

Who qualifies for the 25% rate and who pays 30%
How the $50 million turnover test and 80% passive income test work
How franking credits work under the two rates
Company tax return and PAYG instalment due dates for 2026-27
What’s changed for companies in 2026-27, including the permanent $20,000 instant asset write-off

Australia has two company tax rates, and which one applies to your company can change from year to year. Getting it wrong affects both the tax your company pays and the franking credits your shareholders receive.

This guide covers the rates for the 2026-27 income year (1 July 2026 to 30 June 2027), along with the due dates for 2025-26 company returns being lodged now.

Company tax rates for 2026-27

The ATO’s company tax rates have been stable since 2021-22:

Company type	Aggregated turnover	Tax rate
Base rate entity	Under $50 million, and passive income no more than 80% of assessable income	25%
All other companies	$50 million or more, or passive income above 80%	30%

The ATO applies the same settings to 2025-26 and 2026-27. For earlier years, the base rate entity rate was 27.5% (to 2019-20) and 26% (2020-21).

Who qualifies as a base rate entity?

A company is a base rate entity for an income year if it passes both tests for that same year.

Test 1: aggregated turnover under $50 million

Aggregated turnover is your company’s annual turnover plus the turnover of any entities connected with it or affiliated with it. That includes related companies, trusts and, in some cases, overseas entities. Many companies that look small on their own fail this test once related entities are counted.

Test 2: no more than 80% passive income

No more than 80% of the company’s assessable income can be base rate entity passive income (BREPI). Under the ATO’s definition, BREPI includes:

dividends and other corporate distributions, plus the franking credits attached to them (excluding non-portfolio dividends, where the company holds at least 10% of the voting power)
interest, with some exceptions
rent and royalties
net capital gains
gains on qualifying securities
trust or partnership distributions, to the extent they come from the types of income above

Example

A company runs a chain of cafés with $8 million in sales and also owns property earning $3 million in rent. Its passive income is $3 million of $11 million total assessable income, or about 27%. With turnover under $50 million and passive income well under 80%, it pays 25%.

A company that mainly holds investment properties or shares is a different story. If 80% or more of its income is rent, interest or dividends, it pays 30% even if its turnover is small. This catches many investment and “bucket” companies.

Franking credits under the two rates

When a company pays a franked dividend, shareholders receive franking credits for the company tax already paid. The maximum franking rate depends on the company’s corporate tax rate for imputation purposes.

That rate isn’t simply the rate the company pays tax at this year. Under the ATO’s rules, you work it out by assuming the company’s aggregated turnover, assessable income and passive income will be the same as in the previous income year. The company uses 25% if:

last year’s aggregated turnover was under $50 million and no more than 80% of last year’s assessable income was passive, or
the company didn’t exist last year.

Otherwise, it franks at 30%.

This can create a mismatch. A company that pays tax at 30% this year but qualified as a base rate entity last year can only frank at 25%. The reverse also happens: a company that pays 25% this year but didn’t qualify last year franks at 30%, which can leave its franking account in deficit.

Shareholders generally need to hold shares “at risk” for at least 45 days around the dividend to claim franking credits. Individuals with total franking credits of $5,000 or less in a year are exempt from this rule.

Company tax return due dates

Companies that use a registered tax agent lodge under the ATO’s registered agent lodgment program. For 2025-26 returns of companies that balance on 30 June, the main dates are:

Company situation	Lodgment due date
One or more prior-year returns still outstanding at 30 June 2026	31 October 2026
Large and medium companies whose 2025 return was taxable	31 January 2027
Large and medium companies whose 2025 return was non-taxable, and new large and medium registrants	28 February 2027
Companies with total income over $2 million in an earlier year, unless due earlier	31 March 2027
All remaining companies on an agent’s client list, including most small companies	15 May 2027

There’s also a 5 June 2027 concession for companies due 15 May whose current and previous returns are both non-taxable or result in a refund.

If your company lodges without an agent, the dates are generally earlier, so check your company’s due date with the ATO.

Payment: if you lodge on time, payment for most companies is due on the later of 21 days after the lodgment due date or 21 days after the notice of assessment is deemed received. If you lodge late, payment is due 21 days after the lodgment due date, so lodging late doesn’t buy more time to pay. Large and medium companies that were taxable in the prior year pay by 1 December 2026.

Late lodgment attracts a failure to lodge penalty of $364 per 28 days for small companies (up to $1,820) from 1 July 2026, and more for medium and large companies. Our tax deadlines guide has the full penalty table.

PAYG instalments

Most profitable companies pay tax during the year through PAYG instalments.

According to the ATO, a company automatically enters PAYG instalments if its latest return shows instalment income of $2 million or more, its estimated (notional) tax is $500 or more, or it’s the head company of a consolidated group.

Quarterly instalments are due on these dates:

Quarter	Due date
July to September	28 October
October to December	28 February
January to March	28 April
April to June	28 July

If you lodge online, you may get an extra two weeks. Businesses with instalment income over $20 million pay monthly, by the 21st of the following month.

You can vary your instalments if you expect lower income, but if your varied instalments come to less than 85% of the tax you end up owing, the ATO can charge general interest on the shortfall.

What’s changed for companies in 2026-27

$20,000 instant asset write-off is now permanent. Small businesses with aggregated turnover under $10 million can immediately deduct eligible assets costing less than $20,000, per asset. The ATO confirms the $20,000 threshold is now permanent from 1 July 2026, after earlier year-by-year extensions. Assets of $20,000 or more go into the small business pool.

Payday Super has started. From 1 July 2026, employers must pay super at the same time as wages, rather than quarterly. The ATO’s announcement that Payday Super is now law covers what employers need to do. This is a cash flow change for any company with staff.

Higher penalties. The Commonwealth penalty unit rose from $330 to $364 on 1 July 2026, which flows through to failure to lodge penalties and other administrative penalties.

Global minimum tax. Large multinational groups with annual revenue of at least €750 million face a 15% global and domestic minimum tax. This doesn’t affect most private companies.

For a wider look, see our guide to small business tax changes for 2026-27.

Common mistakes

Ignoring connected entities in the turnover test. Turnover from related companies and trusts counts toward the $50 million threshold.
Overlooking the passive income test. If trading income drops in a year, passive income can push past 80% and the company moves to 30%.
Franking at the wrong rate. Remember the franking rate uses last year’s figures.
Underestimating instalments. Varying instalments too low can lead to interest charges.
Poor records. The ATO matches data from banks, share registries and other sources, so income needs to be recorded accurately.

Getting the structure right

The two-rate system is one reason company structures need regular review. Whether a company suits your business depends on more than the tax rate: how you plan to take money out of your company, how profits will be distributed, and what other entities are in the group all matter.

ITP’s business tax accountants can confirm which rate applies to your company, set up your franking correctly and keep your lodgments on track. You can also read about company tax returns and choosing a business structure, or find your nearest ITP office.

FAQs: company tax rates

What is the company tax rate in Australia for 2026-27?

25% for base rate entities, which are companies with aggregated turnover under $50 million and no more than 80% passive income. All other companies pay 30%. These rates are unchanged from 2025-26.

Can a company with investment properties get the 25% rate?

Yes, as long as its aggregated turnover is under $50 million and no more than 80% of its assessable income is passive income such as rent, interest and dividends. A company that earns mostly rent or investment income pays 30%.

What happens if turnover goes over $50 million partway through the year?

The test uses aggregated turnover for the whole income year. If the company’s turnover for the year is $50 million or more, it pays 30% for that year.

What rate do I frank dividends at?

You work out the franking rate assuming the company’s turnover, assessable income and passive income are the same as the previous year. If the company qualified as a base rate entity on last year’s figures, or didn’t exist last year, it franks at 25%. Otherwise it franks at 30%.

When is my company tax return due?

Most small companies on a tax agent’s client list lodge their 2025-26 return by 15 May 2027. Earlier dates apply to large and medium companies, companies with overdue prior-year returns, and companies with total income over $2 million.

Is the $20,000 instant asset write-off still available?

Yes. From 1 July 2026 the $20,000 threshold is permanent for small businesses with aggregated turnover under $10 million. It applies per asset.

Disclaimer: This article provides general information about Australian company tax rates and isn’t personal tax advice. Your company’s rate and due dates depend on its circumstances and connected entities. Always check the latest ATO guidance or speak with a registered tax agent about your situation. ITP Accounting Professionals disclaims any liability for decisions made based solely on the general information in this article.

Tax Deadlines Australia 2026: Key Dates for Your 2025-26 Tax Return

Quick answer

Lodging yourself? Your 2025-26 tax return was due 31 October 2026. Because that date fell on a Saturday, the ATO accepted returns lodged on the next business day, Monday 2 November 2026.

Using a registered tax agent? You must be on the agent’s client list by Saturday 31 October 2026 (not the Monday). Most people then have until 15 May 2027 to lodge.

Behind on earlier years? If any prior-year return was still outstanding at 30 June 2026, your 2025-26 return was due 31 October 2026 even if you use an agent.

Late penalty: $364 for every 28 days late, up to $1,820 for individuals, after the penalty unit rose on 1 July 2026.

Next quarterly BAS: July to September 2026 quarter is due 28 October 2026 (25 November 2026 if lodged electronically through a registered agent).

What you’ll learn:

When your 2025-26 tax return is due, whether you lodge yourself or use a tax agent

The full ATO tax agent lodgement program dates for 2026-27, including payment dates

Quarterly, monthly and annual BAS due dates for the 2026-27 financial year

How much late lodgement now costs after the 1 July 2026 penalty increase

What to do if you have missed a deadline or are years behind

If you’re reading this in late October, you’re not alone. Every year a large share of Australians leave their tax return until the final few weeks. The good news is there is still time, and there are more options than most people realise.

This guide covers every key date for the 2026 tax season: the 2025-26 income year that ended on 30 June 2026, and the business deadlines that run through the 2026-27 financial year. As tax professionals who have helped Australians meet these deadlines for more than 50 years, we’ve also included the traps we see catch people out most often.

Tax deadlines Australia 2026: key dates at a glance

Event	Deadline
First day to lodge 2025-26 tax return	1 July 2026
Q1 2026-27 BAS (July to September 2026)	28 October 2026
Last day to join a tax agent’s client list	31 October 2026 (Saturday)
Self-lodged tax return due	31 October 2026, moves to Monday 2 November 2026
Tax payment due for self-lodgers	21 November 2026, moves to Monday 23 November 2026
Q1 BAS lodged through a registered agent	25 November 2026
Q2 2026-27 BAS (October to December 2026)	28 February 2027, moves to Monday 1 March 2027
Agent date: individuals whose last return showed a tax bill of $20,000 or more	31 March 2027
Q3 2026-27 BAS (January to March 2027)	28 April 2027
Standard tax agent deadline for most individuals	15 May 2027
Q3 BAS lodged through a registered agent	26 May 2027
5 June concession (if any tax owing is also paid)	5 June 2027
Q4 2026-27 BAS (April to June 2027)	28 July 2027
Q4 BAS lodged through a registered agent	25 August 2027 (to be confirmed by the ATO)

When an ATO due date falls on a weekend or public holiday, you generally have until the next business day to lodge and pay, as the ATO explains for BAS and for individual tax returns. The one big exception this year is the cut-off for joining a tax agent’s client list, covered below.

When is your 2026 tax return due?

If you prepare and lodge your own 2025-26 return, the standard deadline is 31 October 2026.

In 2026, 31 October lands on a Saturday. Under the ATO’s weekend rule for individual returns, a self-lodged return is on time if it goes in on the next business day, Monday 2 November 2026.

Don’t treat that as an extra weekend to think it over, though. If you decide on Sunday that you’d rather use a tax agent, it’s already too late to get their extended deadline.

The 31 October cut-off for tax agent clients

To access a tax agent’s later lodgement dates, you need to be on their client list by 31 October. The ATO has told agents that in 2026 this means 31 October itself, not the next business day, even though it falls on a weekend.

So if you’re thinking about using an agent, contact them this week. Some new clients also need to complete a client-to-agent linking step before the agent can add them, which takes a little time.

“Most clients are surprised to learn they can get more time just by using a registered tax agent,” explains senior ITP tax advisor Michelle Roberts. “It’s not just about the extra time. Agents often identify deductions and opportunities that more than pay for their fees.”

Find your nearest ITP office to book in before 31 October, or start your tax return online with an ITP tax accountant.

Tax agent lodgement dates for 2025-26 returns

Registered agents lodge under the ATO’s registered agent lodgement program. Your exact due date depends on your lodgment history and how much tax you owed last year:

Your situation	Lodgment due date
One or more prior-year returns still outstanding at 30 June 2026	31 October 2026
Your latest return showed a tax liability of $20,000 or more	31 March 2027
Everyone else on an agent’s client list, including first-time lodgers	15 May 2027

There is also a 5 June 2027 concession: returns due 15 May can be lodged by 5 June without penalty, provided any tax owing is also paid by then.

Not sure which group you’re in? Your agent can check your due date in the ATO’s systems.

If you’re behind on earlier returns

This rule catches a lot of people. If you had any overdue return from an earlier year at 30 June 2026, you don’t get the May 2027 date, even through an agent. Your 2025-26 return is due 31 October 2026.

The fix is to lodge every overdue prior-year return by 31 October 2026. Once they’re in, your 2025-26 return moves back to the normal program date. The ATO notes it can take up to three weeks for due dates to update after prior-year returns are lodged, so act quickly. Our guide on how to lodge a late tax return explains how to catch up, even if you’re several years behind.

When do you have to pay your tax bill?

Your payment date is separate from your lodgement date, and it’s where many people get caught.

If you lodge yourself: any tax owing is due 21 November 2026, no matter when you lodged. In 2026, 21 November is a Saturday, so under the weekend rule payment made on Monday 23 November 2026 is on time. If you lodge late, payment is still due 21 November, and interest can start from that date. Delaying your lodgement doesn’t buy you more time to pay. The only exception is if your notice of assessment issues after 31 October, in which case payment is due 21 days after it issues.

If you lodge through an agent with a 15 May 2027 due date, the ATO uses staggered payment dates:

Return lodged	Payment due
On or before 12 February 2027	21 March 2027
13 February to 12 March 2027	21 April 2027
From 13 March 2027	5 June 2027

These are the latest possible payment dates. If the ATO takes longer than usual to process your return, the due date on your notice of assessment may be later.

Expecting a refund instead? Our guide to how long a tax refund takes covers typical processing times.

BAS due dates for 2026-27

If you run a business registered for GST, your business activity statement (BAS) deadlines run on their own cycle. Here are the quarterly BAS dates for the 2026-27 financial year, with the later dates available when a registered tax or BAS agent lodges electronically under the BAS agent lodgment program:

Quarter	Lodge and pay yourself	Lodged electronically by a registered agent
Q1: July to September 2026	28 October 2026	25 November 2026
Q2: October to December 2026	28 February 2027 (moves to Monday 1 March 2027)	No extra time
Q3: January to March 2027	28 April 2027	26 May 2027
Q4: April to June 2027	28 July 2027	25 August 2027 (to be confirmed)

A few things to know:

Lodging online yourself? You may be eligible for an extra two weeks to lodge and pay your quarterly BAS under the ATO’s online lodgement concession.

Quarter 2 never gets extra time. Its 28 February due date already includes a one-month extension for the Christmas break.

Agent dates need electronic lodgement. The agent concession applies to eligible statements generated after the previous one was lodged electronically. A paper-lodged previous BAS or a first BAS may have an earlier date.

Monthly BAS

You must report monthly if your GST turnover is $20 million or more, or if the ATO has directed you to. Monthly BAS is due on the 21st of the following month, so the September 2026 statement is due 21 October 2026. Smaller businesses can choose monthly reporting to keep payments smaller and more regular.

Annual GST return

If you’re voluntarily registered for GST with turnover under 75,000(150,000 for not-for-profits), you may report annually. The annual GST return is due 31 October, or 28 February if you don’t need to lodge an income tax return.

Need a hand staying on top of BAS? ITP’s bookkeeping services and sole trader tax help take the quarterly rush off your plate. You can also read up on the two methods for calculating GST on your BAS.

What happens if you lodge late in 2026?

Late lodgement has become more expensive. The Commonwealth penalty unit rose from $330 to $364 for infringements on or after 1 July 2026, according to the ATO’s penalty units table. Because 2025-26 returns fall due after that date, the higher amount applies to anyone who misses this year’s deadline.

The failure to lodge on time (FTL) penalty for individuals and small entities is one penalty unit for each 28 days (or part of 28 days) a return is overdue, up to five units. The penalty is set out in Division 286 of Schedule 1 to the Taxation Administration Act 1953.

How late	Penalty for individuals and small entities
1 to 28 days	$364
29 to 56 days	$728
57 to 84 days	$1,092
85 to 112 days	$1,456
113 days or more	$1,820 (maximum)

Medium entities pay double the penalty unit amount and large entities five times, so business deadlines carry higher stakes.

Expecting a refund? The ATO generally won’t issue an FTL penalty for a late tax return or activity statement that results in a refund or a nil result, unless the penalty was applied before you lodged. That’s not a reason to wait, though. Your refund sits with the ATO until you lodge.

Using an agent? If you gave your agent everything they needed in time and their failure to lodge wasn’t reckless or intentional, you aren’t liable for the penalty.

The FTL penalty isn’t the only consequence. If you owe tax, the general interest charge accrues daily on unpaid amounts. Persistent non-lodgers can receive a default assessment based on the ATO’s own estimate of their income, and the ATO’s data matching means outstanding returns are rarely overlooked for long.

If you’re worried you can’t lodge or pay on time, contact the ATO or a registered tax agent before the due date. There are support options, including payment plans, but they’re easier to arrange before a debt is overdue.

Why lodge early next year? Timing your 2026-27 return

The 2026-27 income year ends on 30 June 2027, and those returns will be due 31 October 2027 for self-lodgers. That date is a Sunday, so the practical deadline will be Monday 1 November 2027. As always, check the ATO’s confirmed dates closer to the time.

When tax time opens, it pays to wait a little. The ATO says most pre-fill data, including wages, bank interest, government payments and private health insurance, is available by late July. Lodging before your income statement is marked “tax ready” makes it more likely you’ll need to amend your return later.

Note: if you have managed investment funds, wait for the annual tax statements, which often arrive in August or September.

You’ll also lodge your 2026-27 return under the new tax rates. From 1 July 2026, the rate on income between $18,201 and $45,000 dropped from 16% to 15%, as set out in the ATO’s resident tax rates and its summary of the legislated personal tax cuts. The tax-free threshold stays at $18,200. You can estimate the effect with ITP’s income tax calculator, and check for tax offsets you might be missing.

Your tax deadline action plan

Before Saturday 31 October 2026:

Decide whether to lodge yourself or use a tax agent

If using an agent, book with ITP so you’re on the client list by 31 October

Lodge any overdue prior-year returns to protect your May 2027 agent date

Gather your documents using our tax checklist: income statements, bank interest, investment and crypto statements, receipts and rental records

If you’re lodging yourself:

Lodge by Monday 2 November 2026 at the latest

Pay any tax owing by Monday 23 November 2026

Contact the ATO before the due date if you can’t pay in full

For business owners:

Lodge your Q1 2026-27 BAS by 28 October 2026, or by 25 November 2026 through an agent

Put every remaining 2026-27 BAS date in your calendar

Review whether monthly reporting would help your cash flow

Read up on small business tax changes for 2026-27

If you’re behind:

Talk to a tax professional now about catching up

Lodge the oldest outstanding years first

Consider voluntary disclosure if you’ve left income out of earlier returns

First time lodging? Our guide on how to lodge your first tax return walks you through it.

At ITP, we’ve helped Australians meet their tax deadlines and maximise their returns for more than 50 years. If you can’t get to an office, get in touch and we’ll help by phone or email.

FAQs: your 2026 tax deadline questions answered

When is the tax return deadline in Australia in 2026?

If you lodge your own 2025-26 return, it’s due 31 October 2026. Because that’s a Saturday, a return lodged on Monday 2 November 2026 is on time. If you’re on a registered tax agent’s client list by 31 October 2026, most returns are due 15 May 2027.

Can I still get an extension if I sign up with a tax agent on 1 or 2 November?

No. To get an agent’s lodgment program date, you must be on their client list by 31 October 2026. The ATO has confirmed that the cut-off doesn’t move to the next business day, even though 31 October is a Saturday.

What is the penalty for lodging a tax return late in 2026?

For returns due on or after 1 July 2026, the failure to lodge penalty is $364 for each 28 days (or part of 28 days) the return is overdue, up to a maximum of $1,820 for individuals and small entities. The ATO generally doesn’t apply the penalty if a late return results in a refund or nil result.

When do I have to pay my tax bill if I lodge myself?

Payment is due 21 November 2026 regardless of when you lodged. In 2026 that’s a Saturday, so the next business day, Monday 23 November 2026, applies. Interest can apply to amounts unpaid after that date.

Does using a tax agent always give me until May 2027?

Not always. If any earlier return was outstanding at 30 June 2026, your 2025-26 return is due 31 October 2026. If your last return showed a tax bill of $20,000 or more, your date is 31 March 2027. Most other individuals have until 15 May 2027.

What are the BAS due dates for 2026-27?

Quarterly BAS is due 28 October 2026, 28 February 2027 (Monday 1 March 2027 in practice), 28 April 2027 and 28 July 2027. Registered agents lodging electronically may have until 25 November 2026, 26 May 2027 and 25 August 2027 for quarters 1, 3 and 4. Quarter 2 gets no extra time.

When can I lodge my 2026-27 tax return?

From 1 July 2027. The ATO recommends waiting until late July, when most pre-filled information is available. Self-lodged 2026-27 returns will be due 31 October 2027, which is a Sunday, so Monday 1 November 2027 in practice.

Disclaimer: This article provides general information about Australian tax deadlines and isn’t personal tax advice. Due dates can change, and your own due date may differ depending on your circumstances. Always check the latest ATO guidance or speak with a registered tax agent about your situation. ITP Accounting Professionals disclaims any liability for decisions made based solely on the general information in this article.

Australian Tax Rates 2026–27: How the Latest Changes Affect Your Take-Home Pay

Updated October 2026 for the 2026–27 income year (1 July 2026 – 30 June 2027).

Quick answer: 2026–27 tax rates at a glance

For 2026–27 (1 July 2026 to 30 June 2027), Australian residents pay no tax on the first $18,200 of taxable income, 15% from $18,201 to $45,000, 30% from $45,001 to $135,000, 37% from $135,001 to $190,000 and 45% on income over $190,000, plus the 2% Medicare levy.

From 1 July 2026, the tax rate on income between $18,201 and $45,000 fell from 16% to 15%, saving most taxpayers up to $268 a year.
The Low Income Tax Offset of up to $700 is unchanged, and the 2% Medicare levy still applies on top of income tax.
A new $1,000 standard deduction for work-related expenses applies from 2026–27, claimable on tax returns lodged from July 2027 without receipts.
The Medicare levy surcharge now starts at $105,000 for singles and $210,000 for families in 2026–27.
The rate falls again to 14% from 1 July 2027, when a new $250 Working Australians Tax Offset also begins.

From 1 July 2026, most Australian workers are keeping a little more of each pay. The rate on the second tax bracket has dropped from 16% to 15%, a new $1,000 standard deduction for work-related expenses has become law, and the Medicare levy surcharge thresholds have moved up. Here is what changed, what stayed the same, and what it means for your pay packet.

How do tax changes affect my take-home pay?

When a marginal rate falls, your employer withholds less tax from every pay, so the change shows up in your bank account straight away rather than only at tax time. Payroll systems have been using the updated ATO withholding rates since 1 July 2026. Other changes, such as the new standard deduction, flow through when you lodge your 2026–27 return from July 2027.

What are the 2026–27 tax rates for Australian residents?

These rates, published by the ATO, apply to Australian residents for tax purposes for the 2026–27 income year.

2026–27 Resident Tax Rates (Before Medicare Levy)

Taxable Income	Marginal Tax Rate	Tax Payable on Excess
$0 – $18,200	0% (Tax-free)	Nil
$18,201 – $45,000	15%	15c for every $1 over $18,200
$45,001 – $135,000	30%	$4,020 + 30c for each $1 over $45,000
$135,001 – $190,000	37%	$31,020 + 37c per $1 over $135,000
$190,001+	45%	$51,370 + 45c per $1 over $190,000

Important: These figures do not include the Medicare levy (2%) or Medicare levy surcharge (1%–1.5%). You’ll usually pay these on top of your income tax.

What changed from 2025–26?

Only one rate moved, under the Treasury Laws Amendment (More Cost of Living Relief) Act 2025. Income between $18,201 and $45,000 is now taxed at 15% instead of 16%. Because every taxpayer earning over $45,000 has $26,800 of income in that bracket, the cut is worth up to $268 a year. All other thresholds and rates are unchanged.

Taxable income	2025–26	2026–27	2027–28 (legislated)
$0 – $18,200	0%	0%	0%
$18,201 – $45,000	16%	15%	14%
$45,001 – $135,000	30%	30%	30%
$135,001 – $190,000	37%	37%	37%
$190,001 and over	45%	45%	45%

What changes from 1 July 2027?

The same bracket falls again, to 14%, lifting the total saving to up to $536 a year compared with 2025–26 rates.
A new $250 Working Australians Tax Offset (WATO) starts for people earning income from work. Together with the 14% rate, this can eliminate income tax on approximately $19,985 of qualifying net labour income, or approximately $24,985 where the full LITO also applies. These are effective income-tax points, not increases to the statutory tax-free threshold or universal gross-salary thresholds.

What is the new $1,000 standard deduction?

From the 2026–27 income year, eligible Australian-resident individuals earning assessable labour income, such as salary and wages, receive an automatic standard deduction of up to $1,000. You do not need to have incurred expenses or kept receipts to receive it. The deduction is capped at your assessable labour income and does not apply if you earn only business or investment income. The ATO’s standard deduction guidance explains who is eligible.

When you can use it: on your 2026–27 tax return, lodged from 1 July 2027. It can’t be claimed on the 2025–26 return you may be lodging now.
Who it suits: people whose work expenses are around or below $1,000. If your genuine expenses are higher, you can still itemise and claim them with records as usual. Most work expenses you claim reduce the standard deduction dollar for dollar, but union fees and professional memberships can be claimed on top. The old $300 limit for claiming without receipts no longer applies from 1 July 2026.
What it’s worth: for someone in the 30% bracket, a $1,000 deduction saves about $320 including the Medicare levy.

The $150 laundry substantiation exception and award transport expense exemption also cease from 1 July 2026, alongside the $300 exception from retaining receipts. Where actual work expenses are claimed, applicable records must support the whole claim, not merely the amount above $1,000.

Has the Low Income Tax Offset changed?

The Low Income Tax Offset (LITO) still reduces tax for lower earners and is applied automatically when you lodge:

Taxable income up to $37,500: $700
$37,501 – $45,000: $700, less 5c for each $1 over $37,500
$45,001 – $66,667: $325, less 1.5c for each $1 over $45,000
Over $66,667: nil

With LITO, a resident whose only income is taxable income pays no income tax until about $22,866 in 2026–27.

How does the Medicare levy work?

Most Australian residents pay a 2% Medicare levy on their taxable income. Low-income earners pay a reduced levy or none at all. In the phase-in range, the levy is 10c for each dollar above the lower threshold until it reaches the full 2%.

What are the Medicare levy low-income thresholds?

The 2026 Federal Budget raised these thresholds by 2.9%, backdated to 1 July 2025. They apply to the 2025–26 return being lodged now, as set out in the ATO’s Medicare levy reduction guidance. The 2026–27 thresholds have not been set yet; they are normally announced in the following May Budget.

Category	No levy at or below	Full 2% levy above
Singles	$28,011	$35,013
Single seniors and pensioners (entitled to SAPTO)	$44,268	$55,335
Families	$47,238 plus $4,338 per dependent child	$59,047 plus $5,423 per dependent child
Families (seniors and pensioners)	$61,622 plus $4,338 per dependent child	$77,028 plus $5,423 per dependent child

What are the Medicare levy surcharge thresholds for 2026–27?

If you don’t hold an appropriate level of private hospital cover and your income for MLS purposes is above the base threshold, you pay a surcharge of 1% to 1.5% on top of the Medicare levy. The thresholds rose from 1 July 2026, as shown in the ATO’s 2026–27 MLS thresholds.

Threshold	Base tier (0%)	Tier 1 (1%)	Tier 2 (1.25%)	Tier 3 (1.5%)
Singles	$105,000 or less	$105,001 – $123,000	$123,001 – $164,000	$164,001 or more
Families	$210,000 or less	$210,001 – $246,000	$246,001 – $328,000	$328,001 or more

The family threshold increases by $1,500 for each dependent child after the first. Income for MLS purposes is more than taxable income: it also includes reportable fringe benefits, reportable super contributions and net investment losses.

Tax tip: For many higher earners without hospital cover, a basic hospital policy costs less than the surcharge. It’s worth comparing before the end of the financial year.

Are you an Australian resident for tax purposes?

The resident rates, the tax-free threshold and LITO only apply if you are an Australian resident for tax purposes. That is not the same as citizenship or visa status. The ATO uses four tests:

Resides test – do you live in Australia in an everyday sense?
Domicile test – is your permanent home in Australia?
183-day test – were you in Australia for more than half the income year?
Commonwealth superannuation fund test – applies to certain Australian government employees working overseas.

Meeting any one test generally makes you a resident. Foreign residents don’t get the tax-free threshold and are taxed from the first dollar of Australian income. If you’re unsure, check the ATO’s residency guidance or speak with one of our tax agents.

How much tax will I pay in 2026–27?

These examples assume a resident single taxpayer with no deductions, no private health insurance issues and no other offsets. They include LITO where it applies and the 2% Medicare levy.

Taxable income	Income tax (after LITO)	Medicare levy	Total tax	Take-home	Effective rate	Saving vs 2025–26
$40,000	$2,695	$800	$3,495	$36,505	8.7%	$218
$60,000	$8,420	$1,200	$9,620	$50,380	16.0%	$268
$90,000	$17,520	$1,800	$19,320	$70,680	21.5%	$268
$120,000	$26,520	$2,400	$28,920	$91,080	24.1%	$268
$150,000	$36,570	$3,000	$39,570	$110,430	26.4%	$268

Jane earns $60,000. She pays $8,520 in income tax, less $100 LITO, plus a $1,200 Medicare levy: $9,620 in total, or about 16% of her income. That’s $268 less than in 2025–26. If she also takes the $1,000 standard deduction when she lodges, she saves roughly another $320.

Ben earns $90,000. He pays $17,520 in income tax plus a $1,800 Medicare levy: $19,320, an effective rate of about 21.5%. He keeps $268 more than last year.

These figures are estimates. Your actual result depends on your deductions, offsets, super contributions, HELP debt and private health cover. To run your own numbers, try our income tax calculator.

What do the 2026–27 changes mean for you?

The 2026–27 changes are modest but broad: almost every taxpayer earning over $45,000 keeps an extra $268 this year, workers get a simpler way to claim expenses, and higher earners have a little more room before the Medicare levy surcharge applies. Another round of cuts follows on 1 July 2027.

Tax is personal, though. The real impact depends on your income, your deductions and choices like private health cover, which is where expert advice makes a difference.

Frequently Asked Questions

Has my pay already changed?

Yes. The ATO updated its withholding schedules from 1 July 2026, and payroll software uses them automatically, so the 15% rate has been reflected in pay since then.

Can I claim the $1,000 standard deduction on my 2025–26 return?

No. It starts with the 2026–27 income year, so the first return you can claim it on is the one you lodge from July 2027. If you’re lodging your 2025–26 return yourself, the deadline is 31 October 2026; using a registered tax agent may give you more time. Already behind? Read our guide to lodging a late tax return.

Is the LMITO coming back?

No. The Low and Middle Income Tax Offset ended after 2021–22. The Low Income Tax Offset still applies, and the new Working Australians Tax Offset begins in 2027–28.

Can a pay rise leave me worse off?

No. Only the part of your income above a threshold is taxed at the higher rate, so earning more always leaves you with more after tax. A temporary dip in a single pay is usually a payroll timing issue and is sorted out when you lodge your return.

What is the super guarantee rate for 2026–27?

12% of qualifying earnings, unchanged from 2025–26. From 1 July 2026, under Payday Super, employers must pay super at the same time as wages, so it reaches your fund within 7 business days of payday.

Ready to make the most of the latest tax rules?

Talk to an ITP tax specialist today. We’ll help you make sense of the changes and make sure you’re claiming everything you’re entitled to. Book an appointment with an ITP Accounting Professional.

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How to Take Money Out of Your Company: 5 Methods for Australian Directors

Quick answer

You can take money out of your company in five common ways. Each payment needs to be properly recorded and treated correctly for tax.

Salary or director’s fees: you receive taxable income for your work. It is generally deductible for the company, with payroll and super obligations.

Dividends: you receive a shareholder payment, potentially with credits for company tax already paid. Dividends are not deductible for the company.

Repayment of money you lent the company: getting back genuine loan principal is generally not taxable.

Fringe benefits: you receive a benefit, such as private use of a company car, rather than cash. Fringe benefits tax may apply unless an exemption or reduction is available.

A company loan: you borrow money that must be repaid. Division 7A requirements may apply.

Simply transferring money to yourself or paying personal bills from the company account can create an unexpected tax bill.

Owning a company does not mean the money in its bank account belongs to you personally, even if you are its only director and shareholder.

You can receive money or benefits from your company, but each payment needs to be properly recorded and treated correctly for tax. Simply transferring money to yourself or paying personal bills from the company account can create an unexpected tax bill.

This guide explains five common options for Australian private-company owners.

Your options at a glance

Option	What it means for you	What it means for the company
Salary or director’s fees	You receive taxable income for your work.	Generally deductible, with payroll and super obligations.
Dividends	You receive a shareholder payment, potentially with credits for company tax already paid.	Not deductible; dividend and franking rules apply.
Repayment of money you lent the company	Getting back genuine loan principal is generally not taxable.	Reduces the company’s debt; the principal repayment is not deductible.
Fringe benefits	You receive a benefit, such as private use of a company car, rather than cash.	Fringe benefits tax may apply unless an exemption or reduction is available.
A company loan	You borrow money that must be repaid.	Division 7A requirements may apply; interest received is taxable income.

Salary, dividends and loans have different tax consequences. Calling a transfer “drawings” does not decide which rules apply.

1. Pay yourself a salary or director’s fees

A salary pays you for working in the business. Director’s fees pay you for carrying out your duties as a director.

You include these payments in your personal tax return. The company can generally claim a deduction where the payment relates to its business and it meets the relevant tax withholding and reporting requirements.

What the company needs to do

The company generally must:

withhold tax from your pay and send it to the ATO;

report through Single Touch Payroll, unless an exemption or deferral applies; and

pay super where you are eligible.

For 2026–27, Australian resident income tax rates range from 15% to 45% above the tax-free threshold. Generally, the Medicare levy is an additional 2%, although reductions and exemptions can apply. Your final tax depends on your total taxable income, not just the amount paid by your company.

Super has changed from 1 July 2026

The super guarantee rate remains 12%. Under Payday Super, it is calculated on eligible employees’ qualifying earnings, which include ordinary pay and certain other payments.

Super must generally reach the super fund within seven business days after payday. Some exceptions allow longer. It is no longer enough to follow the old quarterly payment timetable. These requirements also apply to eligible paid directors.

You can also arrange additional employer super contributions through salary sacrifice. The general concessional contributions cap is $32,500 for 2026–27, including compulsory employer contributions, salary-sacrifice contributions and personal contributions claimed as a tax deduction. Eligible people may have unused cap amounts available from earlier years. Remember that super is generally preserved until you meet a release condition. It is not money available for everyday spending.

When this option can suit: you want regular income and payment for your work in the business.

2. Pay a dividend to shareholders

A dividend is a payment you receive because you own shares, not because you are a director.

Dividends commonly distribute company profits. They are not deductible to the company. If a dividend is franked, it comes with a credit recognising company tax already paid.

For an eligible Australian resident shareholder, the usual process is:

Include the cash dividend plus its franking credit in your tax return.

Calculate your tax.

Use the franking credit to reduce that tax.

Section 207-20 of the Income Tax Assessment Act 1997 describes the credit as a tax offset:

“equal to the … franking credit on the distribution”.

You may owe extra tax or receive a refund of unused credits, depending on your circumstances and whether you meet the eligibility rules. A franked dividend is not automatically tax-free.

Example: a $30,000 fully franked dividend

Suppose the company pays you $30,000, fully franked at a 25% company tax rate. Your franking credit is $10,000, so you include $40,000 in your assessable income.

If that entire additional $40,000 falls within your 30% tax bracket, and a full 2% Medicare levy applies, the additional personal tax is $2,800, before any other adjustments.

Workings

Step	Calculation	Amount
Franking credit	$30,000 x 25 ÷ 75	$10,000
Income included	$30,000 + $10,000	$40,000
Tax and Medicare levy	$40,000 x 32%	$12,800
Less franking credit	$12,800 − $10,000	$2,800
Check	$10,000 company tax + $2,800 personal tax	$12,800 total tax

This example assumes you qualify for the franking credit and ignores other offsets, surcharges and income-tested consequences. The actual result depends on your total income.

Not every company uses the same tax rate

The general company tax rate is 30%. A qualifying “base rate entity” pays 25%. Broadly, this requires:

aggregated turnover below $50 million, including relevant connected businesses; and

no more than 80% of assessable income being specified passive income, such as rent, interest and investment income.

The rate used to calculate franking credits follows separate rules, generally using previous-year figures. It is not automatically the company’s current tax rate.

Check that the company can pay the dividend

Having cash in the bank is not enough.

Under section 254T of the Corporations Act 2001:

assets must exceed liabilities by enough to cover the dividend;

the payment must be fair and reasonable to shareholders as a whole; and

it must not materially harm the company’s ability to pay creditors.

The Act requires that the payment:

“does not materially prejudice the company’s ability to pay its creditors”.

Record the decision properly and issue the required dividend statement. Franking also requires sufficient credits and compliance with the franking rules.

When this option can suit: the company has funds available for shareholders after meeting its business commitments.

3. Repay money you previously lent the company

You may have lent your company money to start the business, buy equipment or cover a cash shortage.

If the company genuinely owes you that money, it can repay the outstanding loan principal. That repayment is generally not taxable to you: you are getting back money you previously lent, rather than receiving income.

The company does not deduct the principal repayment.

Keep evidence of the loan

Useful records include:

bank transfers showing money you advanced;

a loan agreement; and

an accurate loan account in the company’s books.

Repayments must not exceed what the company genuinely owes you. Money paid for shares is not automatically a loan that can be repaid this way.

What about interest?

Interest is separate from principal:

you generally declare interest as income;

the company may deduct it where the borrowing relates to earning income or carrying on its business.

The deduction is not automatic. For example, private or capital expenditure restrictions can matter.

When this option can suit: the company already has a genuine, documented debt to you.

4. Provide benefits instead of cash

The company may provide a benefit as part of your employment package, such as private use of a company car.

These arrangements can fall under fringe benefits tax, or FBT. A benefit provided because you are a shareholder, rather than an employee, may instead raise Division 7A issues.

How FBT works

For the FBT year ending 31 March 2027, the rate is 47%. It applies to an adjusted, or “grossed-up”, taxable value, not simply the benefit’s purchase price.

The published gross-up factors are:

2.0802 where GST credits are available; and

1.8868 where they are not.

The taxable value depends on the type of benefit, how it is used, any employee contributions and available exemptions. This means ordinary fringe benefits are not automatically cheaper than salary.

The company can generally deduct qualifying benefit costs and FBT, although capital assets and other special rules can change how deductions are claimed.

You generally do not pay ordinary income tax on the fringe benefit itself. However, a reportable benefit can affect income-tested obligations and entitlements.

Some benefits receive favourable treatment

Examples include:

qualifying work-related portable devices;

certain eligible electric cars; and

expenses whose FBT value can be reduced because you could have deducted the expense yourself.

For the electric-car exemption, key conditions include a qualifying battery-electric or hydrogen fuel-cell car, first held and used on or after 1 July 2022, provided to a current employee or their associate, with no luxury car tax ever payable on its importation or sale.

Plug-in hybrids generally stopped qualifying from 1 April 2025, although limited transitional arrangements apply. An exempt electric car can still create a reportable fringe benefit.

When this option can suit: a particular benefit meets an exemption or concession and fits your genuine needs.

5. Borrow money from the company

A company loan is not a tax-free withdrawal. You owe the money back.

Loans to private-company shareholders and their associates, including certain family members, can trigger Division 7A. Unless an exception applies, an unpaid loan can be treated as a taxable dividend.

Two common ways to avoid that outcome are to:

genuinely repay the loan before the required deadline; or

put it on complying Division 7A terms before that deadline.

The deadline can arrive earlier than expected

The company’s “lodgment day” is the earlier of:

its tax return due date; and

the date it actually lodges the return.

Lodging early can therefore bring the deadline forward.

What a complying loan needs

A complying loan generally requires:

a written agreement before lodgment day;

interest at least equal to the annual benchmark rate for years after the loan year;

a permitted repayment term; and

minimum annual repayments in later years.

The normal maximum term is seven years.

Up to 25 years is available where the whole loan is secured by a registered mortgage over real property, and the property’s value, after higher-ranking secured debts, is at least 110% of the loan when first made.

For companies with a standard 30 June year-end, the benchmark interest rate for 2026–27 is 8.77%. The rate is reviewed annually; do not assume it stays the same for the loan’s entire term.

Repayments include principal and interest

Minimum yearly repayments generally begin in the income year after the loan is made. For a standard 30 June year-end, they must be made by 30 June.

The company declares the interest as income. Your interest is generally not deductible if you borrowed for private purposes, such as a home deposit or renovation.

A properly arranged dividend or salary payment can sometimes be offset against the loan. But that payment remains taxable in the normal way. Simply backdating an accounting entry does not create a valid repayment, and borrowing company money to repay the same company can be disregarded.

When this option can suit: you need temporary access to funds and can afford the interest and repayments.

What happens if Division 7A goes wrong?

Problems commonly arise when owners:

pay personal bills with company money;

use the company credit card for holidays or school fees;

make informal withdrawals without recording their purpose; or

miss company-loan repayments.

Depending on the transaction:

an unpaid, non-complying loan can become a deemed dividend;

a missed minimum repayment can produce a deemed dividend equal to the shortfall; and

forgiving a shareholder’s debt can also produce a deemed dividend.

These amounts are subject to the company’s distributable surplus, a specific tax calculation, not simply its bank balance or current-year profit.

Deemed dividends are generally unfranked, meaning there is no credit for company tax already paid. Limited relief exists for honest mistakes or accidental omissions, and specific family-law rules can permit franking. Relief is not automatic.

Importantly, a tax bill does not necessarily cancel the underlying debt.

What if a family trust owns the shares?

A family trust may receive company dividends and distribute trust income to eligible beneficiaries, subject to its deed and the tax rules. This does not mean company money can simply be paid to whichever family member has the lowest tax rate.

Different issues arise where a trust allocates income to a company but leaves it unpaid. The ATO is reviewing its guidance following the High Court’s decision in Commissioner of Taxation v Bendel. Do not assume that all unpaid trust entitlements or related loans have the same tax treatment.

The main takeaway

There is no single best way to pay yourself. Many owners combine regular salary, genuine loan repayments, dividends and suitable benefits.

These are five common options, not an exhaustive list. Genuine business-expense reimbursements and formal capital transactions can have different rules.

Before money leaves the company, identify what the payment is, record it correctly and check that the company can afford it.

Review your director’s loan account, payroll settings and planned dividends before making your next withdrawal.

ITP’s business tax accountants can model the options for you, document loans and dividends properly, and keep your Division 7A position compliant. Find your nearest ITP office to book a time, or read more about company tax returns and trust accounting.

FAQs: taking money out of your company

Can you take money out if the company made a loss?

Possibly. A current-year loss does not automatically prevent salary payments or repayment of a genuine loan. However, the company must still be able to meet its obligations. A dividend requires the legal tests explained above, and directors must not allow insolvent trading. A loss is not permission to empty the company’s bank account.

Does the money in my company’s bank account belong to me?

No. Owning a company does not mean the money in its bank account belongs to you personally, even if you are its only director and shareholder.

Is a franked dividend tax-free?

A franked dividend is not automatically tax-free. You may owe extra tax or receive a refund of unused credits, depending on your circumstances and whether you meet the eligibility rules.

Is repaying a loan I made to the company taxable?

If the company genuinely owes you that money, it can repay the outstanding loan principal. That repayment is generally not taxable to you: you are getting back money you previously lent, rather than receiving income. Interest is separate from principal, and you generally declare interest as income.

Are fringe benefits cheaper than salary?

Not automatically. For the FBT year ending 31 March 2027, the rate is 47%. It applies to an adjusted, or “grossed-up”, taxable value, not simply the benefit’s purchase price. The taxable value depends on the type of benefit, how it is used, any employee contributions and available exemptions.

What is the Division 7A benchmark interest rate for 2026–27?

For companies with a standard 30 June year-end, the benchmark interest rate for 2026–27 is 8.77%. The rate is reviewed annually; do not assume it stays the same for the loan’s entire term.

How long can a complying company loan run?

The normal maximum term is seven years. Up to 25 years is available where the whole loan is secured by a registered mortgage over real property, and the property’s value, after higher-ranking secured debts, is at least 110% of the loan when first made.

What happens if I miss a minimum loan repayment?

A missed minimum repayment can produce a deemed dividend equal to the shortfall. Deemed dividends are generally unfranked, meaning there is no credit for company tax already paid. A tax bill does not necessarily cancel the underlying debt.

Can I use the company credit card for personal expenses?

Problems commonly arise when owners use the company credit card for holidays or school fees, or pay personal bills with company money. Depending on the transaction, an unpaid, non-complying loan can become a deemed dividend.

Disclaimer: This article provides general information about taking money out of a company and isn’t personal tax or legal advice. The right approach depends on your company’s position and your own circumstances. Always check the latest ATO guidance or speak with a registered tax agent before acting. ITP Accounting Professionals disclaims any liability for decisions made based solely on the general information in this article.

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Example

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Before Saturday 31 October 2026:

If you’re lodging yourself:

For business owners:

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FAQs: your 2026 tax deadline questions answered

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2026–27 Resident Tax Rates (Before Medicare Levy)

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