Tax return 2025–26 — How to make sense of tax time

Now: what is a tax return?

If you've earned any money in Australia throughout the financial year (1 July to 30 June) you need to declare this at tax time. This includes children.

If you've paid too much tax throughout the year you'll get some back in the form of a return. If you've underpaid, you'll owe some tax.

Your tax return is also a chance to declare work-related expenses as deductions, to boost your return.

If you're after a bit of help with your tax return, an Australian tax agent can help you correctly lodge your tax return.

"In the second year of doing my tax return as a non-permanent resident I realised that I could claim the taxes I had paid in the year for Medicare as I am not eligible for it. Once my accountant told me this, all I had to do was fill a form which was submitted with my tax return. I was even able to submit one for my first year when I didn't claim it. Depending on how much you are earning it can be upwards of $2,000!"

Juan Peña

Finder crew member

All the changes from 1 July 2026

Income tax cuts

From 1 July 2026 the 16% tax rate will drop to 15%. This effectively means a tax cut for most Australian workers.

The 16% tax rate applies to every earned between $18,201 – $45,000.

Moving to 15% means most workers will pay $268 less in tax in the 2026-27 financial year.

From 1 July 2027 this rate falls to 14%.

Payday super

From 1 July your employer must pay your superannuation along with your salary (rather than every 3 months).

This means your super gets paid earlier, and makes it much easier to check you're getting paid correctly.

$20,000 Instant Asset Write-Off

The $20,000 Instant Asset Write-Off will become permanent from 1 July 2026, assuming the legislation passes parliament. This write-off allows businesses with turnover below $10 million a year to instantly claim a full deduction on business assets that cost up to $20,000.

Changes from 1 July 2027

$1,000 instant tax deduction

Workers will be able to claim an instant $1,000 tax deduction without providing receipts,. This should save the average worker around $205 when they do their 2026–27 tax return next year.

Working Australians Tax Offset

From 1 July 2027 every working Australian gets a $250 tax cut. This will be achieved by raising the tax-free threshold to $19,985.

How to lodge your tax return

• Step 1. Decide which way to lodge - online yourself or with a tax agent. Online through the ATO is free and simple; you just need records of your deductible expenses. If you use a tax agent they can manage the process for you and help you claim for items you may not have realised you could claim.
• Step 2. Either way: You'll need to gather the info and documents you need to support your claims. Receipts, invoices, bank statements: these will all help you verify your claims, if you ever get audited.
• Step 3. Set aside a couple of hours to lodge your tax return via the ATO's online portal, inside MyGov. Often, information like your income and any bank interest you've earned is already listed, if you give your MyGov account permission to collect data from your employer and the bank. If you don't want to dive into it yourself, you can hand all your docs over to your tax agent to do it for you.
• Step 4. Lodge your return with the ATO. The earliest you can do this is around mid-July, as the government gives banks and employers a couple of weeks to get all of their information filed and up to date before you lodge.

ATO Tax return deadlines

If you're doing your tax return yourself online, you have until 31 October 2026 to submit your tax return.

If you're using a registered tax professional you generally have until May in the following year.

Make sure you lodge you tax return ahead of the deadline set by the ATO each financial year, or you risk getting a penalty.

Should you do your tax return yourself, or get professional support?

You can complete your tax return yourself online for free using the ATO's tool myTax, or you can seek support from a registered tax agent.

An accountant or tax agent can help you maximise your deductions and is especially useful if you have a complex tax situation (multiple income streams or investments, you run a business etc).

More helpful tax guides

• The pros and cons of tax agents and DIY
• Choosing the right tax agent
• How to maximise your tax deductions

Expert insight: Why your tax return actually helps you

"Most people earning an income in Australia will need to lodge a tax return, and while this comes with some administration work, it also comes with an opportunity. When you use the rules to your advantage, you'll keep more of your hard-earned income and get ahead faster. Like anything worthwhile, tax planning is a skill set you build over time, and building your knowledge is the first step. "

Ben Nash

Financial adviser & founder, Pivot Wealth

Expert insight: Remember to think about capital gains

"When deciding if you need to lodge a tax return, it's important to consider whether you have capital gains or foreign income. Even if your taxable income is below the tax-free threshold, you must still lodge a return if you've realised any capital gains (such as from selling shares, cryptocurrency, or property) or received foreign income. This is crucial because the ATO requires you to report these types of income, and their reporting capabilities are continuously improving. Failing to declare can result in significant fines and penalties"

Nicole Kelly

CEO & founder, TaxTank

DISCLAIMER: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information applicability to their own particular circumstances.

Written by

Sarah Megginson

Money expert + media spokesperson

Sarah is the author of How to Raise Rich Kids. With over 20 years of experience in property, finance and investment journalism, she is a trusted expert whose insights regularly appear across television, radio and print media, including Sunrise, Channel 7 News, Bloomberg and Yahoo! Finance. She has previously served as managing editor for Your Investment Property and Australian Broker. Her expert advice has been shared in the media over 3,500 times. Sarah holds a Bachelor’s degree in Communications and a Tier 1 Generic Knowledge certification, which complies with ASIC standards. See full bio

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