What the Latest Changes Mean for You?

A new financial year is the perfect opportunity to review your financial position and ensure your strategies continue to align with your goals. Whether you’re building wealth, approaching retirement, already retired or running a business, understanding these changes can help you make more informed financial decisions.

Below is a summary of the key changes that apply from 1 July 2026 announcements that may affect your current situation future planning.

Changes Effective from 1 July 2026

Personal Income Tax Cuts

One of the most notable changes this financial year is the reduction in the personal income tax rate applying to taxable income between $18,201 and $45,000.

The tax rate has reduced from 15% to 14%, providing tax relief to all Australian taxpayers. 

While the annual tax saving may appear modest, these reductions are designed to provide ongoing relief as part of the Government’s broader personal tax reform agenda.

New Annual Maximum Superannuation Contribution Base

A significant administrative change accompanies the implementation of Payday Super.

Previously, the Maximum Superannuation Contribution Base was assessed quarterly. From the 2026–27 financial year, it is now assessed annually.

The annual Maximum Superannuation Contribution Base is $270,830.

For employees earning above this amount, employers are generally not required to make compulsory Superannuation Guarantee contributions on earnings exceeding the annual threshold.

This change provides greater flexibility for employees receiving bonuses, commissions or irregular remuneration throughout the year.

Higher Superannuation Contribution Caps

Concessional Contribution Cap

The annual concessional contribution cap has increased to $32,500.

Individuals may also be eligible to utilise unused concessional contribution caps from previous years if they satisfy the relevant eligibility criteria.

Non-Concessional Contribution Cap

The annual non-concessional contribution cap has increased to $130,000.

Eligible individuals may also be able to bring forward up to three years of non-concessional contributions, allowing contributions of up to $390,000, depending on their Total Super Balance.

These increased limits may present valuable opportunities for those looking to accelerate retirement savings or contribute proceeds from asset sales or inheritances.

Superannuation Paid on Government Paid Parental Leave

From 1 July 2026, eligible parents receiving Government Paid Parental Leave will also receive superannuation contributions paid by the Government.

This reform aims to reduce the long-term impact that career break, particularly for women can have on retirement savings.

Transfer Balance Cap Increases

The General Transfer Balance Cap has increased from $2.0 million to $2.1 million.

The Transfer Balance Cap limits the amount of superannuation that can be transferred into the tax-free retirement pension phase.

Individuals commencing a retirement income stream after 1 July 2026 may benefit from the higher cap, while those who have already commenced a pension may receive proportional indexation depending on their personal transfer balance account.

Payday Super Continues to Change Employer Obligations

The move toward Payday Super represents one of the most significant payroll reforms in recent years.

Rather than making superannuation contributions quarterly, employers are progressively transitioning to paying super much closer to the date employees receive their wages.

Businesses should ensure payroll systems and cash flow processes are prepared for these ongoing reforms.

Changes to Centrelink Deeming Rates

Following recommendations from the Australian Government Actuary, Centrelink deeming rates increased in March 2026 after remaining frozen for several years. The lower deeming rate is now 1.25%, while the upper deeming rate is 3.25%. The financial asset thresholds used to determine which deeming rate applies were also indexed from 1 July 2026.

Deeming is the method Centrelink uses to estimate the income earned from financial assets, rather than assessing the actual investment return.

For some Age Pension recipients, the higher deeming rates may reduce pension entitlements if their deemed income increases. Conversely, individuals earning investment returns above the deeming rates may benefit, as Centrelink continues to assess income using the lower deemed amount rather than actual earnings.

This is a timely reminder to review your investment strategy alongside your Centrelink position to ensure it remains appropriate for your retirement objectives.

ATO Interest Charges No Longer Tax Deductible

Businesses should also be aware that interest charged by the Australian Taxation Office on unpaid tax liabilities is no longer tax deductible.

This change increases the cost of carrying tax debts and reinforces the importance of proactive cash flow management and timely tax payments.

What Does This Mean for You?

While many of these changes are administrative or the result of annual indexation, they may create valuable planning opportunities depending on your circumstances.

This may be an appropriate time to:

• Review your superannuation contribution strategy.
• Consider whether salary sacrifice remains appropriate.
• Maximise concessional or non-concessional contributions.
• Review retirement income strategies.
• Ensure your investments remain aligned with your long-term goals.
• Revisit estate planning and beneficiary nominations.
• Review insurance inside and outside superannuation.
• Update your tax planning strategy well before the end of the financial year.

Financial planning is not just about responding to legislative change—it’s about ensuring your strategy continues to evolve alongside your goals.

How We Can Help

Every person’s financial situation is different, and legislative changes often create opportunities that may not be immediately obvious.

Whether you’re accumulating wealth, preparing for retirement, already enjoying retirement or managing a family business, understanding how these changes apply to your circumstances can help you make more informed decisions.

Our team can help you review your financial strategy, identify opportunities created by the new financial year and ensure your plan remains aligned with your long-term objectives.

If you’d like to discuss how these changes may affect you or arrange a review of your financial plan, we’d love to help. 

IMPORTANT INFORMATION: This document has been prepared by Enhance Financial Partners, ABN 45 146 707 173 AFSL 515518, based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Enhance Financial Partners makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information.