2026–2028 Income Tax Cuts: What They Mean for You and Your Business

• Tax
• Small Business
• Accounting
• Payroll

Australia’s tax system continues to change, and for employees, sole traders, and small business owners, staying up to date matters.

Following earlier tax changes, the Australian Government has scheduled further personal income tax cuts for the 2026–27 and 2027–28 financial years. While these cuts mean a little more take-home pay for many Australians, they also create extra payroll and compliance work for employers.

That is where Gimbla helps. Our accounting software is designed to make payroll easier, keep records accurate, and help small businesses stay compliant as tax rules change.

Gimbla helps small businesses and sole traders manage accounting, payroll, and compliance with less stress.

1. What Are the 2026–2028 Tax Cuts?

The upcoming tax cuts apply to the lowest taxable income bracket: $18,201 to $45,000.

These changes are designed to provide cost-of-living relief and reduce the effect of bracket creep over time.

Here is what is changing:

• From 1 July 2026: the tax rate for income between $18,201 and $45,000 reduces from 16% to 15%.
• From 1 July 2027: the same bracket reduces again from 15% to 14%.

Because this bracket applies to all taxpayers earning above $45,000, many Australians will receive the full benefit of the cut. The maximum benefit is around $268 per year from 2026–27, with a further $268 per year from 2027–28.

While the weekly increase may be modest, these changes still matter for payroll, cash flow, and tax planning.

At a Glance: Income Tax Rates

Income Threshold	2025–26 Rates	2026–27 Rates	2027–28 Rates
$0 – $18,200	Tax free	Tax free	Tax free
$18,201 – $45,000	16%	15%	14%
$45,001 – $135,000	30%	30%	30%
$135,001 – $190,000	37%	37%	37%
Over $190,000	45%	45%	45%

2. What This Means for Employers

For employers, tax cuts are not just a headline. They affect payroll calculations, PAYG withholding, and reporting obligations.

Key areas to watch include:

• PAYG withholding updates
  Employers need to ensure the correct tax is withheld from employee wages when the new financial year begins.

• Payroll accuracy
  Even small tax rate changes can affect take-home pay, payslips, and payroll reports.

• Cash flow planning
  Employees may see slightly higher take-home pay, while businesses need to ensure payroll systems are updated on time.

• End-of-year reporting
  Accurate records help make tax time smoother and reduce the risk of errors.

3. How Gimbla Helps

Gimbla is built to help small businesses manage accounting and payroll without unnecessary complexity.

With Gimbla, you can keep your payroll records organised, reduce manual work, and stay ready for changes to tax rates and compliance requirements.

Instead of manually tracking every tax table change yourself, Gimbla helps simplify the process so you can focus on running your business.

Conclusion

The 2026–27 and 2027–28 income tax cuts may be small, but they still have a real impact on payroll and compliance.

For small businesses and sole traders, staying ahead of these changes is important. With modern accounting software like Gimbla Payroll, you can manage payroll more confidently, keep your records accurate, and spend less time worrying about tax updates.