How to do your tax return for 2025–26
How to make sense of tax time and everything that changed from July 1.
Key takeaways
- If you work or earn any sort of income through investments, you're required to lodge a tax return with the Australian Tax Office (ATO) each year.
- The financial year runs from July 1 through to June 30. Your tax return needs to be lodged by 31 October 2026 (or later if you have an accountant).
- Several big tax changes came into effect from 1 July, which it's important to know about.
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!"
All the changes from 1 July 2026
Income tax cuts
As of 1 July 2026, the 16% tax rate dropped to 15%. This effectively delivered a tax cut to most Australian workers.
The 15% tax rate applies to every dollar 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
As of 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 has become permanent from 1 July 2026. 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.
$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.
Changes from 1 July 2027
Working Australians Tax Offset
From 1 July 2027 every working Australian gets a $250 tax cut. This $250 tax offset effectively raises the tax-free threshold.
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 your 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. "
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"
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.
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Where do you input RECS in Mytax? Or view it from pre fill?
Hi Kathryn,
Thanks for your question.
RECS is generally registered through the REC Registry, rather than through MyTax. If you need further assistance, please get in touch with the REC Registry on 1300 553 542.
I hope this has helped.
Cheers,
Shirley
Sorry, I made a typo, I meant RESC as in Reportable Employer Super Contributions.
Thanks.
Hi Kathryn,
Thanks for your question.
The reportable employer superannuation contributions (RESC) section can be found under IT2.
Please add up the reportable employer superannuation contributions amounts shown on your payment summaries and then write the total at T item IT2.
Hope this helps.
how much income tax i have to pay to ATO (being OZ citizen) if I work in US for 1 year and earn USD 100000
Hi ABC,
Thanks for your question.
Generally, you need to pay tax in Australia if you’ve earned the income through an Australian source.
If you would like to discuss your personal situation, we recommend you to speak to an online tax agent.
Regards,
Shirley
what is the best way for me to lodge a partnership tax return for industry code 85990 natural therapies?
Can I do this online?
Hi Peter,
Thanks for your question.
A partnership tax return has a similar structure to that of an individual’s return. It can be done online.
However, if you require assistance, we recommend that you speak to a tax agent.
Cheers,
Shirley