What’s New for the 2025-26 Tax Return: Key Changes Every Australian Taxpayer Should Know
Stay Ahead of the Changes Before You Lodge
Every financial year brings changes to Australia’s tax landscape, and 2025-26 is no exception. Whether you’re an individual employee, a sole trader, or running a company, understanding what’s new helps you maximise your entitlements and avoid costly mistakes when lodging your tax return.
As a CPA and Registered Tax Agent at Tax Serve in North Lakes, I closely monitor legislative and administrative changes so my clients don’t have to. Here’s your comprehensive guide to the key changes affecting 2025-26 tax returns.
Revised Individual Tax Rates (Stage 3 Tax Cuts — Full Effect)
The Stage 3 tax cuts, which took effect from 1 July 2024, continue to apply for the 2025-26 financial year. If this is your second year under the new rates, here’s a reminder of the current brackets:
| Taxable Income | Tax Rate |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
Plus the Medicare levy of 2%. The key benefit of these rates is the expanded 30% bracket (up to $135,000), which provides significant relief for middle-income earners compared to the pre-2024 structure. For a Brisbane professional earning $120,000, the tax saving compared to the old rates is approximately $2,179 per year.
Superannuation Guarantee Rate Increase
The super guarantee rate increased to 12% from 1 July 2025. This means employers must contribute 12% of each eligible employee’s ordinary time earnings to their nominated super fund. Key impacts:
- Employees: Your super contributions should be higher — check your payslips and super fund statements
- Employers: Ensure your payroll system is updated to reflect the 12% rate from 1 July 2025
- Self-employed: The concessional contributions cap remains at $30,000, but the higher SG rate may reduce your available cap space if you also receive employer contributions from another job
Updated Work From Home Deduction Rules
The ATO’s revised fixed-rate method for home office expenses (67 cents per hour) continues to apply. To claim under this method, you must keep a record of all hours worked from home during the income year — a timesheet, roster, diary, or time-tracking app is acceptable.
The fixed rate covers electricity, gas, phone, internet, stationery, and computer consumables. You can claim the decline in value of depreciating assets (desk, chair, monitor) separately on top of the fixed rate. For Mango Hill and Dakabin professionals working hybrid arrangements, this deduction can be worth $1,500-$3,000 per year.
ATO Focus Areas for 2025-26 Returns
Each year, the ATO identifies areas of concern where it will increase scrutiny and data matching. For 2025-26, expect heightened attention on:
Rental Property Deductions
The ATO continues its crackdown on incorrect rental property claims. Common errors include claiming loan interest on the private portion of a refinanced loan, failing to apportion expenses for periods of personal use, and incorrectly classifying capital improvements as repairs. Griffin and Moreton Bay property investors should ensure their depreciation schedules are current and claims are properly substantiated.
Cryptocurrency and Digital Assets
If you’ve bought, sold, swapped, or used cryptocurrency during 2025-26, you need to report any capital gains or losses. The ATO has sophisticated data-matching programs with Australian crypto exchanges. Don’t assume small transactions fly under the radar — they don’t.
Side Hustles and Gig Economy Income
Income from platforms like Uber, Airbnb, Airtasker, and similar services must be declared. The ATO matches data from these platforms against tax returns. If you’ve earned income from the sharing economy, make sure it’s included in your return and that you’re claiming all related deductions.
Overclaimed Work-Related Expenses
The ATO uses advanced analytics to compare your claims against others in similar occupations and income brackets. Claims that are significantly above the norm will be flagged for review. The golden rule: you must have spent the money, it must relate to earning your income, and you must have records to prove it.
Changes to Small Business Concessions
Small businesses (aggregated turnover under $10 million) continue to access a range of valuable concessions:
- Simplified depreciation: Pool assets and depreciate at 15% in the first year, 30% thereafter
- Immediate deduction for start-up costs: Professional, legal, and accounting costs of establishing a business
- Simplified trading stock rules: No stocktake required if stock value changed by less than $5,000
- Two-year amendment period: Reduced from four years for most income tax assessments
Check the ATO’s small business concessions page to ensure you’re taking advantage of every available concession.
Medicare Levy Surcharge and Private Health Insurance
The Medicare Levy Surcharge (MLS) thresholds may have been adjusted for 2025-26. If you earn above the singles threshold (approximately $93,000) or family threshold (approximately $186,000) and don’t have an appropriate level of private hospital cover, you’ll pay an additional surcharge of 1% to 1.5% of your taxable income. For a high-earning professional, this can easily exceed $2,000 — often more than the cost of basic hospital cover.
What to Prepare Before Lodging
To ensure your 2025-26 return is accurate and maximises your refund, gather these documents before visiting your tax agent:
- Income statement (formerly payment summary) from your employer — available via myGov from mid-July
- Bank interest statements and dividend statements
- Private health insurance statement
- Rental property income and expense records (including depreciation schedule)
- Work-related expense receipts and records
- Home office hours log (if claiming WFH deductions)
- Vehicle logbook (if claiming motor vehicle expenses)
- Cryptocurrency transaction records
- Details of any side income (gig economy, freelance, cash jobs)
Lodge with Confidence
Tax law changes every year. What was deductible last year may have changed. What you could claim under one method may no longer apply. Working with a registered tax agent and CPA ensures your return is accurate, compliant, and optimised.
At Tax Serve in North Lakes, we lodge tax returns for individuals and businesses across Brisbane’s north — from Petrie to Kallangur and beyond. Our business accounting packages include year-round tax advice, not just a once-a-year lodgement.
Contact Tax Serve today to book your 2025-26 tax return appointment.