Budget 2026 — Household Impact Calculator
See exactly how much better or worse off your household will be under the 2026–27 Federal Budget. Tax cuts, HECS relief, and Division 296 super tax — all in one number.
Your Household
| Item | 2025–26 | 2026–27 | Change |
|---|---|---|---|
| Enter your details and press Calculate My Impact | |||
How the Budget 2026 changes work
The 2026–27 Federal Budget contains three main financial changes that affect different Australians in different ways. This calculator adds them all up for your specific household so you can see the net result.
1. Income tax cut (everyone earning over $18,200)
The government has reduced the tax rate on income between $18,201 and $45,000 from 16% to 15%. This sounds small, but it applies to a large slice of income. The maximum saving is $268 per year for anyone earning $45,001 or above. The saving phases in proportionally for incomes between $18,201 and $45,000.
This is on top of the Stage 3 tax cuts already legislated and in effect for 2024–25 and 2025–26.
2. HECS-HELP 20% debt reduction (from 1 June 2025)
The most impactful measure for younger Australians: all outstanding HECS-HELP debts will be reduced by 20% on 1 June 2025. A $50,000 debt becomes $40,000 overnight. This is a one-off reduction applied automatically — no application required.
The new repayment threshold for 2026–27 has also been moved to $67,000, meaning those earning below this no longer make compulsory repayments. The repayment rates have been restructured to a marginal model — you only pay on income above the threshold, not your full income.
3. Division 296 super tax (from 1 July 2026)
For the roughly 80,000 Australians with super balances above $3 million, a new 15% additional tax applies to super fund earnings attributable to the balance above $3M. Currently super earnings are taxed at 15% in accumulation; above $3M this effectively becomes 30%.
Critically, this tax applies to unrealised gains — notional increases in value even if assets haven't been sold. The calculator estimates Division 296 liability using a 7% assumed annual return on the balance above $3M.
Frequently asked questions
Does the HECS reduction happen automatically?
Yes. The Australian Taxation Office will automatically reduce all outstanding HECS-HELP, VSL, SSL and other income-contingent loan balances by 20% on 1 June 2025. You don't need to contact the ATO, your university or any other body. The new balance will appear in your myGov account.
What if I made a voluntary HECS repayment recently?
The government has indicated that voluntary repayments made after 1 June 2023 will receive a partial benefit — the intent is to avoid penalising people who paid down debt. Check the ATO's website for the exact terms as they are still being finalised.
Will the Division 296 tax affect my SMSFs?
Yes. Division 296 applies to all super fund structures, including SMSFs. For defined benefit funds, a modified valuation formula is used. If your total super balance is below $3M across all funds, you are not affected.
Is the tax saving the same for everyone earning over $45K?
Yes — anyone earning $45,001 or more receives the full $268 per year saving ($5.15 per week). The saving cannot be larger than this because the rate change only applies to the $18,201–$45,000 income band, which is a $26,800 range at 1 percentage point = $268.
How accurate is this calculator?
The tax calculation uses legislated 2025–26 rates and the announced 2026–27 rate change. HECS repayment rates for 2026–27 are based on the Budget announcement and are indicative — exact rates are subject to legislation. Division 296 is an estimate using a 7% assumed return. Always verify with a registered tax agent for your specific situation.
Does this include the Medicare Levy?
The Medicare Levy (2% of taxable income) is included in both the 2025–26 and 2026–27 calculations. The Medicare Levy Surcharge for high earners without private health cover is not included — use our Medicare Levy calculator for that.