Payroll changes australia 2026-27 took effect July 1. If your system still runs 2025-26 settings, you're bleeding compliance with every pay run. Four updates. One hard deadline. Here's exactly what to action, ranked by urgency.
- Updated ATO Schedule 1 PAYG withholding tables — load immediately for all pay runs from 1 July.
- Super Guarantee holds at 12% — no increase, but confirm software calculates on OTE only.
- Minimum wage up from 1 July — Fair Work Commission's 2026 Annual Wage Review applies now, not next cycle.
- STP Phase 2 mandatory for all — every transitional deferral has expired. Disaggregate or face penalties.
PAYG Withholding: The Table You're Probably Still Getting Wrong
The ATO drops fresh Schedule 1 tables every July. Most small business owners configure them once and forget. That's how you end up withholding 2025-26 amounts six months into the new financial year without realising.
The 2026-27 tables reflect updated tax thresholds and revised Medicare levy low-income thresholds. Our PAYG withholding tax tables 2026-27 changes guide breaks down the specifics — but the mandate is simple: load the new tables, don't carry over last year's figures.
⚠ Using the wrong withholding table triggers ATO underpayment notices — and lands your employees with surprise tax bills at lodgement. Neither ends well.
| Pay Frequency | Action Required |
|---|---|
| Weekly | Load ATO 2026-27 weekly tax table (NAT 1008) |
| Fortnightly | Load ATO 2026-27 fortnightly tax table (NAT 1006) |
| Monthly | Load ATO 2026-27 monthly tax table (NAT 1007) |
Manual calculations or payslip generators must reference 2026-27 rates. Our guide to reading ATO Schedule 1 for 2025-26 explains the mechanics — the logic holds, only the figures change. Verify the Medicare levy threshold for 2026 too; it affects withholding for lower-income staff.
Super, Minimum Wage & STP2: Three More Things to Check
The SG rate hit its legislative ceiling of 12% in 2025-26 and stays there for 2026-27. No increase scheduled. What you must check: your payroll software calculates super on Ordinary Time Earnings (OTE) only — not overtime, not dangerous work allowances. See how the 12% SG rate displays on payslips and what's defined as OTE under 2026 super rules for employers.
The Fair Work Commission's 2026 Annual Wage Review decision took effect 1 July. Award minimum rates changed immediately — not next pay cycle, not next month. Underpayment claims are expensive and entirely avoidable. Pull the FWC's modern award pay guides for your industry and update payroll records before your next run.
Every transitional deferral the ATO granted has expired. STP2 demands disaggregated income reporting — salary, allowances, leave, bonuses — split by type per pay event, not lumped together. If your software wasn't STP2-ready and you've been hiding behind a deferral, you're now reporting incorrectly. Our STP Phase 2 guide for small business shows exactly what disaggregation looks like in practice.
“Take Ben — a composite of Melbourne café owners we know, four staff. He'd cruised on an STP1 deferral since 2024, assuming it auto-renewed. It didn't. His first July pay run submitted lump-sum data. ATO correspondence followed. Two-hour software fix. Months of stress. Don't be Ben.
All four changes must appear on payslips from 1 July 2026 — updated PAYG withholding, verified 12% super on OTE, current Award minimums, and STP2-compliant income reporting.
The Fair Work Act mandates payslips within one working day of each pay day. They must display the pay period, gross pay, PAYG withheld, and super contributions. Wrong amounts expose you to simultaneous ATO and Fair Work compliance action. See the full Fair Work payslip requirements for 2026.
Four payroll changes. One deadline: 1 July 2026. If your first pay run of the new financial year used stale PAYG tables, pre-increase Award rates, or STP1-format reporting, correct it immediately — not at year-end. Super at 12% is the only constant, but it still needs verification. Fix it in July, skip the ATO correspondence that hits in September.
Frequently Asked Questions
Has the super guarantee rate changed for 2026-27?
No. The Super Guarantee rate holds at 12% for 2026-27. It reached its final legislated level in 2025-26 and remains frozen there under current law.
When do new PAYG withholding tables apply?
The updated ATO Schedule 1 withholding tables apply from 1 July 2026. Use the 2026-27 tables for every pay run processed on or after that date — regardless of when the work was performed.
Is STP Phase 2 mandatory for all employers now?
Yes. All transitional deferrals have ended. Every Australian employer must now submit disaggregated pay event data — separating salary, allowances, leave, and other income types — to the ATO via STP2-compliant software.
Do I need to issue new payslips for the minimum wage increase?
Any pay run processed on or after 1 July 2026 must reflect the updated Award minimum rates. You don't reissue prior payslips, but you cannot continue paying old rates — even temporarily. Check the FWC's modern award pay guides for your industry.
Four changes. One July deadline. Update now, or spend September explaining yourself to the ATO.
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Four payroll changes hit simultaneously on 1 July 2026: a 3.5% Award wage increase, updated PAYG withholding scales, the super guarantee locked at 12%, and STP Phase 2 now mandatory for every employer — no exceptions.
Miss any one of them and you risk ATO penalties, underpayment liability, or STP lodgement failures. Update your payroll software, recheck employee withholding declarations, and confirm your accounting system is submitting disaggregated STP2 data before your first July pay run.
Shawn Martinez, CPA
Senior Tax Accountant
Shawn Martinez is a Certified Public Accountant with over 12 years of experience in Australian taxation and payroll compliance. He specializes in PAYG withholding, superannuation regulations, and ATO compliance for small to medium businesses.
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