Finance and tax

Working Australians tax offset from 2027-28

An enacted non-refundable tax offset of up to $250 for eligible Australian resident individuals with net labour income above the tax-free threshold.

Reviewed 30 July 2026Income years From 2027-28

Who can claim

This deduction is available to individuals.

  • You are an Australian resident individual for the income year.
  • Net labour income exceeds the tax-free threshold.

What you cannot claim

  • The offset is not refundable, transferable or carried forward.
  • Partnership and trust business income is not included as the individual's business labour amount for this calculation.
  • The offset does not apply to 2025-26 or 2026-27.

How the amount is worked out

From 2027-28, calculate net labour income under the statutory definition. The offset is the lesser of $250 and the basic income tax that would arise if taxable income consisted only of that net labour income.

Records the ATO expects

  • Labour income schedule
  • Labour deduction schedule
  • Basic income tax calculation

Where this rule comes from

Primary source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49, 2026 — latest compilation). Reviewed 30 July 2026. Covers the From 2027-28 income years.

Next steps