What Are the 20 Legal Ways to Minimise Your Tax in 2026-27?

Nobody enjoys paying more tax than they have to, and you don't need to. Australian tax law is full of deductions, offsets and concessions the ATO expects you to use. Here are 20 completely legal ways employees and sole traders can cut their tax bill in 2026-27 and beyond.

Why This Matters

The 2026-27 year brings real changes: the tax rate on income between $18,201 and $45,000 drops from 16% to 15% (then 14% from July 2027), a new $1,000 instant work deduction removes the need for receipts on small claims, the concessional super cap rises to $32,500, and the $20,000 instant asset write-off is now permanent. Most of these opportunities only work if you act during the year, not when you lodge your return.

Who This Applies To

These strategies are for individual Australian resident taxpayers: employees, sole traders with an ABN, and people who are both. Companies and trusts follow different rules, so ask us about those separately.

The 20 Ways

Superannuation Strategies

1. Salary sacrifice or deduct super contributions. Before-tax contributions are taxed at 15% instead of your marginal rate, up to the $32,500 cap. Sole traders must lodge a notice of intent with their fund.
2. Use carry-forward caps. If your super balance is under $500,000, unused caps from the past five years can top up this year's, ideal after a big capital gain.
3. Government co-contribution. Earn under about $47,000, contribute $1,000 after tax, and receive up to $500 from the government.
4. Spouse contribution offset. Contribute $3,000 to a low-earning spouse's super and claim up to $540 off your tax.
5. Split super and income with your spouse. Transfer contributions to your spouse's fund and hold investments in the lower earner's name.
6. First Home Super Saver. Save a deposit inside super at 15% tax, up to $15,000 a year and $50,000 in total.

Work-Related Deductions

1. The new $1,000 instant deduction. From 1 July 2026, employees can claim $1,000 with no receipts, or actual expenses if they're higher.
2. Working from home. Claim 70 cents per hour or actual costs. Keep a record of your hours all year.
3. Car and travel. Choose between cents-per-kilometre and the logbook method, whichever gives more.
4. Self-education. Courses and conferences that build skills for your current work are deductible.
5. Income protection insurance. Premiums held outside super are fully deductible.
6. FBT-free electric vehicle. Salary-package an eligible EV under $91,387 before 1 April 2027 to lock in the full exemption.

Investment and Timing Strategies

1. The 50% CGT discount. Hold assets more than 12 months and only half the gain is taxed. Time sales for lower-income years.
2. Negative gearing. Interest and costs on income-producing investments are deductible against your other income.
3. Prepay expenses. Prepay up to 12 months of deductible costs, like investment loan interest, before 30 June.
4. Donations. Gifts of $2 or more to registered charities (DGRs) are deductible.
5. Private health insurance. Basic hospital cover can cost less than the 1 to 1.5% Medicare Levy Surcharge if you earn over the threshold.

Sole Trader Strategies

1. $20,000 instant asset write-off. Now permanent. Deduct each business asset under $20,000 in full, in the year you start using it.
2. Small business income tax offset. An automatic offset worth up to $1,000, being 16% of the tax on your business income.
3. Time income and expenses. Defer late-June invoices into July and bring forward deductible costs into June.

Not sure which of these 20 apply to you? OzLedger can build your personal tax plan before 30 June, so you use the strategies that actually fit your income.

Common Mistakes to Avoid

• Claiming without records. Beyond the $1,000 standard deduction, the ATO still expects receipts, logbooks and diaries.
• Missing the notice of intent. Skip this form and sole traders lose the super deduction entirely.
• Leaving super too late. Contributions count when the fund receives them, so pay by mid-June.
• Doubling up. You can't claim the $1,000 instant deduction plus individual work expenses.
• Claiming the commute. Home-to-work travel is private, never deductible.

A Practical Example

Priya earns $70,000 as an employee plus $25,000 net from freelancing as a sole trader. Before 30 June she salary-sacrifices $5,000 into super (saving about $800), writes off a $3,500 business laptop instantly (about $700), claims 640 working-from-home hours ($448 deduction) and defers a $4,000 invoice into July. With the automatic small business offset on top, she saves or defers roughly $2,700, all using the ATO's own rules.

Australian tax law is full of deductions, offsets and concessions the ATO expects you to use.

Key Takeaways