Australia low income tax offset for 2026–27
This guide explains the ATO’s published low income tax offset amounts, taxable-income bands and non-refundable treatment for Australia’s 2026–27 tax year.
On this page
- 2026–27 maximum
- A$700, subject to taxable income and tax payableATO low income tax offset
An offset against tax payable
The ATO describes LITO as a reduction of tax payable for eligible Australian tax residents. Eligibility depends on taxable income and paying tax on that income. The maximum published offset is A$700. ATO low income tax offset (opens in a new tab).
The ATO-hosted legislation provides entitlement for the 2020–21 income year or a later income year, subject to its conditions. ATO LITO legislation (opens in a new tab).
Maximum amount and first reduction band
At taxable income of A$37,500 or less, the ATO publishes a maximum offset of A$700. Availability of the full reduction remains subject to tax payable because LITO is non-refundable. ATO low income tax offset (opens in a new tab).
For taxable income between A$37,501 and A$45,000, the published amount is A$700 minus 5 cents for each A$1 above A$37,500. ATO low income tax offset (opens in a new tab).
Second reduction band
For taxable income between A$45,001 and A$66,667, the published amount is A$325 minus 1.5 cents for each A$1 above A$45,000. ATO low income tax offset (opens in a new tab).
The ATO-hosted legislation sets the taxable-income condition as not exceeding A$66,667. That condition does not make the full maximum offset available at every income in the band. ATO LITO legislation (opens in a new tab).
Assessment and refund boundaries
The ATO works out LITO after a tax return is lodged; a separate claim is not required. The amount appears on the notice of assessment under non-refundable tax offsets. ATO low income tax offset (opens in a new tab).
The offset can reduce tax payable only to A$0. It is not a separate payment and an unused amount cannot be refunded. ATO low income tax offset (opens in a new tab).
Calculator scope
The published LITO amounts depend on taxable income. The ATO applies the offset through assessment of the tax return. ATO low income tax offset (opens in a new tab).
This guide explains the published LITO amounts for 2026–27; the same amounts applied for 2025–26. This general explanation does not calculate LITO, other offsets, deductions, Medicare levy, final tax or a refund. The income-tax calculator estimates base income tax and excludes LITO; its result is not an offset-adjusted liability.