In the 2026–27 Budget, the Australian Government announced a new non-refundable tax offset, called the Working Australians tax offset (WATO), for Australian resident individuals who earn labour income.
This measure is now law.
The WATO is available from the 2027–28 income year for individuals who:
- are Australian residents for tax purposes during that income year
- have net labour income (labour amounts less labour deductions) which exceeds the tax-free threshold.
The WATO provides a maximum benefit of $250 for eligible individuals if their income tax payable on their net labour income is above $250.
The WATO is a non-refundable tax offset, which means it can only reduce an individual's tax payable to nil. Any unused amount will not be refunded and it cannot be transferred or carried forward.
For more information, see: