There was a lot of new material in the 2026 Budget.
The Government has announced a number of tax changes that will benefit charities, not-for-profit organisations, and families. Here's what you need to know:
Charities
More flexibility for donation tax credits
From 1 April 2028, people who donate to registered charities will be able to claim their donation tax credits throughout the year instead of waiting until the end of the tax year.
Donors will also be able to choose to have their donation tax credit paid directly to the charity. This could improve cash flow for charities that receive regular donations.
The amount of donations that can qualify for a tax credit will be capped at $100,000 per person, per year, regardless of their income.
What this means for your charity:
These changes may encourage giving and provide an opportunity to discuss donation tax credits with your supporters once the new rules take effect.
Not-for-Profit Organisations:
Members’ subscriptions remain non-taxable
Following concerns raised last year, the Government has confirmed that membership subscriptions will not become taxable income. This provides certainty for clubs, societies, and other membership-based organisations.
Higher tax-exempt income threshold
From 1 April 2027, the tax-exempt threshold for non-profit organisations will increase from $1,000 to $10,000. This means many organisations will be able to earn more non-member income before income tax becomes payable.
New option for paying volunteer honoraria
From 1 April 2028, organisations that pay volunteer honoraria will be able to choose whether to process these payments as salary or wages rather than as schedular payments.
What this means for your organisation:
The higher tax-free threshold will reduce compliance for many smaller organisations, while the new payroll option provides greater flexibility when paying volunteers.
Working for Families:
From 1 April 2027, some of the the Working for Families rules will be simplified by removing several items from the definition of family income. These include:
- deposits into income equalisation schemes
- passive income earned by children
- certain tax-exempt allowances and salaries
- specific superannuation and annuity adjustments.
Another welcome change is the increase in the de minimis threshold for financial support from family members.
Regular contributions—such as grandparents helping with school fees or groceries—will be ignored for Working for Families purposes up to $8,000 per year, up from the current $5,000.
What this means for families:
These changes should make Working for Families easier to understand and may allow more families to qualify for, or receive a higher entitlement, without informal family support affecting their payments.
