Australians are set to take a practical approach to their tax refunds this year, with new Compare the Market research revealing that many are planning to use tax refunds to strengthen their finances rather than splurge on discretionary spending.*

More than a third of Australians surveyed (38.37%) said they intend to put their tax return into savings, making it the most popular use for a refund in 2026.

Others plan to use the money to pay off credit card or Buy Now, Pay Later debt (11.48%), help cover their home loan (10.79%) or offset rising grocery costs (10.40%).

The research also found that many Australians plan to put their refund towards everyday household bills, such as their electricity and gas (8.83%), rent (7.85%) and even insurance costs (6.28%).

Around a third of respondents (34.25%) said they weren’t expecting a tax return this year.

Conversely, it appears the tax time splurge has been purged for many this financial year, with just 7.07% planning to put the money towards a holiday and just 4.02% intending to spend it on shopping or gifts.

Compare the Market spokesperson Sarah Orr said that for many Australians, tax time is about plugging budget leaks, rather than spending on anything aspirational.

“Between higher interest rates, bigger grocery bills and costs climbing across the board, it’s no wonder so many Australians are planning to stash, not splash, their tax refunds this year,” Ms Orr said.

“Whether it’s topping up savings, paying down debt or covering everyday costs, many people seem to have a practical plan for their refund before it even lands in their account.

“Rising costs have pushed plenty of household budgets into the red, so it’s not surprising that many Aussies want to squirrel away their tax return for a rainy day. That’s a smart move, while we’re not out of the woods on the cost-of-living front.

“Many of the price hikes we’ve seen over the past few years are now baked into household budgets, and those costs aren’t simply going to go backwards when inflation eventually eases.”

Ms Orr said Australians could also use tax time as a reminder to review their household expenses and identify other opportunities to save money.

“A tax refund can be a fantastic financial boost, but it’s not the only way Australians can put some extra money back in their pocket,” Ms Orr said.

“If you’re looking to stretch your budget further, now is a great time to review your regular expenses. Many people stay with the same insurer, energy retailer or lender for years without checking whether a better deal is available.

“It might not be as exciting as getting a tax refund, but regularly comparing your bills could potentially deliver savings year-round.

“Because why should you pay more when you can get the same thing for less somewhere else? A few hundred dollars saved on insurance, energy or interest costs can make a real difference when household budgets are under pressure.”

How Australians plan to spend their upcoming tax refund

*Compare the Market commissioned PureProfile to survey 1,019 18+ aged Australian adults, conducted June 2026. Multiple-choice questionnaire.