Tax Brackets · Reference

Australian Tax Brackets 2025-26 & 2026-27

The 2025-26 resident tax brackets are unchanged from 2024-25 — but the bigger change is ahead: from 1 July 2026 the second bracket rate drops from 16% to 15%, the first of two legislated cuts. This guide compares both years side by side, with the rates, the savings, and worked examples.

Quick answer

How much tax on $100,000? Estimated income tax is $20,788 plus $2,000 Medicare levy for 2025-26.

After-tax pay: Approximate annual take-home is $77,212 before other adjustments.

With HELP: Repayment amounts depend on HELP thresholds and are calculated separately.

Changing in 2026-27: from 1 July 2026 the 16% bracket falls to 15% — about $268 a year for incomes of $45,000 or more.

2025-26 Resident Tax Brackets

Income Range Tax Rate Tax on This Bracket
$0 – $18,200 0% Nil
$18,201 – $45,000 16% 16c per $1 over $18,200
$45,001 – $135,000 30% $4,288 + 30c per $1 over $45,000
$135,001 – $190,000 37% $31,288 + 37c per $1 over $135,000
$190,001 + 45% $51,638 + 45c per $1 over $190,000

The above rates do not include the 2% Medicare levy. These rates apply to Australian residents for tax purposes.

2025-26 vs 2026-27 tax brackets compared

From 1 July 2026, the second bracket rate falls from 16% to 15% — the first of two legislated cuts (it drops again to 14% from 1 July 2027). The bracket thresholds are unchanged; only the rate on the $18,201–$45,000 band changes.

Income range 2025-26 rate 2026-27 rate
$0 – $18,200 0% 0%
$18,201 – $45,000 16% 15% ↓
$45,001 – $135,000 30% 30%
$135,001 – $190,000 37% 37%
$190,001 + 45% 45%
Income 2025-26 tax 2026-27 tax You save
$30,000 $1,888 $1,770 $118
$45,000 $4,288 $4,020 $268
$80,000 $14,788 $14,520 $268
$150,000 $36,838 $36,570 $268

Tax-Free Threshold

The tax-free threshold remains at $18,200 for Australian residents. Income up to this amount is not subject to income tax. If you earn above $18,200, only the income above the threshold is taxed at progressive rates.

Non-residents do not receive the tax-free threshold and are taxed from the first dollar earned in Australia.

Non-Resident (Foreign Resident) Tax Brackets 2025-26

Foreign residents for tax purposes have no tax-free threshold and are taxed from the first dollar of Australian-sourced income. The Medicare levy does not apply:

Financial year Income range Rate on $18,201–$45,000
2025-26 (current) $18,201 – $45,000 16%
2026-27 (from 1 July 2026) $18,201 – $45,000 15%
2027-28 (from 1 July 2027) $18,201 – $45,000 14%
Income Range Tax Rate
$0 – $135,000 30%
$135,001 – $190,000 37%
$190,001 + 45%

No Medicare levy applies to foreign residents. Working-holiday-makers use a separate schedule (15% on the first $45,000, then resident rates above that). Residency for tax purposes is determined by the ATO's residency tests, not visa type.

Example Tax Calculations

Here's how much tax you'd pay at five common income levels:

Income Tax Calculator Calculate tax on your exact income Pay Calculator Take-home pay with HELP, super, and Medicare Bonus Tax Calculator Why your bonus looks heavily taxed (and what you actually owe)

Medicare Levy

In addition to income tax, Australian residents pay a 2% Medicare levy on their taxable income. This funds the public healthcare system (Medicare).

Low-income earners may qualify for a reduction or exemption. The Medicare levy reduction threshold for singles is $28,011 for 2025-26. Families have a higher threshold based on the number of dependents.

The Medicare Levy Surcharge (MLS) of 1%–1.5% may also apply if you earn over $101,000 (singles) and don't hold private hospital cover. See our Medicare Levy & MLS Calculator.

Stage 3 Tax Cuts

The revised Stage 3 tax cuts took effect on 1 July 2024 and continue for 2025-26. Key changes from the previous rates:

Income Income Tax Medicare (2%) Total Tax Take-Home Effective Rate
$50,000 $5,520 $1,000 $6,520 $43,480 13.0%
$80,000 $14,520 $1,600 $16,120 $63,880 20.2%
$100,000 $20,520 $2,000 $22,520 $77,480 22.5%
$150,000 $36,570 $3,000 $39,570 $110,430 26.4%
$200,000 $55,870 $4,000 $59,870 $140,130 29.9%

Frequently asked questions

What are the Australian tax brackets for 2025-26?
For the 2025-26 financial year, Australian residents pay 0% on income up to $18,200, 16% on $18,201–$45,000, 30% on $45,001–$135,000, 37% on $135,001–$190,000, and 45% on income over $190,000. A 2% Medicare levy also applies.
Are Australian tax brackets changing in 2026?
Yes. From 1 July 2026 (the 2026-27 financial year) the second tax bracket rate falls from 16% to 15%, worth about $268 a year for anyone earning $45,000 or more. A further cut to 14% applies from 1 July 2027. The bracket thresholds themselves are unchanged.
What is the tax-free threshold in Australia?
The tax-free threshold is $18,200. Australian residents earning below this amount pay no income tax. If you earn above $18,200, only the income above this threshold is taxed — the first $18,200 remains tax-free.
Did tax brackets change for 2025-26?
No. The 2025-26 tax brackets are unchanged from 2024-25. The Stage 3 tax cuts that took effect on 1 July 2024 remain in place: the 19% bracket was reduced to 16%, the 32.5% bracket was reduced to 30%, and the 37% bracket threshold was raised from $120,001 to $135,001.
How does the progressive tax system work?
Australia uses a progressive (marginal) tax system. Each bracket's rate applies only to the income within that bracket — not your entire income. For example, someone earning $100,000 pays 0% on the first $18,200, 16% on $18,201–$45,000, and 30% on $45,001–$100,000.
What is the Medicare levy?
The Medicare levy is 2% of your taxable income, payable by all Australian residents regardless of whether they use public healthcare. It is in addition to income tax. Low-income earners below the Medicare levy threshold may be exempt or pay a reduced rate.
What are the Stage 3 tax cuts?
The revised Stage 3 tax cuts took effect on 1 July 2024. Key changes include: the 19% rate reduced to 16%, the 32.5% rate reduced to 30%, and the 37% bracket threshold raised from $120,001 to $135,001. The 45% top rate and $190,000 threshold remain unchanged.
What is the top marginal tax rate in Australia?
The top marginal tax rate is 45%, applying to income over $190,000. Including the 2% Medicare levy, the effective top marginal rate is 47%. High-income earners may also face the Medicare Levy Surcharge (1%–1.5%) if they don't have private health insurance.
Do non-residents pay different tax rates?
Yes. Non-residents do not receive the tax-free threshold and are taxed at 30% from the first dollar up to $135,000, 37% on $135,001–$190,000, and 45% above $190,000. Non-residents do not pay the Medicare levy.
Do foreign residents pay the Medicare levy?
No. Foreign residents for tax purposes are exempt from the 2% Medicare levy. They also receive no tax-free threshold, so all Australian-sourced income is taxed from the first dollar. The Medicare levy applies only to Australian residents — working-holiday-makers should check ATO guidance on their specific residency status for Medicare purposes.
What is the lowest tax rate in 2027-28?
From 1 July 2027, the second income tax bracket rate falls to 14% — the final step of the three-year legislated cut (16% in 2025-26, 15% in 2026-27, and 14% in 2027-28). This applies to income between $18,201 and $45,000. All bracket thresholds remain unchanged.

Calculate your tax

Use our income tax calculator to see exactly how much tax you'll pay on your specific income. Or check the pay calculator for take-home pay with HELP debt and salary sacrifice. To understand the difference between your marginal rate and what you actually pay, see the marginal tax rates guide.

Related tax references

Related calculators

2025-26 vs 2026-27 Tax Changes ATO side-by-side diff: Stage 3+ rate cut (16% → 15%), brackets, Medicare, SG, super caps, HELP, CGT Marginal Tax Rates Australia Your ATO marginal tax rate for 2026-27 and 2025-26 — how each extra $1 is taxed, with the 1 July 2026 cut to 15% and Medicare levy Income Tax Calculator Estimate your 2026-27 income tax Tax Offsets Calculator Estimate LITO, legislated WATO (from 2027-28), and SAPTO, including residency, income and non-refundable tax caps Pay App Compare salary, bonus, HELP, sacrifice and contractor scenarios Reverse Salary Calculator Enter target take-home, get required gross salary. 2025-26 & 2026-27.
Change Before (2023-24) After (2024-25 onwards)
Second bracket rate 19% 16%
Third bracket rate 32.5% 30%
37% bracket starts at $120,001 $135,001
45% bracket starts at $180,001 $190,001

The cut is worth up to $268 a year once you earn $45,000 or more (1% of the full $18,201–$45,000 band). Below $45,000 the saving scales with income:

Income tax only (excludes the 2% Medicare levy), assuming Australian residency for the full year. See the marginal tax rates guide for how these brackets stack with Medicare and offsets.

The second-bracket cut runs across three financial years — all legislated:

The 2027-28 rate is derived from the central tax-year config. All other bracket thresholds ($18,200 / $45,000 / $135,000 / $190,000) are unchanged through 2027-28.