For FY2026-27 the Australian resident income tax rates are: nil to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000, then 45%. The 2% Medicare levy sits on top. The 16% rate fell to 15% on 1 July 2026, worth up to $268 a year.
How Australian tax brackets actually work
Australia uses a progressive system, and the single most common misunderstanding about it is worth clearing up first: moving into a higher bracket does not tax your whole income at the higher rate. Each rate applies only to the slice of income inside its own band. Someone on $136,000 pays 37% on $1,000 of income, not on $136,000. It is arithmetically impossible for a pay rise to leave you worse off.
Two financial years matter at any given moment, and conflating them is the second most common error. FY2026-27 runs from 1 July 2026 to 30 June 2027 and governs the pay landing in your account today. FY2025-26 ended on 30 June 2026 and is the year covered by the tax return most people are lodging right now. Both tables are below.
Resident tax rates, FY2026-27 (current year)
| Taxable income | Rate | Tax on this income |
|---|---|---|
| $0 to $18,200 | 0% | Nil |
| $18,201 to $45,000 | 15% | 15c for each $1 over $18,200 |
| $45,001 to $135,000 | 30% | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 to $190,000 | 37% | $31,020 plus 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,370 plus 45c for each $1 over $190,000 |
Excludes the 2% Medicare levy. Source: ATO, Tax rates for Australian residents, checked 21 August 2026.
Resident tax rates, FY2025-26 (the year you lodge for now)
If you are filling in a tax return, this is the table that applies to it.
| Taxable income | Rate | Tax on this income |
|---|---|---|
| $0 to $18,200 | 0% | Nil |
| $18,201 to $45,000 | 16% | 16c for each $1 over $18,200 |
| $45,001 to $135,000 | 30% | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 to $190,000 | 37% | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,638 plus 45c for each $1 over $190,000 |
What the 1 July 2026 cut is worth, by income
Only one number changed: the rate on income between $18,200 and $45,000 went from 16c to 15c. That caps the benefit at $268 a year, which is why everyone above $45,000 receives an identical amount and only people earning inside the band receive less.
| Salary | Take-home FY2025-26 | Take-home FY2026-27 | Change a year | Per fortnight |
|---|---|---|---|---|
| $30,000 | $28,613 | $28,731 | +$118 | +$5 |
| $45,000 | $40,137 | $40,405 | +$268 | +$10 |
| $60,000 | $50,112 | $50,380 | +$268 | +$10 |
| $80,000 | $63,612 | $63,880 | +$268 | +$10 |
| $100,000 | $77,212 | $77,480 | +$268 | +$10 |
| $150,000 | $110,162 | $110,430 | +$268 | +$10 |
| $200,000 | $139,862 | $140,130 | +$268 | +$10 |
A second cut, to 14c, is legislated to start on 1 July 2027.
Effective rate versus marginal rate, by salary
The marginal column is the honest one: it includes the 2% Medicare levy, because that is what actually comes out of your next dollar. Notice how wide the 30% band is. A worker on $60,000 and one on $130,000 face exactly the same marginal rate.
| Salary | Income tax | Medicare | Take-home | Effective rate | Marginal on next $1 |
|---|---|---|---|---|---|
| $30,000 | $1,770 | $199 | $28,731 | 4.2% | 25% |
| $45,000 | $4,020 | $900 | $40,405 | 10.2% | 34% |
| $60,000 | $8,520 | $1,200 | $50,380 | 16.0% | 34% |
| $75,000 | $13,020 | $1,500 | $60,480 | 19.4% | 32% |
| $90,000 | $17,520 | $1,800 | $70,680 | 21.5% | 32% |
| $105,000 | $22,020 | $2,100 | $80,880 | 23.0% | 32% |
| $120,000 | $26,520 | $2,400 | $91,080 | 24.1% | 32% |
| $135,000 | $31,020 | $2,700 | $101,280 | 25.0% | 39% |
| $150,000 | $36,570 | $3,000 | $110,430 | 26.4% | 39% |
| $200,000 | $55,870 | $4,000 | $140,130 | 29.9% | 47% |
Single resident, LITO applied where eligible. Excludes HECS/HELP, the Medicare levy surcharge and work deductions.
Medicare levy and the low-income reduction
The Medicare levy is a flat 2% of taxable income, charged separately from the brackets above. It is not simply switched on at a threshold. For singles in FY2026-27 there is no levy at or below $28,011, then it phases in at 10c in the dollar until the full 2% applies from $35,013. Seniors and pensioners entitled to SAPTO have higher thresholds, and family thresholds work differently again.
A separate charge, the Medicare levy surcharge, applies from $105,000 for singles who have no private hospital cover. It runs from 1% to 1.5% depending on income and is on top of the ordinary levy. Full surcharge thresholds and when hospital cover is cheaper.
Source: ATO, Medicare levy reduction for low-income earners, checked 21 August 2026.
Foreign residents and working holiday makers
Foreign residents for tax purposes get no tax-free threshold: the first dollar is taxed at 30c. They also do not pay the Medicare levy, because they are not entitled to Medicare.
| Taxable income | Tax on this income |
|---|---|
| $0 to $135,000 | 30c for each $1 |
| $135,001 to $190,000 | $40,500 plus 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 plus 45c for each $1 over $190,000 |
Working holiday makers on a 417 or 462 visa are taxed at 15c on the first $45,000, then at resident rates above that, and also pay no Medicare levy.
At the date this page was last checked the ATO had published these tables up to FY2025-26 only. The 1 July 2026 change applies to the resident 16% bracket, which does not appear in either scale, so we carry them forward unchanged and say so rather than guessing. Sources: ATO foreign resident rates, ATO working holiday maker rates.
Frequently Asked Questions
What are the Australian income tax brackets for 2026-27?
For FY2026-27: nil up to $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. These rates exclude the 2% Medicare levy.
What changed on 1 July 2026?
The second bracket fell from 16c to 15c in the dollar. Because everyone earns through that band, the benefit is capped at about $268 a year and everyone earning above $45,000 gets the same amount. A further cut to 14c is legislated for 1 July 2027.
Which year do I use for my tax return?
A tax return lodged now covers FY2025-26, which ended on 30 June 2026 and used the older 16% rate. The FY2026-27 rates on this page apply to the income you are earning right now and show up in your pay, not in this year's refund.
What is the tax-free threshold?
$18,200 for Australian residents. You pay no income tax on the first $18,200 you earn in a financial year. Foreign residents do not get it, and working holiday makers have their own rate scale.
What is my effective tax rate versus my marginal rate?
Your marginal rate is what applies to your next dollar of income. Your effective rate is total tax divided by total income, and it is always lower, because the brackets below yours still apply to the income underneath. On $100,000 the marginal rate is 30% but the effective rate is about 20.5% before the Medicare levy.