Income Tax Brackets Australia 2026-27
The full income tax brackets Australia uses for residents in 2026–27 — including the new 15% rate that started on 1 July 2026 — with worked examples showing what each salary really pays.
Last updated: July 2026 · Income Tax Rates Act 1986 · Moneysmart (ASIC) · FY 2026–27
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How to Read This Table
Australia taxes personal income on a marginal scale: your income is sliced into brackets, and each slice is taxed at its own rate. Find where your taxable income sits, then read the “Tax on this income” column — it already adds up all the slices below yours, so you can compute your full-year tax in one line. Crossing into a higher bracket never shrinks your take-home pay: the higher rate touches only the dollars above the threshold, never your whole salary.
2026–27 Key Numbers — Residents
Tax-free threshold: $18,200 · Bottom rate: 15% (was 16%) · Top rate: 45% from $190,001
Medicare levy: 2% on top · Low income tax offset: up to $700 if you earn under $66,667
Australian Resident Tax Brackets 2026–27
| Taxable Income | Marginal Rate | Tax on This Income |
|---|---|---|
| 0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 15% | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,020 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,020 + 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,370 + 45c for each $1 over $190,000 |
Resident rates from the Income Tax Rates Act 1986 as in force for 2026–27. Excludes the 2% Medicare levy, the low income tax offset and any HELP/HECS repayments. Foreign residents and working holiday makers use different scales.
Found your bracket? Two things worth checking next
→ Your exact take-home pay — these brackets plus the Medicare levy and offsets, computed for your salary. → How income tax actually works — PAYG withholding, offsets and your tax return, step by step.Understanding Your Tax Bracket
Take a salary of $60,000. The first $18,200 is tax-free. The slice from $18,201 to $45,000 is taxed at 15% ($4,020). The remaining $15,000 sits in the 30% bracket ($4,500). Total: $8,520 before offsets — an effective rate of just 14.2%, even though you’re “in the 30% bracket”. The low income tax offset then trims another $100, and the 2% Medicare levy ($1,200) is added separately.
On $100,000 the same logic gives $4,020 plus 30% of $55,000 — $20,520, an effective rate of 20.5%. This is why a pay rise that “pushes you into a higher bracket” is always worth taking: only the raise itself is taxed at the higher rate, never the salary you already had.
What changed on 1 July 2026: the rate on the $18,201–$45,000 bracket fell from 16% to 15%, cutting up to $268 off every taxpayer’s annual bill. The same bracket is already legislated to fall to 14% on 1 July 2027 — worth another $268 a year. The bracket thresholds themselves did not move, which means inflation quietly pushes more of each pay rise into higher brackets over time (“bracket creep”) — the reason these tables matter at every review.
Frequently Asked Questions
Did I get the 1 July 2026 tax cut automatically?
Yes. Your employer’s payroll uses the ATO’s updated PAYG withholding schedules, so the 15% rate flows into your pay without you doing anything. If your payslip after July 2026 shows the same tax as June, ask payroll whether the new schedules were applied.
Is the $18,200 tax-free threshold per job?
No — it’s per person, per year. If you work two jobs you claim the threshold with one employer only (on your TFN declaration); the second job is taxed from the first dollar. You aren’t losing money — it all reconciles at tax time — but claiming the threshold twice usually ends in a tax bill.
Do these brackets include the Medicare levy?
No. The 2% Medicare levy is calculated separately on your whole taxable income (with relief below $34,027) and added to the tax from this table. Someone on $60,000 pays $8,520 in bracket tax plus $1,200 in Medicare levy. HELP/HECS repayments, if you have a study debt, are a third separate calculation.
I’m not an Australian resident for tax — do these rates apply to me?
No. Foreign residents get no tax-free threshold — tax starts at 30c from the first dollar up to $135,000 — and pay no Medicare levy. Working holiday makers (backpacker visas 417/462) have their own scale starting at 15%. This table is for Australian tax residents only.
📋 Rates verified — Official sources: Income Tax Rates Act 1986 · Moneysmart (ASIC) · Medicare Levy Act 1986
⚠️ This is general information, not financial, tax or legal advice. KnowMyGovt is an independent service with no affiliation with or endorsement by the ATO, the Fair Work Commission or the Australian Government, and is not responsible for decisions you make based on it.
