Tax Brackets Australia 2026-27: Income Tax Rates & Thresholds

Australian Tax Brackets 2026-27 (Residents)

These are the ATO’s resident income tax rates for the 2026-27 income year, 1 July 2026 to 30 June 2027. They apply to your taxable income (assessable income minus deductions) if you were an Australian resident for tax purposes all year and are entitled to the full nil-rate band. How that first bracket works, and who can claim it with their employer, is explained on the what is the tax-free threshold page.

Each rate applies only to the slice of income inside its band. The dollar amount in each row (for example $4,020) is the total tax on every band below it, so you can work out tax on any income as that amount plus the rate times the income over the threshold. The tax-free threshold is the nil band at the top of the table; it has been $18,200 since 2012.

Tax Brackets 2026-27 vs 2025-26: Side by Side

The thresholds are identical in both years. Only the second rate moved, from 16% to 15%, which lowers the base amount in every row above it by $268. Use the 2025-26 column for the tax return you lodge in 2026 (the tax return calculator does this for you) and the 2026-27 column for this year’s pay.

Tax on common incomes: 2025-26 vs 2026-27

The figures are income tax after the low income tax offset, before the Medicare levy. For earlier years back to 2019-20 see tax bracket history.

How Much Tax at Each Threshold

The table below shows the most income tax you can pay inside each bracket, and the running total at the top of it. The figures are income tax only, before offsets and the Medicare levy.

Marginal Tax Rate vs Average Tax Rate

Your marginal tax rate is the rate on your next dollar of income: the rate of the bracket your taxable income finishes in. Your average tax rate (often called the effective tax rate) is your total tax divided by your total income. Because the lower bands are taxed at lower rates, the average is always below the marginal rate. On $90,000 the marginal rate is 30%, but the average income tax rate is only 19.5%.

The marginal rate is the one that matters for decisions at the edge: what you keep from overtime, a pay rise or a bonus, and what a deduction or salary sacrifice saves you. Moving into a higher bracket never reduces your take-home pay, because only the dollars above the threshold are taxed at the higher rate.

The real marginal rate: LITO withdrawal and Medicare shading

The bracket rate is not always what the next dollar costs. Two things push the true (effective) marginal rate above it for lower incomes:

• LITO withdrawal. The low income tax offset shrinks by 5c per dollar between $37,500 and $45,000, and by 1.5c per dollar up to $66,667. So a dollar earned at $40,000 costs 15% + 5c + 2c Medicare = 22%, and at $50,000 it costs 33.5%.
• Medicare levy shade-in. Between $28,011 and $35,013 the levy phases in at 10c per dollar instead of 2c (singles, 2025-26 thresholds, the latest the ATO has published).

Resident, 2026-27 rates, single, no HELP debt, no Medicare levy surcharge. A highlighted figure means the next $1,000 costs more than the bracket rate plus Medicare. Below $22,866 the next $1,000 can cost nothing because LITO absorbs the tax.

Tax on Common Salaries

Income tax plus Medicare levy for 2026-27. Each link opens the full breakdown for that salary, with weekly, fortnightly and monthly figures. Between the round numbers, Tax on $75,000 in Australia covers the most-searched mid-scale salary. If you are paid by the hour, the Hourly to Annual Salary Calculator turns your rate into the annual figure to look up here.

• Tax on $40,000$3,495
• Tax on $50,000$6,270
• Tax on $60,000$9,620
• Tax on $70,000$12,920
• Tax on $80,000$16,120
• Tax on $90,000$19,320
• Tax on $100,000$22,520
• Tax on $110,000$25,720
• Tax on $120,000$28,920
• Tax on $130,000$32,120
• Tax on $140,000$35,670
• Tax on $150,000$39,570
• Tax on $160,000$43,470
• Tax on $180,000$51,270
• Tax on $200,000$59,870

Tax on every salary from $20,000 to $500,000 →

Non-Resident and Working Holiday Maker Tax Rates

Foreign residents and working holiday makers use different scales: no tax-free threshold, no low income tax offset and no Medicare levy. Residency for tax purposes is not the same as visa status, so check the non-resident tax guide if you’re unsure which applies.

Foreign resident tax rates

The ATO’s foreign-resident page currently shows these rates for 2025-26. The 1 July 2026 cut applied only to the resident second band, which foreign residents don’t have, and the ATO’s foreign-resident withholding scale for 2026-27 is unchanged.

Working holiday maker tax rates (visa 417 and 462)

This is the latest working holiday maker table published by the ATO, for 2026-27. See working holiday tax for how employers register to withhold at these rates.

Medicare Levy and What the Brackets Don’t Include

The ATO’s rates do not include the Medicare levy. Residents pay an extra 2% of their whole taxable income (less or nil on a low income, as below, or with a Medicare levy exemption), which is why the table above shows each rate with 2 points added. Other amounts that sit outside the brackets:

• Medicare levy: nil for a single person up to $28,011, shading in to the full 2% at $35,013 (2025-26 thresholds, the latest the ATO has published).
• Medicare levy surcharge: 1% to 1.5% more for singles whose income for surcharge purposes is over $105,000 and who have no private hospital cover (2026-27 tiers). That makes the top rate 48.5% for someone uninsured.
• HELP and other study loans: compulsory repayments are collected with your tax but are a separate calculation on repayment income.
• Tax offsets such as the low income tax offset and SAPTO reduce the tax the brackets produce, dollar for dollar.

What Changed From 2025-26 to 2026-27

• Second rate cut from 16% to 15% on income from $18,201 to $45,000, from 1 July 2026. Anyone earning over $45,000 saves $268 a year; below that the saving is 1c per dollar over $18,200.
• Thresholds unchanged: $18,200, $45,000, $135,000 and $190,000, as they have been since 1 July 2024.
• Base amounts fell to $4,020, $31,020 and $51,370 (from $4,288, $31,288 and $51,638).
• No-tax point with LITO rose from $22,575 to $22,866, because $700 of offset now covers more income at 15%.
• PAYG withholding: new ATO tax tables apply to pay from 1 July 2026, so the cut shows up in each pay rather than waiting for your return. Check yours with the tax withheld calculator or the PAYG withholding tables.

More detail, including super and HELP changes, is in tax changes 2026-27.

Tax Brackets 2027-28: The Legislated Cut to 14%

The second cut is already law. The Treasury Laws Amendment (More Cost of Living Relief) Act 2025 (Act No. 28 of 2025, assented 27 March 2025) reduces the 15% rate to 14% from 1 July 2027. The thresholds stay where they are. The ATO’s rate table doesn’t show 2027-28 yet, so the base amounts below are worked out from the legislated rate.

Compared with 2026-27, anyone earning over $45,000 saves another $268 a year, and the no-tax point with LITO rises to $23,200. Tax at the top of each band will be $3,752, $30,752, $51,102.

A separate law, the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (assented 26 June 2026), adds a new offset on top of the rate cut. The Working Australians Tax Offset takes up to $250 off your tax from 2027-28, alongside LITO, so the saving for a low or middle earner is larger than the bracket table alone shows. It is non-refundable: it can reduce your tax to nil, and any unused amount is not paid to you. The date it starts, and every other dated change, is on the pay and tax changes calendar.

Tax Brackets FAQ