2026–27 Tax Brackets (Current)
Australia uses a progressive tax system. You don't pay one flat rate on all your income — you pay increasing rates on each portion above each threshold. The tax-free threshold means your first $18,200 is always tax-free. These are the rates that apply to income you earn from 1 July 2026.
| Taxable Income | Tax Rate | Tax on This Bracket |
|---|---|---|
| $0 – $18,200 | Nil | $0 |
| $18,201 – $45,000 | 15c per $1 over $18,200 | $4,020 |
| $45,001 – $135,000 | 30c per $1 over $45,000 | $27,000 |
| $135,001 – $190,000 | 37c per $1 over $135,000 | $20,350 |
| $190,001+ | 45c per $1 over $190,000 | — |
2025–26 Brackets — the Return You're Lodging Now
If you're lodging your 2025–26 tax return (due 31 October 2026 for self-lodgers), that return uses last year's rates — the second bracket was 16%, not 15%.
| Taxable Income (2025–26) | Tax Rate | Tax on This Bracket |
|---|---|---|
| $0 – $18,200 | Nil | $0 |
| $18,201 – $45,000 | 16c per $1 over $18,200 | $4,288 |
| $45,001 – $135,000 | 30c per $1 over $45,000 | $27,000 |
| $135,001 – $190,000 | 37c per $1 over $135,000 | $20,350 |
| $190,001+ | 45c per $1 over $190,000 | — |
What Changed
On 1 July 2026 the rate on income between $18,201 and $45,000 dropped from 16% to 15% — worth up to $268 a year. A further legislated cut takes it to 14% from 1 July 2027. The bracket thresholds themselves are unchanged since the Stage 3 tax cuts of 1 July 2024, which replaced the old 32.5% bracket with a 30% rate, moved the 37% bracket start from $120,001 to $135,001, and cut the 19% rate to 16%.
How the Progressive System Works
If you earn $90,000, you don't pay 30% on the whole amount. You pay nothing on the first $18,200, then 15% on the next $26,800 ($4,020), then 30% on the remaining $45,000 ($13,500). Total: $17,520 — an effective rate of 19.5%, not 30%.
This is before Medicare levy (2%) and any offsets like LITO. Your actual take-home depends on your full tax situation.
Frequently Asked Questions
What is the tax-free threshold?
The first $18,200 you earn each financial year is tax-free. You don't need to do anything special to claim it — just make sure you've ticked 'yes' to claiming the tax-free threshold on your TFN declaration with your employer.
How much tax do I pay on $100,000?
On a $100,000 salary in 2026–27, your income tax is $20,520 (before Medicare levy). That's an effective tax rate of 20.5%. Add 2% Medicare levy ($2,000) and your total is $22,520.
Did tax rates change in 2026?
Yes. On 1 July 2026 the rate on income between $18,201 and $45,000 dropped from 16% to 15%. A further cut to 14% is legislated for 1 July 2027. If you're lodging your 2025–26 return now, that return still uses the old 16% rate.
What's the highest tax bracket?
The top marginal rate is 45 cents per dollar on income above $190,000. With 2% Medicare levy, the effective top rate is 47%.