Australian tax brackets 2026-27
The rate on income between $18,201 and $45,000 fell from 16% to 15% on 1 July 2026. Everything else stayed the same.
| Taxable income | Rate on this slice | 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 |
What "marginal" really means
Say you earn $50,000. You do not pay 30% on $50,000. You pay nothing on the first $18,200, then 15% on the next $26,800, then 30% on the last $5,000. Total tax before offsets is $5,520, which is an average rate of 11.0%, not 30%.
Other things that come out of your pay
- Medicare levy — 2% of taxable income, reduced or waived at low incomes.
- Medicare levy surcharge — 1% to 1.5% extra for higher earners without private hospital cover.
- HECS-HELP — from $69,528 for 2026-27, worked out on a marginal scale.
- Low income tax offset — up to $700, which reduces your tax rather than your income.
Common questions
What are the tax brackets for 2026-27?
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. The 2% Medicare levy applies on top for most people.
Did tax rates change on 1 July 2026?
Yes. The second bracket fell from 16% to 15%. Nothing else moved. The tax-free threshold stayed at $18,200 and the other thresholds were unchanged. The saving is up to $268 a year.
What happens on 1 July 2027?
The same bracket drops again, from 15% to 14%. That takes the total saving to roughly $536 a year compared with the 2025-26 settings.
If I move into a higher bracket, is all my income taxed at that rate?
No, and this is the most common misunderstanding in Australian tax. Only the income inside each bracket is taxed at that bracket's rate. A pay rise never leaves you worse off overall.
Source: Australian Taxation Office individual income tax rates, checked 28 July 2026. General information only, not tax advice.