Australia Tax Brackets 2026-27
For 2026-27, Australian income tax brackets run from 0% (first $18,200 tax-free) to 45% above $190,000. The Stage 3 restructure — now in its third year — cut the 19% and 32.5% rates to 16% and 30%.
Verified against ATO — Income tax rates for Australian residents (ato.gov.au). Reviewed by Bivatshu Paneru, ASA (CPA Australia).
Australia · 2026-27 · Summary
In Australia for the 2026-27 income year, resident income tax uses five brackets. The first $18,200 is tax-free. From $18,201 to $45,000 the rate is 16%; $45,001 to $135,000 is 30%; $135,001 to $190,000 is 37%; and income above $190,000 is taxed at 45%. On top of income tax, most residents pay a 2% Medicare Levy. The Low Income Tax Offset (LITO) provides up to $700 in relief for earners below $66,667.
2026-27 Australia income tax brackets
| Taxable income | Rate | Cumulative tax |
|---|---|---|
| Up to $18,200 | 0% | $0 |
| $18,200 – $45,000 | 16% | $4,288 |
| $45,000 – $135,000 | 30% | $31,288 |
| $135,000 – $190,000 | 37% | $51,638 |
| Over $190,000 | 45% | — |
Income tax brackets only. Low Income Tax Offset (LITO), Medicare Levy, and Medicare Levy Surcharge are shown separately in the breakdown. Source: ATO ato.gov.au.
Are Australia tax brackets changing in 2026-27?
The 2026-27 income tax brackets are unchanged from 2025-26. The Stage 3 restructure came into effect 1 July 2024 and continues. The Medicare Levy low-income threshold rose to $26,000 (from $25,444). MLS thresholds for singles remain at $93,000, $108,000, and $144,000. LITO amounts are unchanged. No major structural changes for 2026-27.
| Threshold / parameter | Previous year | 2026-27 | Change |
|---|---|---|---|
| Tax-free threshold | $18,200 | $18,200 | No change |
| 16% bracket upper | $45,000 | $45,000 | No change |
| 30% bracket upper | $135,000 | $135,000 | No change |
| 37% bracket upper | $190,000 | $190,000 | No change |
| Medicare Levy low-income threshold | $25,444 | $26,000 | +$556 |
| MLS single threshold (1%) | $93,000 | $93,000 | No change |
Australia tax at common income levels (2026-27)
Computed by the Tax Atlas engine from official 2026-27 rates. Default filing status; no additional deductions or credits.
| Gross income | Taxable income | Total tax | Take-home | Eff. rate |
|---|---|---|---|---|
| $30,000 | $30,000 | $1,588 | $28,412 | 5.3% |
| $60,000 | $60,000 | $9,888 | $50,112 | 16.5% |
| $100,000 | $100,000 | $23,788 | $76,212 | 23.8% |
| $150,000 | $150,000 | $42,088 | $107,912 | 28.1% |
| $250,000 | $250,000 | $87,388 | $162,612 | 35.0% |
Step-by-step: $100,000 gross
Use the income tax calculator for a personalised calculation with your exact income, filing status, and deductions.
How Australia tax brackets work
Australian income tax is applied to gross taxable income. The tax-free threshold of $18,200 is built into the first bracket as a 0% rate — there is no separate deduction like the UK personal allowance. From the first dollar above $18,200, the 16% rate applies to income in that band.
The Stage 3 tax cuts, effective 1 July 2024, restructured the brackets significantly. The old 32.5% bracket (on $45,001–$120,000) was split and reduced: incomes $18,201–$45,000 now pay 16%, and $45,001–$135,000 pay 30%. The threshold for the 37% rate was raised and the top 45% threshold remains at $190,000. These rates continue unchanged for 2026-27.
The Low Income Tax Offset (LITO) adds a layer of relief for lower earners — up to $700 for incomes up to $37,500. It phases out at 5¢ per dollar between $37,500 and $45,000 (to $325), then 1.5¢ per dollar between $45,000 and $66,667 (to zero). LITO is applied against income tax only — not the Medicare Levy.
The Medicare Levy (2%) and Medicare Levy Surcharge (1%–1.5% for high earners without private hospital cover) are additional charges. For singles, the MLS applies above $93,000 in income. The surcharge applies to the full income at the applicable tier — not just the amount above the threshold — creating cliff effects at $93,000, $108,000, and $144,000.
Australia tax: key rules and exceptions
The Medicare Levy Surcharge (MLS) creates cliff effects that can make a higher salary result in lower take-home pay for a single year. Without private hospital cover, singles pay 1% MLS above $93,000, 1.25% above $108,000, and 1.5% above $144,000 on their entire income — not just the excess. Crossing $93,001 triggers roughly $930 in additional tax on $93,001 of income, making the zone just above each threshold particularly costly.
HELP/HECS student debt repayments are income-contingent and apply from $54,435 of repayment income. Rates range from 1% at the low end to 10% at incomes above $160,578. These repayments are separate from income tax and are deducted by employers via PAYG withholding — the ATO pre-fills these repayments in your return each year. They are not included in the standard take-home pay calculation.
Superannuation guarantee (SG) is paid by employers on top of salary at 12% for 2026. Employee super guarantee does not interact with income tax brackets — it goes directly to a super fund and is taxed at 15% within the fund, not at your marginal income tax rate. Salary-sacrificing additional super is tax-effective for earners in the 30%+ bracket since contributions are taxed at 15% instead of the marginal rate.
How do tax brackets work? (Common misconception)
A common misconception is that earning more can leave you worse off — that crossing into a higher bracket means more of your income gets taxed at a higher rate. This is not how progressive taxation works.
Each bracket applies only to the income that falls within its range. If your income crosses into a higher bracket, only the amount above the threshold is taxed at the higher rate — not your entire income. A higher salary always means higher take-home pay.
Your marginal rate is the rate on your last dollar earned. Your effective rate is total tax divided by gross income — always lower than your marginal rate. See the marginal tax rate and effective tax rate glossary entries.
Calculate your exact Australia tax
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Frequently asked questions
- What are the 2026-27 Australian income tax brackets?
- 0% on income up to $18,200; 16% on $18,201–$45,000; 30% on $45,001–$135,000; 37% on $135,001–$190,000; 45% above $190,000. Plus 2% Medicare Levy on most incomes. The Low Income Tax Offset provides up to $700 in additional relief for those earning under $66,667.
- What is the Low Income Tax Offset (LITO)?
- LITO is a non-refundable offset (credit) applied against income tax. The full offset of $700 is available for incomes up to $37,500. It phases out at 5¢/dollar between $37,500 and $45,000, and at 1.5¢/dollar between $45,000 and $66,667. LITO only reduces income tax — it does not reduce the Medicare Levy.
- What changed with the Stage 3 tax cuts?
- The Stage 3 tax cuts, effective 1 July 2024, replaced the 32.5% rate with a 16% rate (on $18,201–$45,000) and a 30% rate (on $45,001–$135,000). The previous 19% rate and 32.5% bracket were eliminated. The 37% threshold was lowered from $180,001 to $135,001, affecting more middle-income earners. The top 45% rate threshold remains at $190,000.
- Is superannuation included in the tax brackets?
- No. Your employer's super guarantee (12% in 2026) is paid on top of your salary and does not interact with income tax brackets. Employer super contributions are taxed at 15% in the super fund (not at your income tax rate). Salary-sacrificed personal super contributions are also taxed at 15%, making salary sacrifice attractive for those in the 30%+ brackets.
- When is the Australian income tax year?
- The Australian income year runs from 1 July to 30 June — the 2026-27 income year covers 1 July 2026 to 30 June 2027. Tax returns are due by 31 October 2027 (or later if you use a registered tax agent). The ATO pre-fills returns with income and deduction data from third parties (employers, banks, Super funds).