Australia Tax Brackets 2026-27 | Tax Atlas
Verified against ATO — Income tax rates for Australian residents (ato.gov.au). Reviewed by Bivatshu Paneru, ASA (CPA Australia).
Australia · 2026-27 · Quick answer
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
| Rate | Taxable income |
|---|---|
| 0% | Up to $18,200 |
| 16% | $18,200 – $45,000 |
| 30% | $45,000 – $135,000 |
| 37% | $135,000 – $190,000 |
| 45% | Over $190,000 |
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.
How Australia tax brackets work in 2026-27
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.
What changed from the previous year
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.
Cumulative tax at common income levels
Computed from the Tax Atlas engine using the default filing status.
| Gross income | Total tax | Take-home | Eff. rate | Marginal |
|---|---|---|---|---|
| $18,200 | $0 | $18,200 | 0.0% | 0% |
| $31,600 | $2,004 | $29,596 | 6.3% | 26% |
| $45,000 | $4,863 | $40,137 | 10.8% | 34% |
| $90,000 | $19,588 | $70,412 | 21.8% | 32% |
| $135,000 | $35,676 | $99,325 | 26.4% | 40% |
| $162,500 | $47,151 | $115,350 | 29.0% | 41% |
| $190,000 | $58,288 | $131,712 | 30.7% | 49% |
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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).