Resident tax brackets 2026-27
| Taxable income | Marginal rate |
|---|---|
| $0 to $18,200 | 0% |
| $18,200 to $45,000 | 15% |
| $45,000 to $135,000 | 30% |
| $135,000 to $190,000 | 37% |
| Over $190,000 | 45% |
These are the rates for Australian tax residents, before the 2% Medicare levy and before any offsets. The only change from 2025-26 is the second rate: 16% became 15% on 1 July 2026, under legislation that also cuts it to 14% from 1 July 2027. Each step is worth up to $268 a year.
Marginal vs effective rate
- Marginal rate: the rate on your next dollar. It's the bracket your income sits in, plus in practice the 2% Medicare levy.
- Effective (average) rate: total tax divided by total income. Because the first $18,200 is tax-free and each lower band is taxed at its own lower rate, it is always below your marginal rate.
Each rate applies only to the dollars inside its bracket. Move from $134,000 to $136,000 and you don't pay 37% on $136,000: you pay 37% on the $1,000 above the $135,000 threshold, and everything below is taxed exactly as before. A rise from $85,000 to $95,000 keeps $6,800 of the $10,000 after income tax and Medicare levy. Turning down a raise to "stay under the bracket" never makes sense; check any rise with the take-home pay calculator.
Effective tax rates at common salaries, 2026-27
Income tax after the low income tax offset, plus the 2% Medicare levy, for a resident with no HECS debt, computed with the same engine as our calculators:
| Taxable income | Tax + Medicare | Effective rate | Marginal bracket |
|---|---|---|---|
| $45,000 | $4,595 | 10.2% | 15% |
| $60,000 | $9,620 | 16.0% | 30% |
| $80,000 | $16,120 | 20.2% | 30% |
| $100,000 | $22,520 | 22.5% | 30% |
| $135,000 | $33,720 | 25.0% | 30% |
| $160,000 | $43,470 | 27.2% | 37% |
| $190,000 | $55,170 | 29.0% | 37% |
| $250,000 | $83,370 | 33.3% | 45% |
Which rate matters for which decision
- Deductions, salary sacrifice, negative gearing: marginal. Amounts that come off the top of your income save tax at your top rate, which is why the salary sacrifice calculator compares your marginal rate with the 15% contributions tax.
- Overtime or a second job: marginal. The next dollar is taxed at the same marginal rate whichever employer pays it. A second job often has more tax withheld, which comes back at tax time; see does a second job get taxed more?
- Budgeting and comparing years: effective. "How much of my income goes to tax?" is the average rate.
Where the bracket myth has a grain of truth
Brackets never cost you money, but things outside them can make an extra dollar expensive: means-tested payments such as Family Tax Benefit withdraw as income rises, the Medicare levy surcharge switches on at a threshold for people without hospital cover, and above the top HELP threshold the repayment flips to a flat 10% of your whole repayment income (see the HECS thresholds table).
2025-26 brackets (for your last tax return)
| Taxable income | Marginal rate |
|---|---|
| $0 to $18,200 | 0% |
| $18,200 to $45,000 | 16% |
| $45,000 to $135,000 | 30% |
| $135,000 to $190,000 | 37% |
| Over $190,000 | 45% |
Bracket creep
The thresholds ($18,200, $45,000, $135,000, $190,000) are not indexed, so wage growth slowly lifts everyone's average rate even when no law changes. Five years of worked numbers are in our bracket creep guide.
What sits on top of these rates
- Medicare levy: 2% of taxable income for most people, reduced or nil below about $35,000.
- Medicare levy surcharge: an extra 1% to 1.5% for higher earners without private hospital cover (singles from $105,001 in 2026-27).
- HECS/HELP repayments: from $69,528 of repayment income, 15c to 17c per dollar above the threshold. See the 2026-27 HELP thresholds table.
- Offsets: the low income tax offset (up to $700) reduces tax at lower incomes; it phases out entirely by $66,667.
Frequently asked questions
Do these rates apply to non-residents?
No. Foreign residents have no tax-free threshold. In the ATO table for 2025-26 (the latest year it lists) they pay 30c per dollar from the first dollar up to $135,000, 37c to $190,000 and 45c above, and no Medicare levy. Working holiday makers have separate rates. The tables on this page are for Australian tax residents.
Sources
Figures on this page come from the following primary sources. The date is when we last checked the page against the source.
- Tax rates for Australian residents (ATO), checked 27 July 2026.
- Tax rates: foreign residents (ATO), checked 5 October 2026.
- Treasury Laws Amendment (More Cost of Living Relief) Act 2025 (Federal Register of Legislation), checked 27 July 2026.
- Personal income tax: new tax cuts for every Australian taxpayer (ATO), checked 27 July 2026.
- Low income tax offset (ATO), checked 27 July 2026.
- Medicare levy reduction for low-income earners (ATO), checked 27 July 2026.
Related
Tax rates by year: every resident rate table from 2015-16 to 2027-28, with tax on any income in any year.Take-home pay calculator: what a raise is worth after tax, Medicare and HECS. Salary sacrifice calculator: what pre-tax super does to your marginal tax. HECS/HELP repayment calculator: your repayment under the 2026-27 thresholds.
Figures current as at 5 October 2026. Rates verified against the ATO resident tax rates page and the Treasury Laws Amendment (More Cost of Living Relief) Act 2025; see our methodology. General information only, not financial advice.