What are the Australian tax brackets for 2026-27?

0% on the first $18,200; 15% 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 for most residents.

What changed from 2025-26 to 2026-27?

The lower taxable bracket rate fell from 16% to 15% on income between $18,201 and $45,000. Other bracket thresholds stayed the same.

Do I pay 45% on all my income if I earn over $190,000?

No. Only the amount above $190,000 is taxed at 45%. Income in lower brackets is still taxed at 0%, 15%, 30% and 37%.

When do the 2026-27 tax rates apply?

The 2026-27 financial year runs from 1 July 2026 to 30 June 2027.

Australian Tax Brackets Explained 2026–27

CalculatorQuest Editorial Team

Australian Tax & Finance Specialists

Australian Tax & FinancePublished July 20269 min readEditorial standards ↗

Updated July 2026: Tax figures reflect 2026-27 ATO rates (lower bracket reduced from 16% to 15%). Calculate your exact take-home pay →

Infographic title card for Australian tax brackets 2026-27 with 15 percent lower rate

Australia's income tax system is progressive: you pay a higher rate only on the slice of income that falls into each bracket. For 2026–27 the headline change is simple but valuable — the lower bracket rate dropped from 16% to 15% on income between $18,201 and $45,000. This guide walks through every band, shows how tax is calculated, and links to free tools so you can model your own salary.

Prefer an instant answer? Use our Australian pay calculator (2026–27 rates built in) or compare take-home pay across incomes in the salary after tax hub.

Australian income tax brackets 2026–27

Progressive rates: you only pay each rate on income inside that band. Lower bracket is 15% from 1 July 2026 (was 16% in 2025–26).

2026–27 tax brackets and rates

Taxable income	Rate	Tax on this band
$0 – $18,200	0%	Nil (tax-free threshold)
$18,201 – $45,000	15%	15c for each $1 over $18,200
$45,001 – $135,000	30%	$4,020 + 30c for each $1 over $45,000
$135,001 – $190,000	37%	$31,020 + 37c for each $1 over $135,000
$190,001+	45%	$51,370 + 45c for each $1 over $190,000

Figures are resident income tax rates for 2026–27. Most people also pay a 2% Medicare levy. The Medicare Levy Surcharge may apply above $93,000 without private hospital cover.

What changed vs 2025–26?

Bracket boundaries are unchanged. The only rate change is the lower band: $18,201–$45,000 is taxed at 15% instead of 16%. That saves up to $268 a year for anyone earning $45,000 or more (26,800 × 1%). Higher brackets (30%, 37%, 45%) are the same as 2025–26. For historical detail see our 2025–26 tax brackets guide.

Worked example: $85,000 salary

At $85,000 (near the average full-time wage), income tax is calculated as:

$0 – $18,200 → $0
$18,201 – $45,000 → $26,800 × 15% = $4,020
$45,001 – $85,000 → $40,000 × 30% = $12,000
Income tax before offsets ≈ $16,020
Medicare levy 2% ≈ $1,700

Take-home pay is about $67,280/year before HECS. Full breakdown: $85,000 salary after tax.

Tax-free threshold and LITO

Residents pay no income tax on the first $18,200. The Low Income Tax Offset (LITO) can further reduce tax for lower incomes (maximum $700, phasing out between $37,500 and $66,667). LITO does not change the published bracket rates — it reduces your final tax bill. More detail: tax-free threshold explained.

Marginal vs effective rate

Your marginal rate is the tax on your next dollar. Your effective rate is total tax ÷ total income. At $85,000 your marginal rate is 30% (32% with Medicare) but your effective rate is closer to 21%. Read the full guide: marginal tax rate Australia 2026–27.