Marginal Tax Rate Australia 2026–27: What Is Your Rate?
CalculatorQuest Editorial Team
Australian Tax & Finance Specialists
Your marginal tax rate is the rate of tax on the next dollar you earn. It decides how much of a raise, bonus, overtime shift or side-hustle dollar you keep. For 2026–27 Australia still uses progressive brackets — with the lower band now at 15% instead of 16%.
Model any salary instantly with the free pay calculator.
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 marginal rates at a glance
| Taxable income | Marginal income tax | + Medicare (typical) |
|---|---|---|
| $0 – $18,200 | 0% | 0–2%* |
| $18,201 – $45,000 | 15% | 17% |
| $45,001 – $135,000 | 30% | 32% |
| $135,001 – $190,000 | 37% | 39% |
| $190,001+ | 45% | 47% |
*Medicare levy has low-income reductions. HECS/HELP and MLS can raise the effective marginal cost of extra income further. Bracket detail: tax brackets 2026–27.
Marginal vs effective rate
At $85,000, your last dollar is taxed at 30% income tax (+2% Medicare = 32% marginal). But income tax + Medicare of about $17,720 on $85,000 is an effective rate near 21%. That gap is why “I got a raise into a higher bracket so I’m worse off” is a myth — you keep more cash overall.
What a $10,000 raise really keeps
| From → To | Marginal tax* | You keep (~) |
|---|---|---|
| $40k → $50k | 15–30% + ML | ~$7,500+ |
| $80k → $90k | 32% | ~$6,800 |
| $130k → $140k | 32–39% | ~$6,300 |
| $190k → $200k | 47% | ~$5,300 |
*Approximate, income tax + Medicare only (no HECS/MLS). Use the calculator for exact figures.
Why marginal rate matters for decisions
- Salary sacrifice: At 30%+ marginal rates, pre-tax super often beats after-tax contributions (15% contributions tax vs your marginal rate).
- Overtime / side income: Extra dollars are taxed at your marginal rate, not your effective rate.
- Investment losses / deductions: Worth more when you are in a higher bracket.