2026–27 tax brackets and rates
Australia taxes income progressively: the rate rises as income rises, but each rate applies only to the slice of income inside its bracket — never to your whole income. These are the resident rates for the 2026–27 income year (1 July 2026 to 30 June 2027), as published by the ATO. They do not include the 2% Medicare levy.
| Taxable income | Tax on this income | Tax at top of bracket |
|---|---|---|
| $0 – $18,200 | Nil | $0 |
| $18,201 – $45,000 | 15c for each $1 over $18,200 | $4,020 |
| $45,001 – $135,000 | $4,020 plus 30c for each $1 over $45,000 | $31,020 |
| $135,001 – $190,000 | $31,020 plus 37c for each $1 over $135,000 | $51,370 |
| $190,001 and over | $51,370 plus 45c for each $1 over $190,000 | — |
What changed in 2026–27
Only one rate moved: the second bracket fell from 16% to 15% on 1 July 2026, under the Treasury Laws Amendment (More Cost of Living Relief) Act 2025. That saves up to $268 a year for people earning over $45,000. The same bracket is legislated to fall again, to 14%, from 1 July 2027.
How marginal rates actually work
A common misunderstanding is that earning $1 more can push your whole income into a higher rate. It cannot. If your taxable income is $50,000, you pay nothing on the first $18,200, 15% on the $26,800 between $18,201 and $45,000 ($4,020), and 30% only on the $5,000 above $45,000 ($1,500) — a total of $5,520, before the Medicare levy and any offsets. Your marginal rate is 30%, but your average rate is about 11%.
Worked examples (2026–27, before Medicare levy and offsets)
| Taxable income | Income tax |
|---|---|
| $25,000 | 15% × $6,800 = $1,020 |
| $50,000 | $4,020 + 30% × $5,000 = $5,520 |
| $80,000 | $4,020 + 30% × $35,000 = $14,520 |
| $120,000 | $4,020 + 30% × $75,000 = $26,520 |
| $150,000 | $31,020 + 37% × $15,000 = $36,570 |
| $200,000 | $51,370 + 45% × $10,000 = $55,870 |
Compared with 2025–26
The thresholds did not move — only the second-bracket rate did. In 2025–26 the same table read 16c per $1 over $18,200, $4,288 plus 30c over $45,000, $31,288 plus 37c over $135,000, and $51,638 plus 45c over $190,000. Everything else is identical.
Non-residents
Foreign residents for the full year have no tax-free threshold: 30% on $0–$135,000, 37% on $135,001–$190,000, and 45% above $190,000. They also do not pay the Medicare levy.
Remember
These rates exclude the 2% Medicare levy, any Medicare levy surcharge, and the effect of tax offsets such as the Low Income Tax Offset. Your final bill is worked out on your notice of assessment, not from this table alone.
Sources: Australian Taxation Office (ato.gov.au) — Tax rates, Australian resident; Treasury Laws Amendment (More Cost of Living Relief) Act 2025.