Australia uses a progressive income tax system: the rate rises in steps as your taxable income crosses each threshold. Being “in the 30% bracket” does not mean all of your income is taxed at 30% — only the part inside that bracket is. This guide covers the 2025–26 financial year (1 July 2025 to 30 June 2026), which is the year most people mean by “2025 tax brackets”.
Australian resident tax brackets for 2025–26
These are the rates the ATO applies to taxable income for Australian residents for the year ended 30 June 2026. The “tax on this bracket” column shows how the tax builds up as income passes each threshold.
| Taxable income | Marginal rate | Tax on this bracket |
|---|---|---|
| $0 – $18,200 | Nil | Nil |
| $18,201 – $45,000 | 16% | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 + 37c for each $1 over $135,000 |
| $190,001 and above | 45% | $51,638 + 45c for each $1 over $190,000 |
The base amounts are cumulative: at exactly $45,000 the tax is $4,288, and at exactly $135,000 it is $31,288. The final bracket has no upper limit.
How marginal tax rates work
A marginal rate is the rate you pay on your next dollar of income. Your effective tax rate is the total tax you pay divided by your total income, and it is always lower than your marginal rate.
Take someone earning $95,000 in 2025–26. They do not pay 37% or 45% on the whole amount. Their income is taxed in layers:
- $0 – $18,200: tax-free.
- $18,201 – $45,000: $26,800 × 16% = $4,288.
- $45,001 – $95,000: $50,000 × 30% = $15,000.
Total income tax is $19,288. Add the 2% Medicare levy ($1,900) and the total is about $21,188 — an effective rate of roughly 22.3%. Their marginal rate, however, is 32% including Medicare, because that is what the next dollar would attract.
Worked examples for common salaries
The table below estimates income tax and the Medicare levy for resident employees in 2025–26. It assumes no deductions, no HELP debt and no private health insurance adjustments.
| Taxable income | Income tax | Medicare levy | Take-home (approx.) |
|---|---|---|---|
| $60,000 | $8,688 | $1,200 | $50,112 |
| $80,000 | $14,788 | $1,600 | $63,612 |
| $95,000 | $19,288 | $1,900 | $73,812 |
| $100,000 | $20,788 | $2,000 | $77,212 |
| $120,000 | $26,788 | $2,400 | $90,812 |
| $150,000 | $36,838 | $3,000 | $110,162 |
| $200,000 | $56,138 | $4,000 | $139,862 |
The $60,000 figure includes the low income tax offset: tax of $8,788 is reduced by a $100 offset to $8,688. Above about $66,667 the offset is no longer available.
For a personalised number — including super, HELP and weekly or fortnightly pay — use the salary calculator. The tax return calculator can also estimate a refund or amount owing using tax already withheld.
What changes in 2026–27
From 1 July 2026, the 16% rate on income between $18,201 and $45,000 drops to 15%. The tax-free threshold and the higher rates are unchanged, but the base amounts for the 30%, 37% and 45% brackets fall slightly.
| Taxable income | 2025–26 | 2026–27 |
|---|---|---|
| $0 – $18,200 | Nil | Nil |
| $18,201 – $45,000 | 16% | 15% |
| $45,001 – $135,000 | $4,288 + 30% | $4,020 + 30% |
| $135,001 – $190,000 | $31,288 + 37% | $31,020 + 37% |
| $190,001 and above | $51,638 + 45% | $51,370 + 45% |
The change applies to income earned from 1 July 2026. It does not reduce the tax already assessed for 2025–26, and it does not create a refund for the earlier year. The saving is up to $268 a year for someone whose income falls entirely within the $18,201–$45,000 band.
Non-residents and working holiday makers
Not everyone pays the resident scale. Foreign residents and working holiday makers have their own brackets and generally cannot use the tax-free threshold.
Foreign residents (2025–26)
| Taxable income | Rate |
|---|---|
| $0 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001 and above | 45% |
Working holiday makers (subclass 417 and 462 visas)
| Taxable income | Rate |
|---|---|
| $0 – $45,000 | 15% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001 and above | 45% |
Working holiday makers generally do not pay the Medicare levy and are not entitled to the low income tax offset. Foreign residents also do not pay the Medicare levy.
Medicare levy and the low income tax offset
The Medicare levy is usually 2% of taxable income and is separate from income tax. For 2025–26, the single low-income thresholds are:
- $28,011 or less: no Medicare levy.
- $28,012 – $35,013: the levy is reduced, phasing in at 10c for each $1 over $28,011.
- Above $35,013: the full 2% applies.
Family thresholds are higher and depend on the number of dependants. If you have private hospital cover, you may also avoid the separate Medicare levy surcharge, which is income-tested and not the same as the levy.
The low income tax offset (LITO) can reduce income tax by up to $700. It phases out at 5c per dollar between $37,500 and $45,000, then at 1.5c per dollar from $45,000 until it reaches nil at $66,667. It can reduce tax to zero but is not refundable.
HELP repayments and super in 2025–26
If you have a HELP/HECS debt, your compulsory repayment depends on your repayment income. Since 2025–26, repayments use marginal rates rather than applying a single percentage to your whole income. The thresholds for 2025–26 are:
- $67,000 or less: no repayment.
- $67,001 – $125,000: 15c for each $1 over $67,000.
- $125,001 – $179,285: $8,700 + 17c for each $1 over $125,000.
- Above $179,285: 10% of total repayment income.
Use the HECS-HELP repayment calculator to see the dollar amount for your salary.
The super guarantee rate is 12% for 2025–26. Super is paid on top of your salary by your employer and is generally taxed at 15% inside the fund, so it is not part of the income tax brackets above. The maximum super contribution base for 2025–26 is $62,500 per quarter ($250,000 a year).