Income tax rates for 2026–27 (Australian residents)

Tax-free threshold

$18,200 (2026–27)

Lowest rate

15% on $18,201 to $45,000 (2026–27), down from 16% in 2025–26

Top rate

45% on taxable income over $190,000 (2026–27)

Medicare levy

2% of taxable income, on top of these rates

Resident tax rates for 2026–27

The table below shows the tax on taxable income for the 2026–27 financial year, which runs from 1 July 2026 to 30 June 2027. It is taken from the ATO's resident tax rates page (last updated 13 August 2026).

These are marginal rates. Each rate applies only to the slice of income inside its bracket, so moving into a higher bracket never increases the tax on the income below it. The dollar amounts in the second column ($4,020, $31,020 and $51,370) are simply the total tax on all the brackets underneath.

The ATO says these rates are for people who were Australian residents for tax purposes for the whole year and who can claim the full tax-free threshold. Part-year residents and foreign residents are taxed differently.

What changed from 2025–26

The only change for 2026–27 is the lowest rate. The bracket thresholds stayed the same, but the rate on income between $18,201 and $45,000 dropped from 16% to 15%.

Because the cut applies to a bracket that is $26,800 wide ($45,000 less $18,200), one percentage point is worth up to $268 a year. Anyone with taxable income of $45,000 or more gets the full $268 reduction in 2026–27 compared with 2025–26. People earning between $18,201 and $45,000 get 1% of their income above $18,200.

The 2025–26 rates still matter: they apply to tax returns for the year ended 30 June 2026. The new rates are used to calculate tax in the 2026–27 return, which covers income earned from 1 July 2026 and is lodged after that year ends on 30 June 2027.

Worked examples

These examples use the ATO formulas above for a full-year resident. They show income tax only, before the Medicare levy and before any tax offsets that might reduce the result.

An individual's actual result will differ once offsets, Medicare levy reductions or exemptions, the Medicare levy surcharge, HELP repayments and the tax already withheld from your pay are taken into account.

Showing the maths for $75,000 in 2026–27

• Income above $45,000: $75,000 less $45,000 = $30,000.
• Tax on that slice at 30%: $30,000 × 0.30 = $9,000.
• Add the fixed amount for the bracket: $4,020 + $9,000 = $13,020 income tax.
• Medicare levy at 2%: $75,000 × 0.02 = $1,500.
• Total before offsets and any levy reduction: $13,020 + $1,500 = $14,520.

Showing the maths for $30,000 in 2026–27

• Income above $18,200: $30,000 less $18,200 = $11,800.
• Tax at 15%: $11,800 × 0.15 = $1,770 income tax.
• In 2025–26 the same income was taxed at 16%: $11,800 × 0.16 = $1,888, so the saving is $118.

The Medicare levy is charged separately

The ATO's tables do not include the Medicare levy. For 2026–27 it is 2% of taxable income on top of the rates above, so the effective top marginal rate for a resident paying the full levy is 47%.

A reduced levy, or no levy at all, can apply to some people based on their income, their spouse's income and other circumstances, and eligibility for each reduction or exemption is checked on its own. The ATO calculates the levy as part of the tax return assessment, and employers generally allow for it in the PAYG amounts they withhold from wages.

The Medicare levy surcharge is a separate charge that applies to some people as well as the levy. Our Medicare levy and surcharge guide covers the thresholds and how the two interact.

The next step: 14% from 1 July 2027

The ATO describes the lower rates as a two-stage tax cut that is now law. Stage one cut the 16% rate to 15% from 1 July 2026. Stage two cuts the 15% rate to 14% from 1 July 2027, which is the 2027–28 financial year.

At the time of writing (October 2026), the ATO has not yet published a full 2027–28 rate table on its resident tax rates page, so we are not quoting bracket amounts for that year. We will update this guide when the ATO does.

The lowest rate is 16% for 2025–26, 15% for 2026–27 and legislated to fall to 14% from 1 July 2027.

Other rates and offsets that can change the result

• Foreign residents for the full year are taxed from the first dollar and do not pay the Medicare levy. The ATO's foreign resident rates page currently shows rates up to 2025–26 (30% on every dollar up to $135,000, 37% to $190,000 and 45% above that). It had not published 2026–27 foreign resident rates when we checked, so see the ATO foreign resident tax rates page for the current figures.
• Seniors and pensioners: the senior and pensioner tax offset (SAPTO) thresholds change for 2026–27 because of the tax cuts, though the maximum offsets do not. For a single person the maximum is $2,230, with shading out starting at $36,034 and the offset cutting out at $53,874 of rebate income.
• Low income earners may also receive the low income tax offset, which the ATO works out automatically when you lodge. Our tax offsets guide explains how offsets reduce tax payable.
• Deductions come first: the rates apply to taxable income, which is your assessable income less allowable deductions. Our guides on the standard deduction and work-related deductions explain what can reduce it.

Getting help with your tax

Tax rates are only one part of the calculation. What you can claim, which offsets apply and how much has already been withheld usually make a bigger difference to the final refund or bill. Ross Accounting prepares individual tax returns for clients at our Brookvale office on Sydney's Northern Beaches and our Redland Bay branch in Queensland, and can prepare an estimate based on a client's actual figures. This guide is general information only and does not take your personal circumstances into account.

Frequently asked questions

General information only, not personal advice. Tax rules change and your circumstances matter, so talk to us before acting. See our disclaimer.