What are the income tax brackets in Australia 2026?
Australia's income tax brackets for the 2026 financial year (1 July 2025 - 30 June 2026) will be the same as those commencing 1 July 2024. These rates feature a tax-free threshold and adjusted marginal rates designed to simplify the system.
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How it works in practice
Understanding Australian Income Tax for 2026
Australia's income tax system is progressive, meaning higher incomes are taxed at higher rates. The rates for the 2026 financial year (1 July 2025 to 30 June 2026) are based on the Stage 3 tax cuts that commenced on 1 July 2024. These changes aim to simplify the tax system and provide tax relief to a broader range of income earners.
For Australian resident taxpayers, the tax brackets and rates from 1 July 2024 (and thus for the 2026 financial year) are:
- Nil for income up to $18,200
- 19% for income from $18,201 to $45,000
- 30% for income from $45,001 to $135,000
- 37% for income from $135,001 to $190,000
- 45% for income over $190,000
These rates do not include the Medicare Levy, which is an additional 2% on taxable income for most taxpayers. The tax-free threshold remains at $18,200.
Important exceptions
The listed tax brackets apply to Australian residents for tax purposes. Non-residents have different tax rates, with no tax-free threshold.
Additionally, the Medicare Levy of 2% generally applies but can have exemptions or reduced rates for low-income earners or those with specific circumstances. Various tax offsets, such as the low income tax offset, may reduce the amount of tax payable for eligible individuals, even if their income falls within a taxable bracket.
What you should do now
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Understand your tax residency status, as this dictates which tax rates apply to your income.
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Factor in the Medicare Levy (currently 2%) when estimating your total tax liability, unless you are eligible for an exemption or reduction.
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Keep accurate records of all your income, deductions, and any capital gains or losses throughout the financial year.
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Utilise the Australian Taxation Office (ATO) website for official updates and resources specific to your income and circumstances.
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Consult a registered tax agent or financial advisor for personalised advice regarding your tax obligations and potential offsets.
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