Australia Income Tax Brackets 2026-27
Official Australian resident and non-resident income tax rates for the 2026–27 financial year (1 July 2026 – 30 June 2027), including the new 15% second bracket.
🆕 What changed in 2026-27
The second income tax bracket (income $18,201–$45,000) was reduced from 19% to 15% from 1 July 2026. This is part of the Stage 3 tax cuts legislated in 2024. Every resident taxpayer earning above $45,000 saves up to $804 per year compared to 2024-25 rates. The tax-free threshold and all other brackets remain unchanged.
Resident Tax Brackets 2026-27
| Taxable income | Tax rate | Note |
|---|---|---|
| $0 – $18,200 | 0% | Tax-free threshold |
| $18,201 – $45,000 | 15% | ↓ reduced from 19% (Stage 3 cuts) |
| $45,001 – $135,000 | 30% | |
| $135,001 – $190,000 | 37% | |
| $190,001+ | 45% | Plus 2% Medicare levy |
Plus 2% Medicare Levy on all income (over the $28,011 shade-in threshold). Low Income Tax Offset (LITO) up to $700 reduces tax payable for incomes below $66,667.
Non-Resident Tax Brackets 2026-27
| Taxable income | Tax rate | Note |
|---|---|---|
| $0 – $135,000 | 30% | No tax-free threshold |
| $135,001 – $190,000 | 37% | |
| $190,001+ | 45% |
Non-residents are not entitled to the tax-free threshold, LITO, or Medicare Levy exemptions.
Worked Examples — Common Salaries
Australian resident, no HECS debt, with private health insurance. Figures include income tax (after LITO) and Medicare levy.
How Australian Tax Brackets Work
Australia uses a progressive tax system — you only pay the higher rate on the portion of income that falls within each bracket, not on your entire income.
For example, on an $80,000 salary in 2026-27: The first $18,200 is tax-free. The next $26,800 (to $45,000) is taxed at 15% = $4,020. The remaining $35,000 (to $80,000) is taxed at 30% = $10,500. Total income tax before offsets = $14,520.
The Low Income Tax Offset (LITO) further reduces tax for lower incomes — up to $700 off at the maximum. The effective tax rate is always lower than the marginal rate because lower brackets apply to your first dollars of income.