Australia Income Tax Rates & Brackets
Tax System Overview
System: Progressive (marginal)
Authority: Australian Taxation Office (ATO)
Law: Income Tax Assessment Act 1997
The Australian financial year runs 1 July to 30 June. The tax-free threshold is A$18,200 – residents pay no tax on income below this. These rates apply for 2025–26 (unchanged since the Stage 3 tax cuts of 1 July 2024).
Key Deductions & Allowances
Tax-free threshold of A$18,200. Work-related deductions (uniforms, tools, travel). Self-education expenses. Home office expenses. Donations over A$2. Concessional super contributions up to A$30,000.
Australia Income Tax Brackets
2025–26 (1 July 2025 – 30 June 2026) tax year rates for Australia. Progressive (marginal) system.
| Income Range | Tax Rate |
|---|---|
| A$0 – A$18,200 | 0% (Tax-free threshold) |
| A$18,201 – A$45,000 | 16% |
| A$45,001 – A$135,000 | 30% |
| A$135,001 – A$190,000 | 37% |
| A$190,001+ | 45% |
Additional Taxes & Contributions
Beyond income tax, Australia workers may pay these additional charges.
| Tax / Contribution | Rate | Notes |
|---|---|---|
| Medicare Levy | 2% | On taxable income; reduced for low earners |
| Medicare Levy Surcharge | 1–1.5% | If no appropriate private hospital cover; singles earning over A$101,000 (2025–26); depends on circumstances |
| HECS-HELP repayment | Marginal rates | From 2025–26: 15c per dollar over A$67,000 (higher bands above A$125,000) if you have a study debt |
| Superannuation | 12% | Employer-paid since 1 July 2025; mandatory retirement contributions |
Effective Tax Rates by Income
Estimated federal/national income tax only. Shows how effective rates differ from marginal rates.
| Annual Income | Est. Tax | Effective Rate |
|---|---|---|
| A$40,000 | A$3,488 | 8.7% |
| A$60,000 | A$9,488 | 15.8% |
| A$80,000 | A$15,488 | 19.4% |
| A$100,000 | A$21,488 | 21.5% |
| A$150,000 | A$40,013 | 26.7% |
Estimates based on standard deductions/allowances. Actual tax depends on personal circumstances, filing status, and applicable credits.
Jurisdiction, Tax Year & Data Sources
| Jurisdiction | Australia |
| Tax year shown | 2025–26 (1 July 2025 – 30 June 2026) |
| Default taxpayer type | Australian resident claiming the tax-free threshold |
| Included in estimates | Income tax only |
| Not included | Medicare levy, Medicare levy surcharge, HELP repayments, superannuation |
| Official source | Australian Taxation Office (ATO) |
| Last reviewed | 2026-06 |
About Australia's Tax System
Australia uses a progressive income tax system with a generous tax-free threshold of A$18,200. The Stage 3 tax cuts (effective July 2024) reduced the 32.5% rate to 30% and lowered the 19% rate to 16%, benefiting most middle-income earners.
In addition to income tax, Australians pay the Medicare Levy (2%) to fund the public healthcare system. Those without private health insurance above certain income thresholds also pay the Medicare Levy Surcharge (1–1.5%).
Superannuation is a mandatory employer contribution (12% since 1 July 2025) to retirement savings. While not deducted from your pay, it’s an important part of total compensation.
HECS-HELP repayments are income-contingent – from 2025–26 you repay at marginal rates only on income above A$67,000.
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0% (A$0–A$18,200), 16% (A$18,201–A$45,000), 30% (A$45,001–A$135,000), 37% (A$135,001–A$190,000), and 45% (A$190,001+). Unchanged from 2024–25.
A$18,200. Australian residents pay no tax on income below this amount.
A 2% levy on taxable income to fund Australia’s public healthcare system (Medicare). Low-income earners may receive a reduction.
Superannuation (super) is a mandatory employer contribution to your retirement fund. The super guarantee rate has been 12% of ordinary time earnings since 1 July 2025.