Resident tax rates 2026–27
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,020 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,370 plus 45c for each $1 over $190,000 |
Resident tax rates 2025–26
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
Foreign residents and working holiday makers
Foreign residents pay 30% from the first dollar up to $135,000, then 37% to $190,000 and 45% above, with no tax-free threshold, no low income tax offset and no Medicare levy. Working holiday makers on subclass 417 or 462 visas pay 15% on the first $45,000, then the same rates as residents.
How progressive tax works: a worked example
Taxable income $120,000, resident, 2026–27
Of $120,000, the first $18,200 is tax-free, the next $26,800 is taxed at 15% ($4,020) and the remaining $75,000 at 30% ($22,500). Income tax is $26,520 — an average rate of about 22% even though the top dollar is taxed at 30%.
Income tax$26,5202026–27
- Marginal rate
- 30%
- Average rate
- 22.1%
- Plus Medicare levy
- $2,400
Resident rates 2026–27
| Taxable income | Rate | Your income in band | Tax in band |
|---|---|---|---|
| $0 – $18,200 | 0% | $18,200 | $0 |
| $18,201 – $45,000 | 15% | $26,800 | $4,020 |
| $45,001 – $135,000 | 30% | $75,000 | $22,500 |
| $135,001 – $190,000 | 37% | $0 | $0 |
| $190,001 and over | 45% | $0 | $0 |
Offsets and levies that change the picture
- Low income tax offset: up to $700, reducing to nil at $66,667. With it, a resident pays no income tax until about $22,866 of taxable income.
- Medicare levy: 2% on top, phased in for low earners.
- Medicare levy surcharge: 1% to 1.5% for higher earners without hospital cover.
- Seniors and pensioners tax offset: for eligible older Australians, effectively raising their tax-free income further.
What changes next
The 15% rate is legislated to fall to 14% on 1 July 2027. The thresholds are not indexed to inflation, so wage growth gradually pulls more income into the higher brackets — “bracket creep”.