Australia 2026-27 Personal Income Tax Rates & Brackets

For the 2026-27 financial year, Australian residents pay tax across five progressive brackets, with the second-bracket rate now reduced to 15% as Stage 3 tax cuts continue to phase in. The tax-free threshold remains at $18,200. The top marginal rate of 45% applies to income above $190,000.

Data in this article is sourced from the Australian Taxation Office and official Treasury parameters for the 2026-27 financial year.

Resident tax rates 2026-27

The income tax rates for Australian residents for the 2026-27 year are:

$0–$18,200: Nil (tax-free threshold)
$18,201–$45,000: 15 cents for each $1 over $18,200. Maximum tax in this bracket: $4,020
$45,001–$135,000: $4,020 plus 30 cents for each $1 over $45,000. Maximum tax in this bracket: $31,020
$135,001–$190,000: $31,020 plus 37 cents for each $1 over $135,000. Maximum tax in this bracket: $51,370
Over $190,000: $51,370 plus 45 cents for each $1 over $190,000

The key change from 2025-26 is the second-bracket rate reduction from 16% to 15%. The rate is legislated to fall further to 14% from 1 July 2027.

Example calculations

Taxable income of $60,000:

Tax on first $18,200: $0
Tax on $18,201–$45,000: $4,020
Tax on $45,001–$60,000: $15,000 × 0.30 = $4,500
Total tax (excl. Medicare Levy): $8,520

Taxable income of $100,000:

Tax on first $18,200: $0
Tax on $18,201–$45,000: $4,020
Tax on $45,001–$100,000: $55,000 × 0.30 = $16,500
Total tax (excl. Medicare Levy): $20,520

Taxable income of $200,000:

Tax on first $18,200: $0
Tax on $18,201–$45,000: $4,020
Tax on $45,001–$135,000: $27,000
Tax on $135,001–$190,000: $20,350
Tax on $190,001–$200,000: $10,000 × 0.45 = $4,500
Total tax (excl. Medicare Levy): $55,870

Foreign resident tax rates

Foreign residents do not receive the tax-free threshold and pay tax from the first dollar earned in Australia. The brackets are:

$0–$135,000: 30 cents for each dollar
$135,001–$190,000: 37 cents for each dollar over $135,000
Over $190,000: 45 cents for each dollar over $190,000

Foreign residents are not liable for the Medicare Levy.

Medicare Levy

The Medicare Levy is a flat 2% of taxable income, applied on top of income tax. Not everyone pays the full levy — low-income earners may receive a reduction or exemption.

2026-27 thresholds

Single: Full exemption if taxable income is $28,011 or less. Between $28,011 and $35,014, a shade-in applies at 10 cents per dollar over $28,011.
Family: The family threshold is $47,238, plus $4,338 for each dependent child after the first. The shade-in range extends to $59,048 (plus $5,423 per child).

Medicare Levy Surcharge (MLS)

If you do not have an appropriate level of private hospital cover and your income exceeds the MLS thresholds, you pay an additional surcharge on top of the Medicare Levy:

Tier 1 (1.0%): Singles earning $105,001–$123,000; Families earning $210,001–$246,000
Tier 2 (1.25%): Singles earning $123,001–$164,000; Families earning $246,001–$328,000
Tier 3 (1.5%): Singles earning over $164,000; Families earning over $328,000

The MLS is calculated on your income for MLS purposes, which includes taxable income, reportable fringe benefits, and reportable super contributions. For many high-income earners, maintaining private hospital cover is cheaper than paying the surcharge.

Low Income Tax Offset (LITO)

The Low Income Tax Offset provides additional relief to lower-income earners:

Maximum offset: $700
Phase-out 1: $37,501–$45,000 — reduce by 5 cents per dollar over $37,500
Phase-out 2: $45,001–$66,667 — $325 less 1.5 cents per dollar over $45,000
Above $66,667: No offset available

With LITO, the effective tax-free threshold is approximately $22,867.

Note: The Low and Middle Income Tax Offset (LMITO), which provided up to $1,500 in additional relief, ended on 30 June 2022 and is no longer available.

HECS/HELP repayment rates 2026-27

From 2025-26, HELP repayments moved to a marginal repayment system similar to income tax. Repayments are calculated only on the portion of income above each threshold, not on total income:

Below $69,528: No repayment
$69,528–$129,717: 15 cents for each dollar above $69,528 (maximum $9,028)
$129,717–$186,050: $9,028 plus 17 cents for each dollar above $129,717
Above $186,050: 10% of total repayment income

The HELP indexation rate applied on 1 June 2026 is 2.8%.

FAQ

What is the effective tax rate for someone earning $80,000 in 2026-27?

Tax on $80,000 is $14,520 (exclusive of Medicare Levy). Adding the 2% Medicare Levy brings the total to $16,120. The effective tax rate is approximately 20.15%, or 18.15% without Medicare Levy.

Why is there no LMITO in 2026-27?

The Low and Middle Income Tax Offset was a temporary measure that ended on 30 June 2022. Only the Low Income Tax Offset (LITO) remains available for lower-income earners.

Do foreign residents pay Medicare Levy?

No. Foreign residents are not entitled to Medicare benefits and therefore are not liable for the Medicare Levy or Medicare Levy Surcharge. However, they pay tax from the first dollar of Australian income without a tax-free threshold.

How do I avoid the Medicare Levy Surcharge?

Maintain an appropriate level of private hospital cover with a registered health insurer. If your income exceeds the Tier 1 threshold ($105,001 for singles), the cost of hospital cover is typically lower than the 1% surcharge you would otherwise pay.

When will tax rates change again?

The second-bracket rate is legislated to fall from 15% to 14% on 1 July 2027. No further bracket or threshold changes beyond that have been legislated.