Key takeaways
- One band changed: 16% to 15% on income between $18,200 and $45,000. Nothing else moved.
- Ceiling: ($45,000 − $18,200) × 1% = $268 a year, or $5.15 a week and $10.31 a fortnight.
- The saving is flat above $45,000. A $200,000 earner and a $45,000 earner save the same dollars.
- Medicare levy (2%) and LITO (max $700) are unchanged for 2026-27.
- Weekly withholding rounds to the nearest dollar, so $5.15 can present as $5 or $6 on the payslip.
- If your employer was late loading the 1 July 2026 schedules, the correction comes through your tax return, not the payslip.
The ceiling is $268, and the arithmetic is one line
Only the second bracket changed. Here is the 2026-27 resident scale against the year before it:
| Taxable income | 2025-26 rate | 2026-27 rate |
|---|---|---|
| $0 to $18,200 | Nil | Nil |
| $18,200 to $45,000 | 16% | 15% |
| $45,000 to $135,000 | 30% | 30% |
| $135,000 to $190,000 | 37% | 37% |
| Above $190,000 | 45% | 45% |
The band runs from $18,200 to $45,000, which is $26,800 wide. One percentage point off that band is $26,800 × 1% = $268 a year. Divided across the year that is $5.15 a week or $10.31 a fortnight. Nobody gets more than that from this change, at any income, because no other rate or threshold moved. The low income tax offset is unchanged at a maximum of $700 and the Medicare levy is unchanged at 2%.
What it is worth at your salary
Computed from this site's own engine, comparing the 2025-26 scale with the 2026-27 scale and holding everything else identical: resident, claiming the tax-free threshold, no HELP debt. Tax shown includes the Medicare levy and is net of LITO.
| Taxable income | 2025-26 tax | 2026-27 tax | Annual saving | Per week | Per fortnight |
|---|---|---|---|---|---|
| $25,000 | $388 | $320 | $68 | $1.31 | $2.62 |
| $30,000 | $1,387 | $1,269 | $118 | $2.27 | $4.54 |
| $40,000 | $3,713 | $3,495 | $218 | $4.19 | $8.38 |
| $45,000 | $4,863 | $4,595 | $268 | $5.15 | $10.31 |
| $60,000 | $9,888 | $9,620 | $268 | $5.15 | $10.31 |
| $70,000 | $13,188 | $12,920 | $268 | $5.15 | $10.31 |
| $85,000 | $17,988 | $17,720 | $268 | $5.15 | $10.31 |
| $100,000 | $22,788 | $22,520 | $268 | $5.15 | $10.31 |
| $150,000 | $39,838 | $39,570 | $268 | $5.15 | $10.31 |
| $200,000 | $60,138 | $59,870 | $268 | $5.15 | $10.31 |
Weekly and fortnightly figures are the annual saving divided across 52 and 26 pay periods. They are not a payslip-exact withholding calculation, which is done under the ATO withholding schedules rather than the annual scale.
Why it goes flat at $45,000
Look down the annual saving column. It climbs to $268 at $45,000 and then stops dead. Every row from $45,000 to $200,000 reads $268.
The reason is how marginal rates work. You only benefit from a rate cut on income that actually sits in the band that was cut. At $30,000, you have $11,800 of income inside the 15% band, so you save $118. At $45,000 you have filled the band completely, all $26,800 of it, so you save the full $268. Past $45,000 your extra income is taxed at 30%, 37% and 45%, and none of those rates changed, so there is nothing further to gain.
A worker on $45,000 and an executive on $200,000 receive precisely the same $268. In percentage terms that is 0.6% of the first worker's income and 0.13% of the second's. Whether that is the right design is a political question. The arithmetic is not in dispute, and it is why the cut is barely visible on a high-income payslip.
If your income is below $18,200 you get nothing, because that income was already taxed at nil. How that threshold works, and what happens when you claim it against the wrong employer, is in the tax-free threshold. The full current scale sits on tax brackets 2026-27, and the wider set of things that changed on 1 July is in 2026-27 tax changes.
Two reasons your payslip may not show it
Say you are on $70,000 and expecting $5.15 more a week. You look at the payslip and see the same net pay as June, or a difference of a few dollars in the wrong direction. Two mechanisms explain most of that, and neither means you are being underpaid.
1. Rounding in the withholding schedules
Your employer does not apply the annual scale to your pay. It applies the ATO withholding schedules, which are coefficient tables built for each pay cycle, and weekly withholding under those schedules rounds to the nearest dollar. A $5.15 weekly change can therefore present as $5 or $6 depending on where you sit inside a coefficient band. Over a year that rounding washes out, but on any single payslip it blurs a change this small. The schedules themselves are set out in the weekly tax table and tax tables 2026-27.
2. Payroll software timing
The 2026-27 schedules were reissued to apply to payments from 1 July 2026. If your employer had not updated to them before the first pay run of the year, those early runs used the old figures. That is a timing problem rather than a lost entitlement: withholding is an estimate collected through the year, and the final position is settled on your tax return. Over-withholding comes back as a larger refund.
Which is worth remembering if the July payslips looked wrong and August looks right. The gap does not vanish, it just arrives at assessment instead. The tax refund calculator reconciles tax withheld against tax owed for exactly this situation, and why your PAYG is too high covers the more persistent causes of over-withholding.
Other things move net pay at the same time and get blamed on the tax cut: a HELP repayment crossing a threshold, a change in hours, salary sacrifice starting, or the second-job withholding effect. Those are larger than $5 a week and are the more likely explanation if your pay moved noticeably.
How to check your own
Three steps, using your actual payslip rather than an estimate.
- Take the gross for the period from your payslip and put it into the take-home pay calculator on the matching pay cycle. Compare the net figure to what landed in your account.
- For a cycle-specific check, use the weekly tax calculator or the fortnightly tax calculator, which work in the same periods your employer does.
- If the two disagree by more than a dollar or two, the usual culprits are a HELP debt, the tax-free threshold being claimed at a different employer, or an allowance treated differently from how you assumed. How PAYG is calculated walks through the order the deductions are applied in.
One caution on precision. This site computes the annual position accurately, and the figures in the table above are reproducible from the published scale. It does not claim to reproduce your employer's per-pay withholding to the cent, because that is done under the ATO coefficient schedules with their own rounding rules. Use the numbers here to know what you should be getting across the year, and expect small differences on any individual payslip.
Frequently asked questions
How much is the 2026-27 tax cut worth?
Why is the tax cut the same for everyone above $45,000?
Why has my pay not changed since 1 July 2026?
What if my employer used the old tax tables in July?
What are the 2026-27 tax rates?
Did the Medicare levy or LITO change on 1 July 2026?
Do I get the tax cut if I earn under $18,200?
Sources
- The 2026-27 resident rates on this page are the legislated scale, verified 28 July 2026 against the ATO new legislation page and the withholding schedules reissued to apply from 1 July 2026. The current scale is published on ATO: Tax rates, Australian residents.
- Withholding schedules, including the weekly coefficient tables and the rounding rules: ATO Schedule 1: Statement of formulas for calculating amounts to be withheld (NAT 1004), published 17 June 2026.
- Every dollar figure in the tables above is computed at build time from this site's tax engine (bracket, LITO and Medicare levy functions in
lib/tax.ts), not typed in by hand. The 2025-26 comparison holds the same LITO and Medicare rules and changes only the 16% band to 15%.
Medicare levy low-income phase-in uses the published 2025-26 single thresholds, which affects the $30,000 row only. The 2026-27 thresholds had not been published at the time of writing. Family and senior thresholds are not modelled.
Related
Take-Home Pay Calculator
Check your payslip against the 2026-27 scale
Open →2026-27 Tax Changes
Everything that changed on 1 July
Open →Tax Brackets 2026-27
The current scale and how it applies
Open →
Narelle Hartigan is a CPA-qualified tax accountant with over a decade of experience in Australian personal taxation and payroll. She founded PAYG Calculator Australia to make tax withholding easy for every Australian worker to understand.