Resident tax brackets 2026-27
These rates apply to Australian residents for tax purposes who claim the tax-free threshold. They cover income from 1 July 2026 to 30 June 2027.
| Taxable income | Rate | Tax on this income |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 15% | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,020 plus 37c for each $1 over $135,000 |
| Over $190,000 | 45% | $51,370 plus 45c for each $1 over $190,000 |
The 2% Medicare levy applies on top of these rates for most residents. Rates for residents who do not claim the tax-free threshold start at 15% from the first dollar.
What changed on 1 July 2026
One thing: the rate on income between $18,201 and $45,000 fell from 16% to 15%. It is the first step of the legislated cuts that take the same rate to 14% from 1 July 2027. Every resident earning $45,000 or more saves $268 in 2026-27; between $18,201 and $45,000 the saving is 1c per dollar above the threshold. All other thresholds and rates are unchanged.
The cut arrives through smaller withholding on each pay, not as a lump sum. If your payslip after July 2026 looks a few dollars lighter on tax, that is the schedule update working as intended.
Non-resident tax brackets 2026-27
Foreign residents for tax purposes get no tax-free threshold and pay no Medicare levy. Tax starts at 30% from the first dollar.
| Taxable income | Rate | Tax on this income |
|---|---|---|
| $0 – $135,000 | 30% | 30c for each $1 |
| $135,001 – $190,000 | 37% | $40,500 plus 37c for each $1 over $135,000 |
| Over $190,000 | 45% | $60,850 plus 45c for each $1 over $190,000 |
Working holiday maker brackets 2026-27
Visa 417 and 462 holders working for a registered employer pay 15% up to $45,000, then the ordinary non-resident rates above that.
| Taxable income | Rate |
|---|---|
| $0 – $45,000 | 15% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| Over $190,000 | 45% |
Marginal vs effective rate: the maths most people get wrong
Moving into a higher bracket never taxes your whole income at the higher rate. Each rate applies only to the slice of income inside its bracket. Your marginal rate is the rate on your next dollar. Your effective rate is total tax divided by total income, and it is always lower than the marginal rate because the 0% and 15% slices drag the average down. A pay rise can never leave you with less take-home pay because of brackets alone.
Worked examples at three salaries
Resident on $60,000 (2026-27)
Resident on $85,000 (2026-27)
Resident on $120,000 (2026-27)
Want the same breakdown on your own salary, including HELP repayments and super? Run it through the PAYG calculator.
What sits on top of the brackets
- Medicare levy: 2% of taxable income for most residents, with a low-income phase-in. Details in our Medicare levy guide.
- Low income tax offset: up to $700 for incomes under $66,667, applied automatically. It is why the worked example at $60,000 shows less tax than the bare bracket maths.
- HELP repayments: from $69,528 of repayment income in 2026-27, on a marginal 15c and 17c scale.
- Withholding schedules: your payslip figure comes from the ATO's tax tables, which convert these annual brackets into per-pay amounts.
Frequently asked questions
What are the tax brackets in Australia for 2026-27?
Is the first $18,200 really tax free?
Do the brackets include the Medicare levy?
What is the tax bracket cut worth to me?
Does moving into a higher bracket reduce my take-home pay?
Are the brackets different for non-residents?
Sources
- ATO: Tax rates for Australian residents
- ATO: Tax rates for foreign residents
- ATO: Personal income tax cuts from 1 July 2026
Related resources
PAYG Calculator
Your take-home pay under these brackets
Open →Tax Tables 2026-27
The per-pay withholding amounts
Open →Tax-Free Threshold
Who should claim it and when not to
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.