What are the Australian tax brackets for 2026-27?

Nothing on the first $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. The 2% Medicare levy sits on top. The 15% rate replaced 16% on 1 July 2026 under the legislated staged cuts.

Will earning more push me into a higher bracket and cost me money?

No. Australia uses marginal rates, so only the income above each threshold is taxed at the higher rate. Earning one dollar more than $45,000 means that single dollar is taxed at 30%. Every dollar below is taxed exactly as before. Take-home pay always rises with gross pay, though a study loan crossing a threshold can make the increase smaller than expected.

What is the difference between my marginal and average tax rate?

The marginal rate applies to your next dollar earned; the average rate is total tax divided by total income. On $85,000 the marginal rate is 30% while the average is closer to 21%, because the tax-free threshold and the 15% bracket apply to everyone regardless of what they earn. Use marginal for decisions at the edge and average to understand your overall burden.

Why did I get a tax bill instead of a refund?

Your employer withheld less than your actual liability. Common causes are a second job where both employers apply the tax-free threshold, untaxed income such as interest or a side business, a capital gain, claiming the threshold incorrectly, or a study loan your employer did not know about. Comparing the total tax here against the total withheld on your income statement will show the gap.

Is the Medicare levy the same as the Medicare levy surcharge?

No. The levy is 2% and applies to almost everyone, funding the public system. The surcharge is an additional 1% to 1.5% charged only to higher earners who do not hold private hospital cover, and it is designed to be avoidable by taking out a policy. This calculator includes the levy; the private health insurance calculator handles the surcharge.

Does this include the Medicare levy surcharge or private health rebate?

No, and both can move your position by more than a thousand dollars. If your income for surcharge purposes is above the threshold and you do not hold private hospital cover, add the surcharge separately. The private health insurance versus surcharge calculator compares the two directly.

Australian Income Tax Calculator

Australia· 2026-27

Calculates Australian income tax for 2026-27 using current ATO brackets: nothing to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above. On an $85,000 taxable income the tax is $16,020.00 plus $1,700.00 Medicare levy.

Results

Worked example. Edit the values and press Calculate

Take-home pay

$67,280.00

You keep from your next $1,000
$680.00
The other $320.00 goes in income tax, Medicare levy and any lost offset.
Income before the next tax bracket
$50,000
Above $135,000 each extra dollar is taxed at 37% instead of 30%.
Income tax
$16,020.00
Medicare levy
$1,700.00
Total tax and levies
$17,720.00
Marginal tax rate
30%
The rate on your next dollar of income, before the Medicare levy.
Average tax rate
20.85%
Monthly take-home
$5,606.67
Fortnightly take-home
$2,587.69

Why use this calculator

Almost everyone misunderstands tax brackets in the same way: they believe moving into a higher bracket taxes all of their income at the higher rate, and that a pay rise can therefore leave them worse off. It cannot. Only the income inside each bracket is taxed at that bracket's rate, and this calculator shows the split explicitly so the idea can be put to rest with numbers rather than argument.

Beyond that, it gives you the figures you actually need in a conversation about money: your marginal rate, which decides whether salary sacrifice or a deduction is worth chasing, and your average rate, which is what you really pay.

How to use it

Enter your taxable income, which is assessable income minus deductions.
The figure at the bottom of your return, not the gross salary on your contract.
If you have not lodged yet, start with gross salary and subtract work-related deductions you expect to claim.
Select whether you have a study loan, because the compulsory repayment is collected through the same system and changes your take-home pay materially.
The Medicare levy option matters only at low incomes, where families get a higher threshold before the levy starts.
The bracket table below the result shows exactly how much of your income sat in each band.

What each result means

Take-home pay: Taxable income less income tax, the Medicare levy and any study loan repayment. It is annual. Divide by 26 for a fortnightly figure.
You keep from your next $1,000: How much of a $1,000 pay rise or bonus would reach your bank account after income tax, the Medicare levy and any study loan repayment. It reflects your marginal rate, plus any offset that shrinks as income rises.
Income before the next tax bracket: How much more taxable income you can earn before the next, higher rate starts. Only the dollars above that line are taxed at the higher rate, so crossing it never reduces your take-home pay.
Income tax: Tax across the brackets after the low income tax offset is applied. Offsets reduce tax payable; they are not refundable cash.
Medicare levy: 2% of taxable income, funding the public health system. Low incomes pay a reduced amount or nothing at all.
Study loan repayment: Your compulsory HELP or VET loan repayment for the year, collected through the tax system alongside income tax.
Total tax and levies: Everything the ATO takes. Compare this against the total withheld on your payment summary to predict a refund or a bill.
Marginal tax rate: The rate applied to your next dollar earned. This is the number that decides whether a deduction, salary sacrifice or extra shift is worth it.
Average tax rate: Total tax divided by total income. Always well below the marginal rate, because the lower brackets apply to everyone.
Monthly take-home: Annual take-home divided by twelve, which is the figure to budget monthly bills and mortgage repayments against.
Fortnightly take-home: Annual take-home divided by 26. Payroll withholding will differ slightly because it uses ATO withholding schedules.

The formula

Tax is applied marginally across five brackets for 2026-27:

Nil on the first $18,200
15% from $18,201 to $45,000 (reduced from 16% on 1 July 2026)
30% from $45,001 to $135,000
37% from $135,001 to $190,000
45% above $190,000

The low income tax offset then reduces the tax payable by up to $700, phasing down by 5c in the dollar between $37,500 and $45,000 and 1.5c in the dollar above that, reaching nil at $66,667. The Medicare levy of 2% is added, with a phase-in for low incomes above the threshold.

How this number is used in practice

Your marginal rate is the single most useful number here, because it prices every financial decision at the edge. A $1,000 deduction is worth $300 to someone on the 30% rate and $450 to someone on 45%. Salary sacrificing into super converts income taxed at your marginal rate into a contribution taxed at 15%, so the higher your rate the larger the saving. Even the decision to take an extra shift is really a question about the rate on those particular dollars.

The gap between the marginal and average rate explains most tax arguments. Someone on $135,000 has a 30% marginal rate but pays closer to 24% of their income overall once the tax-free threshold and lower brackets are counted. Political debate tends to quote one number and household budgets depend on the other.

Withholding is not the same as tax. Payroll uses ATO schedules that approximate your annual liability per pay period, which is why a bonus can be withheld at what feels like a punitive rate, and why the reconciliation at tax time produces a refund or a bill.

This calculator computes the actual liability, so the difference between it and what was withheld is roughly your expected refund.

Worked examples

$85,000 taxable income, no study loan
Income tax $16,020.00, Medicare levy $1,700.00, take-home $67,280.00. Marginal rate 30%.
$45,000 taxable income, no study loan
Income tax $3,695.00 after a $325.00 low income tax offset, plus $900.00 Medicare levy.
$150,000 taxable income with a study loan
Income tax $36,570.00, Medicare levy $3,000.00 and a study loan repayment of $12,476.11. Marginal rate 37%.

When people use it

Estimating your refund or bill before you lodge
Finding your marginal rate before deciding on salary sacrifice or a deduction
Comparing two job offers on take-home rather than headline salary
Working out what a pay rise is actually worth after tax
Explaining to someone why moving into a higher bracket cannot reduce their take-home pay

Tips

From 1 July 2026 the 2026-27 rate on income between $18,201 and $45,000 is 15%, down from 16%. A further cut to 14% is legislated for 2027-28.
Only income inside a bracket is taxed at that bracket's rate. A pay rise can never reduce your take-home pay.
The low income tax offset is worth up to $700 but is not a payment. It reduces tax owed and cannot create a refund on its own.
Deductions are worth your marginal rate, not their full value: a $1,000 deduction saves $300 at the 30% rate.
Keep receipts for work-related expenses as you go. The $300 substantiation-free limit is a rule about proof, not a free deduction.
Your withheld tax rarely matches your liability exactly, which is why the refund exists. It is your money returned, not a bonus.

What it assumes, and where it stops being accurate

Resident tax rates are used. Foreign residents pay from the first dollar with no tax-free threshold and are not modelled here.
Only the low income tax offset is applied. The seniors and pensioners offset, zone offsets, private health rebate and franking credits are not.
The Medicare levy surcharge is not included. Use the private health insurance calculator for that.
Taxable income is taken as given: deductions, capital gains, business income and investment losses must already be reflected in the figure you enter.
Child support, family tax benefit and Division 293 are outside scope.

Terms used on this page

Taxable income: Assessable income minus allowable deductions. The figure tax is actually calculated on.
Marginal rate: The tax rate applied to your next dollar of income.
Low income tax offset (LITO): A non-refundable offset of up to $700 that reduces tax payable for lower incomes.
Medicare levy: A 2% levy on taxable income funding the public health system, reduced or waived at low incomes.
Withholding: The tax your employer deducts each pay, an estimate that is reconciled when you lodge your return.

Questions people ask

What are the Australian tax brackets for 2026-27?: Nothing on the first $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. The 2% Medicare levy sits on top. The 15% rate replaced 16% on 1 July 2026 under the legislated staged cuts.
Will earning more push me into a higher bracket and cost me money?: No. Australia uses marginal rates, so only the income above each threshold is taxed at the higher rate. Earning one dollar more than $45,000 means that single dollar is taxed at 30%. Every dollar below is taxed exactly as before. Take-home pay always rises with gross pay, though a study loan crossing a threshold can make the increase smaller than expected.
What is the difference between my marginal and average tax rate?: The marginal rate applies to your next dollar earned; the average rate is total tax divided by total income. On $85,000 the marginal rate is 30% while the average is closer to 21%, because the tax-free threshold and the 15% bracket apply to everyone regardless of what they earn. Use marginal for decisions at the edge and average to understand your overall burden.
Why did I get a tax bill instead of a refund?: Your employer withheld less than your actual liability. Common causes are a second job where both employers apply the tax-free threshold, untaxed income such as interest or a side business, a capital gain, claiming the threshold incorrectly, or a study loan your employer did not know about. Comparing the total tax here against the total withheld on your income statement will show the gap.
Is the Medicare levy the same as the Medicare levy surcharge?: No. The levy is 2% and applies to almost everyone, funding the public system. The surcharge is an additional 1% to 1.5% charged only to higher earners who do not hold private hospital cover, and it is designed to be avoidable by taking out a policy. This calculator includes the levy; the private health insurance calculator handles the surcharge.
Does this include the Medicare levy surcharge or private health rebate?: No, and both can move your position by more than a thousand dollars. If your income for surcharge purposes is above the threshold and you do not hold private hospital cover, add the surcharge separately. The private health insurance versus surcharge calculator compares the two directly.

Use this with

Australian Income Tax Calculator answers one part of the question. These pick up where it stops: Salary After Tax Calculator, HECS-HELP Repayment Calculator, Salary Sacrifice Calculator and Sole Trader Tax Calculator.

Where these figures come from

Australia· 2026-27Last reviewed 2026-09·How we build and check calculators

Figures and rules on this page follow Australian law and ATO guidance.

ATO: Tax rates for Australian residents. Income tax brackets for 2026-27
ATO: Study and training loan repayment thresholds and rates. HELP repayment thresholds and the marginal repayment system
ATO: Medicare levy surcharge income thresholds and rates. Surcharge tiers for singles and families
ATO: Super guarantee and contribution caps. SG rate 12% and the maximum contribution base

Australian Income Tax Calculator produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.