The 2026-27 tax brackets
| Taxable income | Rate | Tax on this bracket |
|---|---|---|
| $0 – $18,200 | 0% | Nil — the tax-free threshold |
| $18,201 – $45,000 | 15% | 15c per $1 over $18,200 (cut from 16% on 1 July 2026) |
| $45,001 – $135,000 | 30% | $4,020 + 30c per $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,020 + 37c per $1 over $135,000 |
| Over $190,000 | 45% | $51,370 + 45c per $1 over $190,000 |
Rates are marginal — each rate applies only to the slice of income inside its bracket, which is why someone "in the 30% bracket" on $80,000 actually pays an effective rate around 20%. The 2% Medicare levy applies on top for most people, phasing in from $28,011 for singles, and the Low Income Tax Offset quietly refunds up to $700 at lower incomes, lifting the effective tax-free threshold to about $22,867.
What changed this year
Two things worth money. First, the second bracket's rate dropped from 16% to 15% on 1 July 2026 — worth up to $268 a year to everyone earning over $45,000, with another cut to 14% already legislated for 1 July 2027. Second, from this financial year you can claim a $1,000 instant deduction for work-related expenses with no receipts — if your real expenses are higher and documented, claim those instead.