Guide · verified 16 September 2026
Australian income tax rates and brackets 2026–27
Australian residents pay tax progressively: only the income inside each bracket is taxed at that bracket's rate.
| Taxable income | Rate in this bracket | Tax calculation |
|---|---|---|
| $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 |
| $190,001 and above | 45% | $51,370 plus 45c for each $1 over $190,000 |
The Medicare levy, Medicare levy surcharge and compulsory HELP repayment are separate calculations. Tax offsets can reduce income tax after the bracket calculation.
The 2026–27 standard work deduction
Eligible Australian residents with employment income can claim a standard deduction of up to $1,000. Specified work-related deductions reduce the remaining standard amount, while deductions excluded by section 25-130(3)—including eligible professional membership and certain insurance expenses—can apply in addition. The deduction cannot exceed assessable labour income.
Primary source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026, Schedule 4.
Worked example: $85,000 salary
| Gross salary | $85,000.00 |
|---|---|
| Standard work deduction | −$1,000.00 |
| Taxable income | $84,000.00 |
| Income tax before offsets | $15,720.00 |
| Medicare levy | $1,680.00 |
| Annual take-home estimate | $67,600.00 |
The standard deduction affects the annual assessment. Regular payroll withholding follows separate ATO schedules, so a payslip estimate can differ even when salary is unchanged.
Check your own result
Calculate an $85,000 annual estimate, read why marginal and effective rates differ, or compare PAYG withholding with annual tax.
Rates are for the 2026–27 income year and an Australian resident individual. This guide does not cover every offset, family Medicare adjustment or residency situation. See source status and Payko's calculation scope.