Resident tax brackets
Rates below exclude the Medicare levy, which is shown separately.
| Taxable income | Tax on this income |
|---|
Questions people actually ask
What's the difference between marginal and average tax rate?+
Your marginal rate is what applies to your next dollar earned — the rate of the bracket your income currently sits in. Your average (effective) rate is your total tax divided by your total income, which is always lower than your marginal rate because earlier dollars were taxed at lower rates.
Did tax rates change for 2026-27?+
Yes. From 1 July 2026, the 16% bracket dropped to 15% as part of legislated "cost of living" tax cuts — everyone earning between $18,201 and $45,000 pays a slightly lower rate on that slice of income than in 2025-26. A further cut to 14% is legislated for 1 July 2027.
Does this include the Medicare levy?+
No. The Medicare levy (2% of taxable income for most residents, with low-income exemptions and a possible surcharge for higher earners without private hospital cover) is calculated separately.
How are foreign resident rates different?+
Foreign residents have no tax-free threshold — tax applies from the first dollar — and pay 30% up to $135,000, then the same 37% and 45% brackets as residents above that. Foreign residents also don't pay the Medicare levy.