Australian tax brackets 2026-27, explained
From 1 July 2026 the second bracket drops from 16% to 15%, worth up to $268 a year, with another cut to 14% already legislated for 2027-28. Here is the full picture.
Resident tax brackets 2026-27
| Taxable income | Rate | Tax on the band |
|---|---|---|
| $0 to $18,200 | 0% | nil (tax-free threshold) |
| $18,201 to $45,000 | 15% | up to $4,020 |
| $45,001 to $135,000 | 30% | up to $27,000 |
| $135,001 to $190,000 | 37% | up to $20,350 |
| Over $190,000 | 45% |
The offsets and levies on top
The low income tax offset (up to $700) wipes out tax for incomes under about $22,900 and phases out entirely by $66,667. The Medicare levy adds 2% for most people, with shading relief at low incomes. If you earn above the surcharge threshold without private hospital cover, the Medicare levy surcharge adds 1-1.5% more.
Marginal vs average: what you actually pay
At $80,000 you are in the 30% bracket, but your average rate is only about 20%: tax of $14,520 plus $1,600 Medicare leaves $63,880 after tax. The bracket rate only applies to your next dollar, useful to know when weighing overtime or extra shifts.
Super changes the picture
Employers pay 12% superannuation on top of these figures. Salary-sacrificing extra super is taxed at 15% in the fund instead of your marginal rate, for someone in the 30% bracket that is a 17-point saving (30% tax plus 2% Medicare against 15%), within the concessional cap.
Already legislated: 2027-28
The same band falls to 14% from 1 July 2027, a further $268 a year. No action needed; withholding tables adjust automatically.
Exact figures for your salary, including HELP repayments and residency status, are in the pay calculator; sources on the methodology page.
Frequently asked questions
What changed in the Australian tax brackets for 2026-27?
The second tax bracket dropped from 16% to 15% from 1 July 2026, saving up to $268 a year for most earners. The same band is already legislated to fall to 14% in 2027-28.
What is the low income tax offset for 2026-27?
The low income tax offset (LITO) provides up to $700 of relief. It phases out entirely at $66,667 of income, which means incomes under roughly $22,900 pay no income tax after the offset is applied.
What is the difference between my marginal tax rate and my average tax rate?
Your marginal rate is what you pay on your next dollar of income. Your average rate is total tax divided by total income and is always lower. Only the marginal rate matters when weighing overtime, extra shifts or salary sacrifice.
Sources: Treasury Laws Amendment (More Cost of Living Relief) Act 2025; ATO 2026-27 schedules. Last updated 2026-11-04.