In this guide
The Australian Tax Office (ATO) collects income tax from working Australians each financial year. In Australia, financial years run from 1 July to 30 June the following year, so we are currently in the 2025–26 financial year (1 July 2025 to 30 June 2026).
The income tax brackets and rates for Australian residents for both this financial year and the previous financial year are listed below.
Income tax rates for 2024–25 and 2025-26 (Australian residents)
| Income thresholds | Rate | Tax payable on this income |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,638 plus 45c for each $1 over $190,000 |
Note: The above amounts do not include Medicare Levy or the impact of tax offsets such as the Low Income Tax Offset (LITO).
SuperGuide has many guides that can help you reduce your tax and simultaneously boost your super.
- How LISTO works (Low Income Superannuation Tax Offset)
- How to boost your spouse’s super balance (including calculator)
- Tax-saving strategies only available to SMSFs
- Webinar: The recontribution strategy: Opportunities and strategies to get the best outcomes
- Reducing tax on capital gains with super contributions
- How the government co-contribution scheme works (including calculator)
- How carry-forward (catch-up) super contributions work
- Tax-saving strategies for SMSF pensions
- Managing capital gains tax in your SMSF
- Salary sacrifice and super: How does it work?
- Super recontribution strategy: How it works (including calculator)
- Case study: How to reduce tax on your TPD payments from super
- Dual pension strategy: Reducing super death benefits tax for non-dependants
Try SuperGuide’s income tax calculator to discover your effective tax rate.
Over the last few years both the Coalition and Labor governments have announced income tax cuts that have been applied in stages since 2018, and more are come into effect from 1 July 2026.
This financial year is one of the few in recent times where the income tax brackets or rates have not changed, although you may see a change in base income if your wage includes super, due to the increase in the Super Guarantee from 11.5% to 12%.
A summary of the income tax changes from 2018-19 is below.
- Stage 1 (2018–19 to 2019–20): A new temporary LMITO to a maximum of $1,080, operating in addition to the existing Low Income Tax Offset (LITO)
- Stage 2 (2020–21 onwards): Retaining LMITO ($1,080 for 2020–21 and $1,500 for 2021–22 only), increasing LITO from $455 to a maximum of $700, raising the upper threshold for the 19% tax bracket from $37,000 to $45,000, changing the 32.5% tax bracket from $37,001–$90,000 to $45,001–$120,000 and raising the lower threshold for the 37% tax bracket from $90,001 to $120,001
- Stage 3 (2024–25 onwards): Lowering the bottom tax rate from 19% to 16%, decreasing the 32.5% rate to 30%, raising the 37% lower threshold from $120,000 to $135,000 and raising the 45% lower threshold from $180,000 to $190,000
The phasing of the tax rate changes from 2016–17 onwards (for Australian residents) is set out in the following table.
Tax rate changes – Australian residents
| 2016–17 and 2017–18 | 2018–19 and 2019–20 | 2020–21*, 2021–22**, 2022–23 and 2023–24 | From 2024–25 |
|---|---|---|---|
| Taxable income Tax rate | Taxable income Tax rate | Taxable income Tax rate | Taxable income Tax rate |
| $0 to $18,200 Nil | $0 to $18,200 Nil | $0 to $18,200 Nil | $0 to $18,200 Nil |
| $18,201–$37,000 19% for amounts over $18,200 | $18,201–$37,000 19% for amounts over $18,200 | $18,201–$45,000 19% for amounts over $18,200 | $18,201–$45,000 16% for amounts over $18,200 |
| $37,001–$87,000 $3,572 + 32.5% for amounts over $37,000 | $37,001–$90,000 $3,572 + 32.5% for amounts over $37,000 | $45,001–$120,000 $5,092 + 32.5% for amounts over $45,000 | $45,001–$135,000 $4,288 + 30% for amounts over $45,000 |
| $87,001–$180,000 $19,822 + 37% for amounts over $87,000 | $90,001–$180,000 $20,797 + 37% for amounts over $90,000 | $120,001–$180,000 $29,467 + 37% for amounts over $120,000 | $135,001–$190,000 $31,288 + 37% for amounts over $135,000 |
| $180,001 and over $54,232 + 45% for amounts over $180,000 | $180,001 and over $54,097 + 45% for amounts over $180,000 | $180,001 and over $51,667 + 45% for amounts over $180,000 | $190,001, and over $51,637 + 45% for amounts over $190,000 |
| LITO maximum: $445 | LITO maximum: $445 | LITO maximum: $700 | LITO maximum: $700 |
| LMITO maximum: $1,080 | LMITO maximum: $1,080*, $1,500** |
Source: Treasury
*2020–21 and **2021–22 only
Tax cuts from 1 July 2024
The table below lists the approximate tax cut for various income levels from 1 July 2024 compared to previous years.
| Income | 2023-24 tax paid | 2024-25 tax paid | Tax cut |
|---|---|---|---|
| $20,000 | $342 | $288 | $54 |
| $30,000 | $2,242 | $1,888 | $354 |
| $40,000 | $4,142 | $3,488 | $654 |
| $50,000 | $6,717 | $5,788 | $929 |
| $60,000 | $9,967 | $8,788 | $1,179 |
| $70,000 | $13,217 | $11,788 | $1,429 |
| $80,000 | $16,467 | $14,788 | $1,679 |
| $90,000 | $19,717 | $17,788 | $1,929 |
| $100,000 | $22,967 | $20,788 | $2,179 |
| $110,000 | $26,217 | $23,788 | $2,429 |
| $120,000 | $29,467 | $26,788 | $2,679 |
| $130,000 | $33,167 | $29,788 | $3,379 |
| $140,000 | $36,867 | $33,138 | $3,729 |
| $150,000 | $40,567 | $36,838 | $3,729 |
| $160,000 | $44,267 | $40,538 | $3,729 |
| $170,000 | $47,967 | $44,238 | $3,729 |
| $180,000 | $51,667 | $47,938 | $3,729 |
| $190,000 | $56,167 | $51,638 | $4,529 |
| $200,000 | $60,667 | $56,138 | $4,529 |
Note: The above amounts do not include Medicare Levy or the impact of tax offsets such as the Low Income Tax Offset (LITO).
In the March 2025 Federal Budget, two new income tax cuts were announced to commence from 1 July 2026 and 1 July 2027. These cuts have now been legislated.
The changes announced are:
- From 1 July 2026, the 16% tax rate, which applies to taxable income between $18,201 and $45,000, would be reduced to 15%
- From 1 July 2027, this tax rate would be further reduced to 14%.
For any worker earning more than $45,000 this equates to a tax cut of $268 in 2026-27 and $536 per year from 2027-28, compared to 2024-25 tax rates.
Continue reading to learn how Australian income tax is calculated including offsets, levies, surcharges and that may reduce or increase your income tax.
- How income tax is calculated
- Tax offsets and deductions
- What is included in assessable income?
- What deductions are you allowed?
- What is taxable income?
- Income tax offsets, levies, and surcharges
- Low Income Tax Offset (LITO)
- Low and Middle Income Tax Offset (LMITO)
- Seniors and Pensioners Tax Offset (SAPTO)
- Medicare Levy
- Medicare Levy surcharge
- Lifetime Health Cover loading
- Private Health Insurance Offset
Note: Special rules apply to income earned by those under 18 years old, who may pay tax at a higher rate on certain types of income such as a distribution from a family trust.
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