Australia Tax Rates and Thresholds 2025-2026 Guide
the Australian tax rates and thresholds for the 2025-2026 income year. The guide covers: the personal income tax rates and the brackets (the "2025-2026 year") — the Australian tax rates for the resident individuals for the 2025-2026 year: (a) the "tax-free threshold" at $0 to $18,200 (the "0% rate"), (b) the "16% rate" at $18,201 to $45,000, (c) the "30% rate" at $45,001 to $135,000, (d) the "37% rate" at $135,001 to $190,000, (e) the "45% rate" at $190,001 and above; the tax rates include the "Stage 3 tax cuts" (the "from July 2024" — the "19% bracket reduced to 16%" and the "32.5% bracket reduced to 30%"); the Medicare levy and the Medicare levy surcharge (the "MLS") — the Medicare levy at 2% of the taxable income (the "with the lower-income exemptions"); the Medicare levy surcharge at 1% to 1.5% for the singles above $93,000 and the families above $186,000 without the appropriate private health insurance; the corporate tax rates (the "company tax rates") — the "base rate entity (the BRE)" with the aggregated turnover below $50 million pays the 25% rate; the "large company" with the turnover above $50 million pays the 30% rate; the capital gains tax rates — the capital gains are included in the assessable income and taxed at the "marginal rates"; the "50% CGT discount" for the Australian residents (the "12-month holding"); the "CGT discount of 33.33%" for the super funds.
Personal Income Tax Brackets 2025-2026
- Taxable income thresholds: The 2025-2026 income year tax brackets: (a) $0 to $18,200 — the "tax-free threshold" at 0%, (b) $18,201 to $45,000 — the "16 cents per dollar" over $18,200 (the "maximum tax of $4,288"), (c) $45,001 to $135,000 — the "$4,288 plus 30 cents per dollar" over $45,000 (the "maximum tax of $31,288"), (d) $135,001 to $190,000 — the "$31,288 plus 37 cents per dollar" over $135,000 (the "maximum tax of $51,638"), (e) $190,001 and above — the "$51,638 plus 45 cents per dollar" over $190,000.
- Tax-free threshold: The "tax-free threshold" of $18,200 means the resident individual pays "no tax" on the first $18,200 of the taxable income. The "non-resident" does NOT have the tax-free threshold and pays the tax from the "first dollar" at the 32.5% rate (the "up to $135,000") then the 37% and the 45% rates. The "working holiday maker" pays the tax at the "15% rate on the first $45,000" (the "no tax-free threshold").
- Low-Income Tax Offset (LITO): The "LITO" reduces the tax payable for the low-income earners. The maximum LITO is the "$700" for the taxable income up to $45,000. The LITO phases out at the rate of "5 cents per dollar" from $45,001 to $66,667. The LITO is the "non-refundable offset" (the "cannot reduce the tax below zero").
For the tax offsets and the credits, see our Tax Offsets Guide →.
Medicare Levy and the Surcharge Thresholds
- Medicare levy rate: The Medicare levy is the "2% of the taxable income". The "low-income threshold" for the Medicare levy exemption: the singles at $24,276, the families at $40,939 (the "plus $3,757 for each dependent child"), the seniors and the pensioners at $38,365. The levy applies at the "reduced rate" for the income between the low-income threshold and the "phase-in limit" (the "10% of the income above the threshold").
- MLS thresholds: The Medicare levy surcharge (the "MLS") thresholds for the 2025-2026 year: the singles — (a) Tier 1 at $93,001 to $108,000 (the "1% surcharge"), (b) Tier 2 at $108,001 to $144,000 (the "1.25% surcharge"), (c) Tier 3 at $144,001 and above (the "1.5% surcharge"); the families — the thresholds are the "doubled" (the "$186,000 for the Tier 1 base" plus the "$1,500 for each dependent child after the first"). The MLS applies only if the taxpayer and the dependants do NOT have the "appropriate private hospital cover".
For the Medicare levy and the MLS exemptions, see our Medicare Levy Guide →.
Corporate Tax and the Other Rates
- Base rate entity: The "base rate entity (the BRE)" with the "aggregated turnover below $50 million" and the "passive income (the base rate entity passive income — the BREPI) below 80%" pays the 25% corporate tax rate. The BRE with the BREPI at 80% or above pays the 30% rate. The large company with the "aggregated turnover above $50 million" pays the 30% rate regardless of the passive income level.
- Super fund tax rates: The superannuation fund pays the 15% tax rate on the "concessional contributions" (the "employer SG and the salary sacrifice") and the "investment earnings" in the "accumulation phase". The pension phase earnings are "tax-free" (the "0% rate"). The "Division 293 tax" imposes the "additional 15%" on the concessional contributions for the individuals with the income above $250,000.
- Other key rates: The "fringe benefits tax (the FBT)" at the 47% rate (the "highest marginal rate plus the Medicare levy"). The "goods and services tax (the GST)" at the 10% rate. The "luxury car tax (the LCT)" at the 33% rate on the value above the $89,332 threshold (the "2025-2026 year"). The "wine equalisation tax (the WET)" at the 29% rate.
For the corporate tax and the company structure, see our Corporate Tax Guide →.