Australian Marginal Tax Rates 2025-26 & 2026-27
Find your marginal tax rate and see exactly how your income is taxed across each bracket. Your marginal rate is the tax you pay on each additional dollar earned.
Enter your annual taxable income (before tax). This is your gross income minus deductions.
Enter your taxable income to see your marginal tax rate.
Australia uses a progressive tax system — you pay different rates on different portions of your income, not a single rate on the entire amount.
| Taxable income | Tax rate | Tax on this income |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | 16 cents for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,288 plus 30 cents for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 plus 37 cents for each $1 over $135,000 |
| $190,001 and over | 45% | $51,638 plus 45 cents for each $1 over $190,000 |
Plus: Medicare levy of 2% applies to most taxpayers on all taxable income. Add 2% to find your effective marginal rate.
From 1 July 2026 (2026-27): the second bracket falls from 16% to 15%, so income between $18,201 and $45,000 is taxed at 15c per $1 — worth up to $268 a year. See the 2025-26 vs 2026-27 brackets side-by-side →
Your marginal tax rate is the rate of tax applied to your last (or next) dollar of income. It's the rate you pay on income at the top of your earnings — not on all your income.
Example: $100,000 income
Total income tax: $20,788 | Marginal rate: 30% (+2% Medicare = 32%) | Average rate: 20.79%
Notice that even though you're "in the 30% bracket", you don't pay 30% on all your income. The first $18,200 is tax-free, and the next portion is taxed at only 16%.
Marginal rate
Tax on your next dollar of income.
Use for: deduction value, salary sacrifice decisions, bonus tax.
Average rate
Total tax divided by total income.
Use for: understanding your overall tax burden as a percentage of income.
Key insight: Your average rate is always lower than your marginal rate because of the tax-free threshold and lower brackets that apply first.
Your effective (average) rate is total income tax divided by total income. Because Australia taxes each income slice at a different rate, your effective rate is always well below your marginal rate — and the gap is largest at moderate incomes where the tax-free threshold has the biggest proportional impact.
| Taxable income | Income tax | Effective rate | Marginal rate | Marginal + Medicare |
|---|---|---|---|---|
| $30,000 | $1,770 | 5.9% | 15% | 17% |
| $45,000 | $4,020 | 8.9% | 15% | 17% |
| $60,000 | $8,520 | 14.2% | 30% | 32% |
| $80,000 | $14,520 | 18.1% | 30% | 32% |
| $100,000 | $20,520 | 20.5% | 30% | 32% |
| $135,000 | $31,020 | 23.0% | 30% | 32% |
| $150,000 | $36,570 | 24.4% | 37% | 39% |
| $190,000 | $51,370 | 27.0% | 37% | 39% |
| $250,000 | $78,370 | 31.3% | 45% | 47% |
Income tax only (before offsets such as LITO), without Medicare levy. Add 2% to each "effective rate" cell to get total average burden including Medicare. Notice that even at $250,000 — the 45% marginal bracket — the effective rate is only 31.5%, because the first $135,000 is taxed at lower rates.
The current tax brackets reflect the Stage 3 tax cuts that took effect from 1 July 2024. These rates remain unchanged for 2025-26.
What is a marginal tax rate?
What are the tax brackets for 2025-26?
What is the difference between marginal and average tax rate?
Does Medicare levy affect my marginal rate?
Why does my marginal rate matter for tax planning?
What is the highest marginal tax rate in Australia?
What is the effective tax rate on a $100,000 income in Australia?
EOFY 2026 tools: EOFY action plan, tax refund calculator, EOFY checklist, EOFY countdown
Tax Accuracy & Sources
Calculates marginal and average tax rates based on 2025-26 Australian resident tax brackets and Medicare levy. It does not include offsets, surcharges, non-resident rates, or income-specific concessions.