Most Australian residents pay no income tax on the first $18,200 they earn. This page covers what the threshold is worth per pay cycle, how to claim it, why the point where tax actually starts is closer to $22,866, what to do when you have two jobs, and the part-year rule.
$18,200 for 2026-27About $350 a weekNo tax payable until ~$22,866
What the threshold is worth per pay cycle
Payers spread the threshold across your pay cycle rather than giving it to you as a lump at the start of the year. That's why a low-paid part-time job can have no tax withheld at all.
Pay cycle
Tax-free amount
Weekly
$350
Fortnightly
$700
Monthly
$1,517
Full income year
$18,200
Where tax actually starts
The $18,200 figure is the statutory threshold, not the point where you start paying. Two other rules sit on top of it:
Low income tax offset (LITO). Worth up to $700, it reduces the tax you owe — so the tax on the first slice of income above $18,200 is wiped out entirely. No income tax is payable until roughly $22,866.
Medicare levy. Charged separately from income tax, and it has its own low-income thresholds — for a single person it doesn't begin to phase in until $28,011.
LITO is non-refundable: it can reduce your tax to zero but never produces a refund on its own. It also tapers away as income rises, which is why the effective threshold doesn't keep drifting upward at higher incomes.
Claiming it — and the two-jobs trap
You claim the threshold at question 9 of the TFN declaration you give each payer — including Centrelink. Answer yes and that payer withholds less from every pay.
The trap is claiming it from more than one payer at the same time. Each payer that applies the threshold withholds as though $18,200 of your income is untaxed. Claim it twice and the same tax-free slice is applied twice across the year, so your total withholding falls short of your actual liability — and the shortfall arrives as a bill when you lodge.
The usual approach: claim it from the payer that pays you the most, and answer "no" for the others. If your circumstances change — a second job becomes your main one, for example — lodge a Withholding declaration (NAT 3093) with each payer to switch the answer.
The month you arrived counts as a full month. Someone who became a resident in April and stayed to 30 June is a resident for 3 months, giving a threshold of about $14,648. A full 12 months returns the whole $18,200.
If you weren't a resident at any point in the year, no threshold applies and every dollar of Australian income is taxed — from the first dollar at 30% for foreign residents, or 15% under the working holiday maker scale.
FAQ
What is the tax-free threshold in Australia?
The tax-free threshold is the amount you can earn each income year before income tax applies. For most Australian residents it is $18,200 — equivalent to roughly $350 a week, $700 a fortnight, or $1,517 a month. Income above it is taxed at 15% until the next bracket begins.
How much can I earn before paying tax?
More than the headline $18,200. The low income tax offset (LITO) — up to $700 — cancels out the tax owed on the first slice of income above the threshold, so no income tax is actually payable until about $22,866. The Medicare levy is separate again and doesn't begin to phase in for a single person until $28,011.
How do I claim the tax-free threshold?
You claim it at question 9 of the TFN declaration you give each payer — "Do you want to claim the tax-free threshold from this payer?". Answering yes means your payer withholds less from each pay. You can change your answer later by giving that payer a Withholding declaration (NAT 3093).
Can I claim the tax-free threshold from two jobs?
You can, but you usually shouldn't. Each payer that applies the threshold withholds as though $18,200 of your income is untaxed — claim it twice and the threshold is effectively applied twice across the year, so not enough tax is withheld overall and you get a bill at lodgment. The standard approach is to claim it from the payer that pays you the most, and not from the others.
What is the tax-free threshold if I only lived in Australia part of the year?
A part-year threshold applies. It has two components: a flat $13,464 plus up to $4,736 pro-rated by the number of months you were an Australian resident, counting the month you arrived. Someone who became a resident in April, for example, is a resident for 3 months and gets about $14,648.
Do foreign residents and working holiday makers get the tax-free threshold?
No. A foreign resident for the full income year can't claim it at all — tax applies from the first dollar of Australian income at 30%. Working holiday makers (subclass 417 and 462) are taxed under their own rate scale that also starts at the first dollar, at 15%.
Does the tax-free threshold apply to Centrelink payments?
Yes — Centrelink is a payer like any other, and taxable payments count towards your income. You give Centrelink a TFN declaration and choose there whether to claim the threshold. If you receive both a taxable Centrelink payment and wages, the same "claim it from your main payer" logic applies.
Tax Accuracy & Sources
Reviewed: March 2026 · Tax year: 2026-27
Reference page for the Australian tax-free threshold at 2026-27 rates — the threshold amount, pay-cycle equivalents, LITO interaction, multiple payers, and the part-year rule. For tax on a specific salary, use the Income Tax Calculator.