Tax Brackets
The income ranges that determine the rate of tax applied to each portion of your taxable income.
Tax brackets (also called tax scales) define the progressive rate structure used to calculate individual income tax in Australia. Each bracket specifies an income range and the tax rate that applies to income within that range. For 2026-27 (the current tax year), the brackets are: $0–$18,200 at 0%, $18,201–$45,000 at 15%, $45,001–$135,000 at 30%, $135,001–$190,000 at 37%, and $190,001+ at 45%.
The Stage 3 tax cuts, which took effect from 1 July 2024, significantly reshaped these brackets. The 19% bracket was reduced to 16%, the 32.5% bracket was reduced to 30%, and the $120,000 threshold was raised to $135,000. A further cut then reduced the second bracket from 16% to 15% from 1 July 2026. These changes provided a tax cut to every taxpayer earning above $18,200, with the largest absolute benefit going to those earning between $135,000 and $190,000.
Foreign residents (non-residents for tax purposes) have different brackets with no tax-free threshold — they pay 30% from the first dollar up to $135,000, then 37% to $190,000, and 45% above $190,000. Working holiday makers (visa subclass 417 and 462) also have a special rate of 15% on the first $45,000.
How it works
Tax brackets define the income ranges and rates used to calculate individual income tax progressively. For 2026-27, the brackets are $0–$18,200 at 0%, $18,201–$45,000 at 15%, $45,001–$135,000 at 30%, $135,001–$190,000 at 37%, and $190,001 and above at 45%. Each bracket only taxes the income that falls within its own range, which is why the brackets are sometimes shown as a stepped table rather than a single flat percentage.
In practice, the brackets show up whenever you're deciding whether an extra dollar of income, a deduction, or a super contribution is 'worth it' — the answer depends entirely on which bracket that dollar sits in. The current bracket structure reflects the Stage 3 tax cuts from 1 July 2024, which cut the 19% bracket to 16% and the 32.5% bracket to 30% while lifting the $120,000 threshold to $135,000, followed by a further cut of the second bracket from 16% to 15% from 1 July 2026.
Foreign residents use an entirely different set of brackets, with no tax-free threshold at all: 30% from the first dollar up to $135,000, then 37% to $190,000, and 45% above that. Working holiday makers on the relevant visa subclasses also get their own rate of 15% on the first $45,000 they earn. Mixing up which bracket table applies to your residency status is a common error, especially for people who become or stop being a resident partway through the year.
Example: applying the full bracket table to $200,000
On a taxable income of $200,000 in 2026-27, the calculation steps through every bracket in turn. The first $18,200 is tax-free. The $18,201–$45,000 slice ($26,800) is taxed at 15%, giving $4,020. The $45,001–$135,000 slice ($90,000) is taxed at 30%, giving $27,000.
The $135,001–$190,000 slice ($55,000) is taxed at 37%, giving $20,350. Finally, the remaining $10,000 above $190,000 is taxed at 45%, giving $4,500. Adding all five results together — $0, $4,020, $27,000, $20,350, and $4,500 — gives total income tax of $55,870, before the Medicare levy is added.
Calculate it yourself
Open calculator →Related Terms
Marginal Tax Rate
The rate of tax applied to each additional dollar of income — determined by the tax bracket your top dollar falls into.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.
Tax-Free Threshold
The first $18,200 of annual income that is not subject to income tax for Australian residents.
Effective Tax Rate
Your total tax as a percentage of your total income — the actual overall rate you pay after all brackets, offsets, and levies.
Foreign Resident Tax Rates
Tax rates for individuals who are not Australian residents for tax purposes — no tax-free threshold and different brackets.