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.
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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.