'%3e%3cpath%20fill='%230052b4'%20d='M0%200h512v512H0z'/%3e%3cpath%20fill='%23eee'%20d='m154%20300%2014%2030%2032-8-14%2030%2025%2020-32%207%201%2033-26-21-26%2021%201-33-33-7%2026-20-14-30%2032%208zm222-27h47l-38%2027%2015-44%2014%2044zm7-162%207%2015%2016-4-7%2015%2012%2010-15%203v17l-13-11-13%2011v-17l-15-3%2012-10-7-15%2016%204zm57%2067%207%2015%2016-4-7%2015%2012%2010-15%203v16l-13-10-13%2011v-17l-15-3%2012-10-7-15%2016%204zm-122%2022%207%2015%2016-4-7%2015%2012%2010-15%203v16l-13-10-13%2011v-17l-15-3%2012-10-7-15%2016%204zm65%20156%207%2015%2016-4-7%2015%2012%2010-15%203v17l-13-11-13%2011v-17l-15-3%2012-10-7-15%2016%204zM0%200v32l32%2032L0%2096v160h32l32-32%2032%2032h32v-83l83%2083h45l-8-16%208-15v-14l-83-83h83V96l-32-32%2032-32V0H96L64%2032%2032%200Z'/%3e%3cpath%20fill='%23d80027'%20d='M32%200v32H0v64h32v160h64V96h160V32H96V0Zm96%20128%20128%20128v-31l-97-97z'/%3e%3c/g%3e%3c/svg%3e)
Income tax in Australia 2026
You pay nothing on the first AUD 18,200, then rates step through 16% (15% from July 2026), 30% and 37% before hitting 45% above AUD 190,000 — and the 2% Medicare levy rides on top of everything.
Skip private hospital cover while earning over AUD 97,000 (AUD 194,000 for families) and a Medicare levy surcharge of 1%–1.5% is added.
The tax year runs 1 July to 30 June — bracket changes land mid-calendar-year by design.
At a glance
- top rate
- 45% above AUD 190,000 (+2% Medicare levy)
- entry band
- 0% up to AUD 18,200
- tax year basis
- 1 July – 30 June
- filing deadline
- 31 October after the June year-end; agents get extensions
- residency basis
- Residents taxed on worldwide income
- regime flag
- Temporary residents exempt on foreign income
Rates
Resident income tax brackets (2025/26, July–June year)
| Band (AUD) | Rate on this band | Note |
|---|---|---|
| 0 – 18,200 | 0% | |
| 18,201 – 45,000 | 16% | 15% from 1 July 2026; 14% from 1 July 2027 (legislated) |
| 45,001 – 135,000 | 30% | |
| 135,001 – 190,000 | 37% | |
| Over 190,000 | 45% | Medicare levy of 2% applies on top of taxable income for most people — low-income relief and exemption categories exist |
Marginal rates apply within each band.
Non-resident brackets (2025/26)
| Band (AUD) | Rate on this band | Note |
|---|---|---|
| 0 – 135,000 | 30% | No tax-free threshold; no Medicare levy |
| 135,001 – 190,000 | 37% | |
| Over 190,000 | 45% |
Marginal rates apply within each band.
Thresholds & allowances
- Tax-free thresholdAUD 18,200
Residents only; a low-income tax offset shrinks bills further at modest incomes
- Redundancy exemptionAUD 13,100 + AUD 6,552 per completed year of service
Genuine redundancies, 2025/26 amounts; the excess is taxed as a termination payment at capped rates (30%, or 15% from age 60, up to AUD 260,000)
- Employee share schemesAUD 1,000 annual discount exemption
Startup employees can qualify for full tax-free treatment of the discount; deferral up to 15 years otherwise
- Small business offset8% of tax on unincorporated business income, max AUD 1,000
- Working-from-home deductionAUD 0.70 per hour fixed rate
Or actual costs with records; covers energy, phone, internet and consumables
Surcharges
- Medicare levy2%over All taxable income (low-income relief below about AUD 28,000)
- Medicare levy surcharge1% – 1.5%over Income above AUD 97,000 (AUD 194,000 families) without private hospital cover
Residency
Residency trigger
You are Australian-resident if you are domiciled there, reside there under ordinary concepts, or spend more than 183 days in the tax year (unless your usual home is clearly elsewhere). Temporary-visa holders are 'temporary residents' — taxed on Australian income but exempt on foreign income and gains.
Non-resident treatment
Non-residents pay tax from the first dollar at 30% (no tax-free threshold, no Medicare levy) on Australian-source income; investment income is mostly handled by final withholding instead.
Notes
- Negative gearing is allowed: rental property losses (including mortgage interest) offset salary and other income — a distinctive Australian planning feature.
- Losses from hobby-scale businesses cannot offset other income unless commerciality tests are met, and never when total income exceeds AUD 250,000.
- Working-holiday visitors pay a flat 15% on their first AUD 45,000 of Australian earnings; seasonal-programme workers pay a 15% final withholding.
- Becoming resident rebases your foreign assets to market value; ceasing residence triggers a deemed disposal of non-property assets unless you elect to keep them in the Australian net.
- Joint returns don't exist — everyone files individually.
- Employers withhold under the pay-as-you-go system; business and investment earners pay quarterly instalments, with the balance due after assessment.
FAQ
What is the top income tax rate in Australia?
45% on taxable income above AUD 190,000, plus the 2% Medicare levy — 47% all-in, or up to 48.5% if the Medicare levy surcharge applies for lack of private hospital cover.
How much can I earn tax-free in Australia?
AUD 18,200 as a resident, before the 16% bracket starts (15% from July 2026) — and offsets push the practical tax-free level higher for low earners. Non-residents get no tax-free threshold.
When is the Australian tax return due?
31 October following the 30 June year-end for self-lodgers; registered tax agents can lodge much later under their programme.
Do temporary residents pay Australian tax on foreign income?
No — temporary-visa holders are exempt on foreign income and foreign capital gains, paying Australian tax only on Australian-source income and their salary for work performed there. The 183-day test drives residence for everyone else.
Figures: tax year 2025/26 (July–June basis), compiled from public sources. Not tax advice.