How this calculator works

Australia taxes residents on a sliding scale. You pay nothing on the first $18,200 of taxable income, then higher rates on each band above that. The rates themselves are only part of the story. The 2% Medicare levy, the low income tax offset, study loan repayments and, from 2026-27, a $1,000 standard deduction for work-related expenses all change what you actually pay.

The Never Lose Interest tax calculator applies the official ATO resident rates for 2025-26 and 2026-27. This explainer shows how those rates work, with a worked example you can check by hand. If you want the payday view, including HELP withholding and super, use the Never Lose Interest pay calculator.

This is general information only. It is not personal advice or tax advice, and it does not take into account your objectives, financial situation or needs. The calculator estimates tax on the taxable income you enter. Your assessment can differ once deductions, offsets and other income are applied.

What are the income tax rates for 2025-26 and 2026-27?

Use these rates if you were an Australian resident for tax purposes for the full year and you are entitled to the full tax-free threshold. They come from the ATO's resident tax rates page, last updated 13 August 2026. They do not include the Medicare levy of 2%.

Resident tax rates 2025-26

Taxable income Tax on this income
$0 to $18,200 Nil
$18,201 to $45,000 16c for each $1 over $18,200
$45,001 to $135,000 $4,288 plus 30c for each $1 over $45,000
$135,001 to $190,000 $31,288 plus 37c for each $1 over $135,000
$190,001 and over $51,638 plus 45c for each $1 over $190,000

Resident tax rates 2026-27

Taxable income Tax on this income
$0 to $18,200 Nil
$18,201 to $45,000 15c for each $1 over $18,200
$45,001 to $135,000 $4,020 plus 30c for each $1 over $45,000
$135,001 to $190,000 $31,020 plus 37c for each $1 over $135,000
$190,001 and over $51,370 plus 45c for each $1 over $190,000

The thresholds are the same in both years. The only rate change is in the $18,201 to $45,000 band, which falls from 16% to 15% on 1 July 2026. That cut, and a further cut to 14% from 1 July 2027, is law under the Treasury Laws Amendment (More Cost of Living Relief) Act 2025. The 30%, 37% and 45% rates do not change.

How do tax brackets work in Australia?

The brackets are slices, not a single switch. If your taxable income is $60,000 in 2026-27, you do not pay 30% on the whole $60,000. You pay:

  • nothing on the first $18,200
  • 15% on the $26,800 between $18,201 and $45,000, which is $4,020
  • 30% on the $15,000 above $45,000, which is $4,500

Income tax is $8,520, before the Medicare levy and any offsets. That is the same worked method the government's Moneysmart website uses for a $60,000 income in 2026-27.

Your marginal rate is the rate on the last dollar you earned. At $60,000 that is 30%. Your average rate is lower, because earlier dollars were taxed at 0% and 15%. In this example the average income tax rate, before the levy, is $8,520 divided by $60,000, or 14.2%.

A pay rise that pushes you into a higher bracket only applies the new rate to the dollars above the threshold. It does not increase the tax on the income below it.

How do I calculate my income tax?

Follow the same order the tax system uses.

1. Work out taxable income. Start with assessable income (salary, interest, dividends, net rental income, taxable capital gains and so on). Subtract allowable deductions. The result is taxable income. A tax calculator that only asks for your salary is assuming that salary is your taxable income.

2. Apply the rates for the correct year. Use the 2025-26 table for income years ending 30 June 2026, and the 2026-27 table for the year ending 30 June 2027. The year is determined by when you earned the income, not by when you lodge.

3. Subtract non-refundable offsets. The main one for lower and middle earners is the low income tax offset (LITO). If your taxable income is $37,500 or less, LITO is $700. Between $37,501 and $45,000 it is $700 minus 5 cents for every dollar above $37,500. Between $45,001 and $66,667 it is $325 minus 1.5 cents for every dollar above $45,000. It then falls to zero. LITO can reduce your tax to $0. It cannot create a refund on its own, and unused amounts are not paid out. The ATO applies it when you lodge.

4. Add the Medicare levy. Most residents pay 2% of taxable income. Lower-income earners may pay a reduced levy, or none. For 2025-26, the ATO's single thresholds (other than seniors and pensioners entitled to SAPTO) are $28,011 (no levy) and $35,013 (reduction available up to this amount). In that range, the ATO's published example is consistent with a 10% levy on income above $28,011, until the levy reaches 2%. SAPTO thresholds in 2025-26 are $44,268 and $55,335. As at mid-November 2026 the ATO had not published a separate 2026-27 reduction table on that page, so check the official thresholds for the year you are calculating.

You may also pay the Medicare levy surcharge if you do not have appropriate private patient hospital cover and your surcharge income is above the threshold. The ATO's 2026-27 single tiers start above $105,000, $123,000 and $164,000, at 1%, 1.25% and 1.5%. Family thresholds are $210,000, $246,000 and $328,000, plus $1,500 for each surcharge dependant after the first child. The 2025-26 single base threshold was $101,000. Surcharge income includes reportable fringe benefits, net investment losses and reportable super contributions, not just taxable income. The Never Lose Interest guide to the Medicare levy and Medicare levy surcharge sets out the official thresholds, the income test and what counts as appropriate hospital cover.

5. Add any compulsory study loan repayment. HELP and other study and training loans are not income tax, but they are assessed with your return. From 2025-26 they use marginal rates on repayment income, which is broader than taxable income. The minimum threshold is $67,000 in 2025-26 and $69,528 in 2026-27. Details are in the Never Lose Interest pay calculator and HELP repayment explainers.

The amount you owed for the year is then compared with the PAYG tax already withheld, and with any other credits. The difference is your refund or the amount you still have to pay.

Worked examples you can check

The figures below are for a full-year Australian resident entitled to the tax-free threshold, with no other offsets, no study loan and no Medicare levy surcharge. Super is assumed to be paid by the employer on top of salary, so it does not change taxable income.

$45,000 taxable income in 2026-27

  • Income tax: $4,020
  • LITO: $325 (that is $700 minus 5 cents times $7,500)
  • Tax after LITO: $3,695
  • Medicare levy at 2%: $900, because $45,000 is above the 2025-26 upper shade-in threshold of $35,013 (confirm the 2026-27 levy thresholds when the ATO publishes them)
  • Estimated tax and levy: $4,595

$80,000 taxable income in 2026-27

  • Income tax: $4,020 + 30% of $35,000 = $14,520
  • LITO: nil
  • Medicare levy: $1,600
  • Estimated tax and levy: $16,120
  • Average rate including the levy: 20.15%
  • Marginal rate, excluding the levy: 30% (32% if you include the levy)

In 2025-26, income tax on the same $80,000 was $14,788. The 1% cut on the $26,800 in the second band is worth $268.

$150,000 taxable income in 2026-27

  • Tax on income up to $135,000: $31,020
  • Tax on the $15,000 above $135,000 at 37%: $5,550
  • Income tax: $36,570
  • Medicare levy: $3,000
  • Estimated tax and levy: $39,570

If any of these people claimed the $1,000 standard deduction in 2026-27, and had no other deductions, taxable income would be $1,000 lower and the tax would be calculated on that reduced figure, at their marginal rate.

What deductions and offsets should I know about?

A calculator that ignores deductions will overstate tax if you have them, and understate tax if you have other assessable income.

Work-related expenses are the deductions most employees think of first. From 2026-27, a standard deduction is available for resident individuals who earn assessable labour income. The amount is the lesser of $1,000 and your labour income, reduced by the work-related deductions you otherwise claim. If you claim nothing itemised, you can still get up to $1,000. If your itemised work deductions already total $1,000 or more, the standard deduction is reduced to nil. You do not lose those itemised deductions. This is a floor, not a cap. The Never Lose Interest guide to work-related deductions and the standard deduction works through the official examples and the record-keeping changes from 1 July 2026. For the fixed-rate, actual cost, cents-per-kilometre and logbook methods, see working from home and car expenses.

Other common deductions include the cost of managing tax affairs, gifts to deductible gift recipients, and investment-related expenses. Investment losses, including net rental losses, reduce taxable income under the current rules, although negative gearing of many established residential properties will be quarantined from 1 July 2027. See how negative gearing works and the Never Lose Interest guide to the 2027 changes if that affects you.

Offsets reduce tax after it has been calculated. LITO is the main automatic offset for individuals. The seniors and pensioners tax offset has its own thresholds, which the ATO says change from 2026-27 as a result of the tax cuts, with no change to the maximum offset amounts. From 2027-28, a Working Australians Tax Offset of up to $250 is legislated for labour income. It does not apply to 2025-26 or 2026-27.

What is the difference between a tax calculator and a take-home pay calculator?

A tax calculator answers "how much income tax and levy will I owe on this taxable income?" A take-home pay calculator answers "how much of this salary will I keep, after withholding, the levy and any study loan repayment?" They should use the same tax rates, but they are built for different questions.

Use a tax calculator when you are looking at a tax return, a bonus, an investment gain or the effect of a deduction. Use a pay calculator when you are comparing job offers or checking a payslip. In both cases, put in the right year, and be clear about whether the number you typed is taxable income or a gross package that includes super.

Frequently asked questions

What is the tax-free threshold for 2026-27?

For a full-year Australian resident entitled to it, the tax-free threshold remains $18,200. It did not change with the 2025 or 2026 tax cuts. Those cuts reduced the rate above the threshold, not the threshold itself.

Do the rates include the Medicare levy?

No. The ATO publishes the income tax rates excluding the 2% Medicare levy. Most residents pay the levy on top, unless a reduction or exemption applies.

When does the 16% rate fall to 15%, and then to 14%?

The 16% rate applies in 2025-26. It becomes 15% from 1 July 2026 (the 2026-27 year) and 14% from 1 July 2027 (the 2027-28 year). Both later rates are already legislated.

Why is my refund different from the calculator?

The calculator is only as complete as the income and deductions you enter. PAYG already withheld, extra offsets, the private health insurance rebate, higher education loan repayments, and income the calculator did not include will all move the result. Your notice of assessment is the official figure.

What rate do foreign residents pay?

Foreign residents do not get the tax-free threshold and do not pay the Medicare levy. For 2025-26 the ATO rates are 30c for each $1 from the first dollar up to $135,000, then 37c up to $190,000, then 45c. As at November 2026 the ATO had not published a separate 2026-27 foreign resident table. Check the ATO page for the year that applies to you.

Will the 2027 CGT changes change my income tax rates?

No. The 1 July 2027 CGT reforms change how a capital gain is worked out, and they introduce a 30% minimum tax on certain real gains. They do not change the ordinary resident tax brackets in the tables above. If you realise a capital gain, that taxable gain (after any discount or indexation) is still counted in your taxable income, and the minimum tax can apply on top. See the Never Lose Interest guide to the 2027 CGT changes.

General information warning

This article, and the Never Lose Interest tax calculator, are general information only. They are not tax advice or personal financial product advice, and they do not take into account your objectives, financial situation or needs. Tax rates and thresholds can change, and some levy thresholds are published year by year. Consider seeking advice from a registered tax agent if you are unsure how the rules apply to you.

Sources

Last reviewed: November 2026.