Australia taxes residents on a progressive scale: the more you earn, the higher the rate on each extra dollar — but only the income inside each bracket is taxed at that bracket's rate. On top of income tax, most people pay a 2% Medicare levy, and the low income tax offset reduces tax for lower incomes.
Resident income tax rates, 2026-27
These are the rates for the 2026-27 financial year (1 July 2026 – 30 June 2027):
- $0 – $18,200: nil (the tax-free threshold)
- $18,201 – $45,000: 15c per $1 over $18,200
- $45,001 – $135,000: 30c per $1 over $45,000
- $135,001 – $190,000: 37c per $1 over $135,000
- $190,001 and over: 45c per $1 over $190,000
The 2025-26 year is identical except the $18,201–$45,000 band is taxed at 16% (it drops to 15% from 1 July 2026). All rates are for Australian tax residents.
The Medicare levy
Most residents pay a 2% Medicare levy on taxable income. Low-income earners pay a reduced levy or none, and higher earners without private hospital cover may also pay the Medicare levy surcharge (not included in the basic calculation).
The low income tax offset (LITO)
LITO reduces income tax by up to $700 for lower incomes, tapering out entirely above $66,667. It reduces income tax only — never below zero — and does not reduce the Medicare levy.
Superannuation is paid on top
Your employer pays the Superannuation Guarantee (12% in 2026-27) into your super fund. It isn't part of your take-home pay and isn't taxed at your marginal rate. If you want to put more into super and cut your tax, see what is salary sacrifice.
A worked example
On a $100,000 salary in 2026-27, an Australian resident pays income tax and the 2% Medicare levy, leaving roughly $77,480 take-home for the year. If you also have a study loan, see what is HECS-HELP debt, which is repaid on top.
Every income is different — the take-home pay calculator works out your exact net pay by year, month, fortnight or week.
Source: ATO resident tax rates and the Treasury Laws Amendment (More Cost of Living Relief) Act 2025. Verified for 2026-27.