Australian Tax Brackets 2025-26: The Definitive Guide
The 2025-26 financial year cements the Stage 3 tax cuts and introduces a critical milestone for retirement savings. Here is the authoritative breakdown of your obligations and opportunities.
Table of Contents
Executive Summary: FY 2025-26
- Tax Rates Stable: The "Stage 3" brackets (16%, 30%, 37%, 45%) remain in full effect.
- Super Increases: The Superannuation Guarantee hits 12% on 1 July 2025.
- Foreign Residents: No tax-free threshold; rates start at 30% from the first dollar.
Fiscal Year 2026 (FY26) represents a period of legislative stability for income tax, allowing Australians to plan with certainty. However, the interplay between the 12% Superannuation Guarantee and the Medicare Levy thresholds means your take-home pay calculation requires precision.
Visual Breakdown: 2025-26 Tax Brackets
Tax Free
$0 - $18,200
Base Rate
$18,201 - $45,000
Standard
$45,001 - $135,000
Upper
$135,001 - $190,000
Top
$190,000+
Resident Tax Rates
| Taxable Income | Tax Payable |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 + 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 + 45c for each $1 over $190,000 |
Medicare Levy & Surcharge
Standard Levy
Most residents pay 2% of their taxable income to fund the public health system. Low-income earners may be eligible for a reduction or exemption.
Levy Surcharge
High earners without private hospital cover pay an extra 1% to 1.5%. This is strictly a tax to encourage private insurance uptake.
Medicare Levy Surcharge (MLS) Thresholds
| Tier | Single Income | Family Income | Surcharge |
|---|---|---|---|
| Base Tier | Below $97,000 | Below $194,000 | 0% |
| Tier 1 | $97,001 - $111,000 | $194,001 - $222,000 | 1.0% |
| Tier 2 | $111,001 - $151,000 | $222,001 - $302,000 | 1.25% |
| Tier 3 | Over $151,000 | Over $302,000 | 1.5% |
HELP & STSL Repayments
If you have a Higher Education Loan Program (HELP) debt, repayments are compulsory once your income exceeds the minimum repayment threshold. For FY26, these are the estimated rates:
| Repayment Income (RI) | Repayment Rate |
|---|---|
| Below $54,435 | Nil |
| $54,435 - $62,850 | 1.0% |
| $62,851 - $66,620 | 2.0% |
| $83,895 - $89,290 | 5.0% |
| $113,268 - $120,465 | 8.0% |
| $159,664 and above | 10.0% |
*Thresholds are indexed annually. Rates shown are estimates based on CPI trends.
Foreign Resident Rates
Critical distinction: Foreign residents for tax purposes do not receive the tax-free threshold.
| Taxable Income | Tax Payable |
|---|---|
| $0 – $135,000 | 30c for each $1 |
| $135,001 – $190,000 | $40,500 + 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 + 45c for each $1 over $190,000 |
The 12% Superannuation Milestone
Final Scheduled Increase
From 1 July 2025, the Super Guarantee (SG) rises to 12%. This completes the legislative roadmap for superannuation increases.
Salary Impact Scenarios
Base + Super Package
Take-home pay remains steady; Employer pays more.
Total Remuneration Package (TRP)
Take-home pay decreases by ~0.5%.
Real-World Scenarios
The "Average" Earner
Sarah, Marketing Manager
High Income Earner
David, Software Engineer
Strategic Implications for FY26
Salary Packaging
With the 12% Super rate, employees on "Total Remuneration" packages should review their contracts. The 0.5% increase will likely reduce cash salary unless renegotiated.
Tax Planning
The top bracket threshold remains at $190,000. For high income earners, maximizing concessional super contributions (capped at $30,000) remains a key strategy to reduce tax.
Frequently Asked Questions
What is the tax-free threshold for 2025-26?
Does the 12% super increase reduce my take-home pay?
When do I pay the Medicare Levy Surcharge?
Data Sources & Methodology
Tax Rates: Calculations and tables are based on the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024 and official ATO withholding schedules.
Superannuation: Rates reflect the legislated schedule in the Superannuation Guarantee (Administration) Act 1992.
Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Tax laws are subject to change. Please consult a qualified tax professional for your specific circumstances.
Model Your FY26
Don't rely on estimates. Use our institutional-grade calculator to see your exact take-home pay, tax, and super split.
Launch CalculatorIncludes Medicare, HELP & MLS logic
Expert Review
Numberz Tax Team
Chartered Accountants & Tax Researchers