Australia operates a progressive income tax system where higher incomes are taxed at higher marginal rates. Understanding how much tax is paid at different income levels helps individuals plan their finances and assess the impact of income changes on their after-tax position.
The Australian income tax brackets for 2025-26 apply marginal rates of 0 percent below the tax-free threshold, 16 percent from $18,201 to $45,000 following the Stage 3 tax cuts, 30 percent from $45,001 to $135,000, 37 percent from $135,001 to $190,000, and 45 percent above $190,000.
The Low Income Tax Offset reduces the tax payable for lower income earners, effectively raising the tax-free threshold for eligible individuals. The Medicare Levy of 2 percent applies to most taxable incomes above the low-income threshold.
ATO Taxation Statistics show the total tax collected and average tax rates across income brackets, providing a clear picture of how the tax burden is distributed across the Australian income spectrum.
Data sourced from ATO Taxation Statistics individual tables. Updated annually when new ATO statistics are released.