The Australian Taxation Office (ATO) applies income tax using a progressive bracket system. Here are the official 2025-26 rates and all the key offsets that determine how much tax you actually pay.
ATO Individual Income Tax Rates 2025–26
| Taxable Income | Tax Rate | Tax Payable |
|---|---|---|
| $0 – $18,200 | Nil | $0 |
| $18,201 – $45,000 | 16% | 19c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 + 37c for each $1 over $135,000 |
| Over $190,000 | 45% | $51,638 + 45c for each $1 over $190,000 |
Source: ATO 2025–26. Does not include Medicare levy (2%) or Low Income Tax Offset.
Low Income Tax Offset (LITO) 2025–26
The Low Income Tax Offset reduces the tax payable for lower income earners:
- Maximum offset: $700
- Full offset: Incomes up to $37,500
- Phases out at 5 cents per dollar from $37,500 to $45,000
- Then phases out at 1.5 cents per dollar from $45,000 to $66,667
- Zero offset above $66,667
Low and Middle Income Tax Offset — Discontinued
The Low and Middle Income Tax Offset (LMITO) ended on 30 June 2022 and has not been replaced. The Stage 3 tax cuts which took effect from 1 July 2024 were designed in part as a replacement — cutting the 32.5% rate to 30% for incomes $45,001–$135,000.
Medicare Levy 2025–26
- Standard rate: 2.0% of taxable income
- Low income exemption: Below $26,000 (individual), $43,816 (family)
- Reduced levy: $26,001–$32,500 (individual)
- Medicare Levy Surcharge: Additional 1.0–1.5% if your income exceeds $93,000 and you don’t hold private hospital insurance
Resident vs Non-Resident Tax Rates
Non-residents of Australia for tax purposes pay a higher flat rate with no tax-free threshold:
- $0–$135,000: 30%
- $135,001–$190,000: 37%
- Over $190,000: 45%
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Disclaimer: General information only. Not financial advice. Always consult a licensed professional before making financial decisions.