Australia Income Tax Calculator 2026: Stage 3 Cuts, Brackets, and Take-Home Pay
How Australian income tax actually works in 2026 after the revised Stage 3 tax cuts came into effect July 1, 2024 — the four marginal brackets, the 2% Medicare levy, the Medicare Levy Surcharge, HECS repayments, and worked take-home pay examples for $50K-$200K incomes.
By FreeFinCalc Editorial · Updated April 9, 2026 · Australia 2025-26 financial year data
Australian income tax for 2025-26 uses the marginal bracket structure that came into effect July 1, 2024 after the revised Stage 3 tax cuts. The tax-free threshold is $18,200, the lowest bracket dropped from 19% to 16%, the second bracket of 30% now extends to $135,000, and the top 45% bracket starts at $190,000 (raised from $180,000). On top of income tax, every taxpayer pays a 2% Medicare levy unless they qualify for an exemption, and high-income earners without private hospital cover pay an additional Medicare Levy Surcharge of 1-1.5%. Combined with HECS-HELP repayments for graduates, the actual tax burden on a typical full-time worker is significantly higher than the headline brackets suggest.
Australian Tax Brackets 2025-26 (Resident)
The current marginal brackets after Stage 3 cuts. These apply to Australian tax residents only — non-residents have a different (higher) bracket structure with no tax-free threshold.
| Bracket | Taxable income | Marginal rate | Tax on bracket |
|---|---|---|---|
| 1 | $0 to $18,200 | 0% | Nil |
| 2 | $18,201 to $45,000 | 16% | Up to $4,288 |
| 3 | $45,001 to $135,000 | 30% | $4,288 + 30% over $45K |
| 4 | $135,001 to $190,000 | 37% | $31,288 + 37% over $135K |
| 5 | Above $190,000 | 45% | $51,638 + 45% over $190K |
Take-Home Pay by Income (2025-26)
Approximate annual take-home pay for an Australian resident, single, no HECS, with private health insurance (no MLS), after federal tax and the 2% Medicare levy. Numbers exclude any salary sacrifice into super.
| Gross salary | Income tax | Medicare levy | Take-home (year) | Take-home (week) |
|---|---|---|---|---|
| $50,000 | $5,788 | $1,000 | $43,212 | $831 |
| $60,000 | $8,788 | $1,200 | $50,012 | $962 |
| $80,000 | $14,788 | $1,600 | $63,612 | $1,223 |
| $100,000 | $20,788 | $2,000 | $77,212 | $1,485 |
| $120,000 | $26,788 | $2,400 | $90,812 | $1,746 |
| $150,000 | $36,838 | $3,000 | $110,162 | $2,118 |
| $200,000 | $56,138 | $4,000 | $139,862 | $2,690 |
| $250,000 | $78,638 | $5,000 | $166,362 | $3,199 |
Medicare Levy and Medicare Levy Surcharge
Most Australians pay a 2% Medicare levy on their taxable income, in addition to income tax. Low-income earners get a partial or full reduction (no levy under $26,000 for singles). High-income earners without complying private hospital cover pay an additional Medicare Levy Surcharge. The MLS is 1.0% for individuals earning $97,001-$113,000, 1.25% for $113,001-$151,000, and 1.5% for $151,001+. For many high earners, paying for basic private hospital cover ($1,500-$2,500 a year) is cheaper than the MLS would be — this is the main reason most middle-to-high income Australians take out private health insurance.
Stage 3 Cuts: What Changed in July 2024
The original Stage 3 tax cuts (legislated in 2018 by the Coalition government) would have created a single 30% bracket from $45,000 to $200,000, abolishing the 37% bracket entirely. The revised version that actually came into effect July 1, 2024 (under the Labor government) is more progressive: the 19% bracket dropped to 16% (helping low earners), the 32.5% bracket dropped to 30% (helping middle earners), but the 37% bracket was retained (instead of being abolished), and the threshold for the 45% bracket only rose from $180K to $190K instead of $200K. The net effect: most low and middle earners get a slightly bigger cut than the original plan, while the very highest earners get a smaller cut.
Common Deductions Australians Miss
Most Australian employees can claim several deductions on their tax return: 1) Work-from-home running expenses (67c per hour fixed rate method or actual cost method). 2) Self-education expenses related to current employment. 3) Tax agent fees (your accountant's bill is deductible next year). 4) Professional memberships and union fees. 5) Income protection insurance premiums (NOT life or trauma insurance). 6) Charitable donations to deductible gift recipients (DGRs). 7) Tools and equipment under $300 (immediate deduction) or depreciated above. 8) Motor vehicle expenses for work travel using cents-per-kilometre or logbook method. The ATO online tax return prefills most income data automatically, so the work is on the deduction side — keep receipts year-round.
Frequently Asked Questions
What are the Australian tax brackets for 2025-26?+
The Australian resident tax brackets after the Stage 3 cuts (effective July 1, 2024) are: 0% on the first $18,200 (tax-free threshold), 16% on $18,201 to $45,000, 30% on $45,001 to $135,000, 37% on $135,001 to $190,000, and 45% above $190,000. Plus a 2% Medicare levy applies on top of income tax for most taxpayers. These brackets apply to Australian tax residents — non-residents pay tax from the first dollar at 30% with no tax-free threshold.
How much tax do I pay on $100,000 in Australia?+
On a $100,000 salary in 2025-26 you pay approximately $20,788 in income tax plus $2,000 in Medicare levy, totalling $22,788 in tax. That leaves take-home pay of approximately $77,212 a year, or $1,485 a week, or $6,434 a month. This assumes no HECS-HELP debt and that you have private hospital cover (so no Medicare Levy Surcharge). With a HECS-HELP balance, your take-home would be reduced by approximately $9,200 a year under the new marginal repayment system.
What is the Medicare levy?+
The Medicare levy is a 2% tax on your taxable income that funds part of the public Medicare healthcare system. Most Australian residents pay it. There is a low-income exemption (no levy if your taxable income is below $26,000 for singles, with phase-in to the full 2% by about $32,500). Seniors and pensioners have higher exemption thresholds. The Medicare levy is in addition to income tax, not instead of it. High-income earners without private hospital insurance also pay the Medicare Levy Surcharge of 1.0%-1.5% on top.
When is the Australian tax filing deadline?+
Most individual taxpayers must lodge their tax return by October 31 of each year for the previous financial year (which runs July 1 to June 30 in Australia). So the 2024-25 tax return is due October 31, 2025. If you use a registered tax agent and are on their client list before October 31, you usually get an extended deadline of mid-March or May the following year. Late lodgement can attract a $313 penalty for the first 28 days, rising for further delays. The fastest way to lodge is through myGov or a tax agent, with most refunds processed within 2 weeks.
How do I get a tax refund in Australia?+
You receive a tax refund when the tax withheld from your pay during the year (PAYG withholding) exceeds your final calculated tax liability for the year. Common reasons for refunds: work-related deductions (uniforms, tools, professional development, work from home), tax offsets (Low and Middle Income Tax Offset until 2023, low income offset), franking credits from Australian share dividends, or having multiple jobs where each employer withheld at the wrong rate. Lodge your tax return through myGov (free) or use a tax agent ($100-$300 fee, deductible next year). Refunds are typically paid by direct deposit within 2 weeks.
What is the tax-free threshold in Australia?+
The tax-free threshold is $18,200 for Australian residents. You pay no income tax on the first $18,200 you earn. You can claim the tax-free threshold from only one employer at a time — typically your highest-paying job. If you claim it from multiple employers, both will reduce your tax withholding by the threshold amount, leading to a tax debt at year-end. Non-residents do not get the tax-free threshold and pay 30% from the first dollar of Australian-sourced income.
Are capital gains taxed at the same rate as income?+
Capital gains in Australia are added to your taxable income and taxed at your marginal rate, but with a critical 50% discount for individuals on assets held longer than 12 months. So a $20,000 capital gain on a share you held for 2 years becomes $10,000 of assessable income, taxed at your marginal rate. The 50% discount applies to most CGT assets including shares, investment property, ETFs, and crypto held longer than 12 months. Your principal residence (main home) is generally fully exempt from CGT under the main residence exemption.
Can I salary sacrifice to reduce my tax?+
Yes, several common salary sacrifice arrangements reduce your taxable income: 1) Super contributions up to the $30,000 concessional cap (the most common and most powerful). 2) Novated lease for a vehicle (with FBT implications). 3) Laptop or work tablet. 4) Childcare in some employer arrangements. 5) Professional development. The biggest tax saving comes from super salary sacrifice for anyone in the 30%+ marginal bracket — every $1,000 sacrificed saves $300+ in income tax and only attracts $150 in super contributions tax, a net 15+ percentage point benefit.
Sources & Disclaimer
Tax brackets 2025-26: ATO Individual income tax rates. Stage 3 tax cuts revised legislation: Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024. Medicare levy: ATO Medicare levy page. Medicare Levy Surcharge thresholds: ATO Income thresholds and rates. Tax filing deadline: ATO Lodging your tax return page. Work from home deductions: ATO Working from home expenses page. This article is for educational purposes only and is not personalised tax advice.