Australian Tax Rates 2025-2026
A comprehensive guide to all tax rates and thresholds in Australia
Last Updated: April 24, 2025
Reading Time: 8 minutes
Understanding Australian tax rates is essential for effective tax planning and financial management. This comprehensive guide covers all the tax rates and thresholds for the 2025-2026 financial year, including individual income tax, company tax, Medicare levy, and more.
Table of Contents
Individual Income Tax Rates 2025-2026
Australian residents are taxed on a progressive tax system. The following tax rates apply to individuals who are Australian residents for tax purposes:
| Taxable Income | Tax on This Income | Effective Rate (on $100,000) |
|---|---|---|
| $0 – $18,200 | Nil | 0% |
| $18,201 – $45,000 | 19c for each $1 over $18,200 | 5.1% |
| $45,001 – $120,000 | $5,092 plus 32.5c for each $1 over $45,000 | 21.2% |
| $120,001 – $180,000 | $29,467 plus 37c for each $1 over $120,000 | 29.5% |
| $180,001 and over | $51,667 plus 45c for each $1 over $180,000 | 38.3% |
The above rates do not include the Medicare levy of 2%, which is charged in addition to these rates.
Example: Income Tax Calculation
For a taxable income of $85,000:
- First $18,200: $0 tax
- $18,201 to $45,000 ($26,800): $5,092 tax (19%)
- $45,001 to $85,000 ($40,000): $13,000 tax (32.5%)
- Total income tax: $18,092
- Medicare levy (2%): $1,700
- Total tax payable: $19,792
- Effective tax rate: 23.3%
Medicare Levy and Medicare Levy Surcharge
Most Australian residents are liable to pay the Medicare levy to fund Australia's public health system.
Medicare Levy
The standard Medicare levy is 2% of taxable income. Low-income earners may be eligible for a reduction or exemption based on their income level:
| Category | No Levy | Reduced Levy | Full Levy (2%) |
|---|---|---|---|
| Individual | ≤ $24,800 | $24,801 - $31,000 | > $31,000 |
| Family (0-1 children) | ≤ $42,000 | $42,001 - $52,500 | > $52,500 |
| + Per dependent child | + $3,900 | + $4,875 | - |
Medicare Levy Surcharge (MLS)
The Medicare Levy Surcharge is an additional tax (on top of the Medicare levy) for higher income earners who don't have private hospital insurance. It's designed to encourage individuals to take out private hospital cover and reduce the demand on the public Medicare system.
| Income Thresholds | Base Tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Singles | ≤ $93,000 | $93,001 - $108,000 | $108,001 - $144,000 | > $144,000 |
| Families | ≤ $186,000 | $186,001 - $216,000 | $216,001 - $288,000 | > $288,000 |
| MLS Rate | 0.0% | 1.0% | 1.25% | 1.5% |
Note: For families, the threshold increases by $1,500 for each dependent child after the first.
Company Tax Rates 2025-2026
Company tax rates in Australia depend on the company's classification and annual turnover:
| Company Type | Tax Rate | Eligibility |
|---|---|---|
| Base Rate Entity | 25% | Aggregated turnover less than $50 million and passive income is less than 80% of assessable income |
| All Other Companies | 30% | Aggregated turnover of $50 million or more, or passive income is 80% or more of assessable income |
Passive income includes interest, dividends, rent, royalties, and net capital gains, which are considered when determining eligibility for the lower company tax rate.
Goods and Services Tax (GST)
The Goods and Services Tax (GST) is a broad-based tax of 10% on most goods and services sold or consumed in Australia.
GST Rate
The GST rate is 10% and has remained unchanged since its introduction on July 1, 2000.
GST Registration Threshold
Businesses must register for GST if their annual turnover is $75,000 or more ($150,000 for non-profit organizations).
GST-Free Supplies
Some goods and services are GST-free, including:
- Most basic food items
- Most health and medical services
- Most educational courses
- Childcare services
- Exports
Superannuation Rates and Thresholds 2025-2026
Superannuation is Australia's retirement savings system. Here are the key rates and thresholds:
Superannuation Guarantee (SG)
The Superannuation Guarantee rate is 11.5% for the 2025-2026 financial year. This is the minimum percentage of ordinary time earnings that employers must contribute to their eligible employees' superannuation funds.
Contribution Caps
| Contribution Type | Cap Amount | Notes |
|---|---|---|
| Concessional Contributions | $27,500 per year | Includes employer contributions, salary sacrifice, and personal contributions claimed as a tax deduction |
| Non-Concessional Contributions | $110,000 per year | After-tax contributions; potential bring-forward rule for up to 3 years' worth ($330,000) |
| CGT Cap Amount | $1.69 million (lifetime) | For small business CGT concessions |
Superannuation Transfer Balance Cap
The transfer balance cap is $1.9 million. This is the limit on the total amount of superannuation that can be transferred into retirement phase accounts.
HELP/HECS Repayment Thresholds 2025-2026
Higher Education Loan Program (HELP) repayments are based on your income. The repayment rates for 2025-2026 are:
| Repayment Income | Repayment Rate |
|---|---|
| Below $48,000 | Nil |
| $48,000 - $55,758 | 1.0% |
| $55,759 - $59,186 | 2.0% |
| $59,187 - $62,739 | 2.5% |
| $62,740 - $66,425 | 3.0% |
| $66,426 - $70,250 | 3.5% |
| $70,251 - $74,219 | 4.0% |
| Rates continue increasing up to 10% for incomes over $138,000 | |
The repayment rate is applied to your total HELP repayment income, not just the amount above the threshold.
Tax Offsets and Rebates 2025-2026
Tax offsets (also known as rebates) directly reduce the amount of tax you pay. Unlike deductions, which reduce your taxable income, offsets reduce your tax payable.
Low Income Tax Offset (LITO)
The Low Income Tax Offset is available to taxpayers with a taxable income of less than $66,667.
| Taxable Income | LITO Amount |
|---|---|
| $0 - $37,500 | $700 |
| $37,501 - $45,000 | $700 minus 5 cents for each $1 over $37,500 |
| $45,001 - $66,667 | $325 minus 1.5 cents for each $1 over $45,000 |
| Above $66,667 | Nil |
Other Common Tax Offsets
- Seniors and Pensioners Tax Offset (SAPTO): Up to $2,230 for singles and $1,602 for each member of a couple, subject to income tests.
- Private Health Insurance Rebate: Income-tested rebate available either as a premium reduction or a tax offset.
- Zone Tax Offset: For taxpayers living in remote areas of Australia.
- Super Income Stream Tax Offset: 15% tax offset for taxable portion of pension or annuity from an Australian super fund.
Tax Rates for Foreign Residents 2025-2026
Foreign residents are taxed differently from Australian residents. They do not receive the tax-free threshold and are taxed at different rates:
| Taxable Income | Tax on This Income |
|---|---|
| $0 – $120,000 | 32.5c for each $1 |
| $120,001 – $180,000 | $39,000 plus 37c for each $1 over $120,000 |
| $180,001 and over | $61,200 plus 45c for each $1 over $180,000 |
Foreign residents are not required to pay the Medicare levy and generally cannot claim the tax offsets available to Australian residents.
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