Individual income tax rates for 2026-27: what changed on 1 July

For 2026-27, Australian resident individuals pay nil on taxable income up to $18,200, 15% on the part from $18,201 to $45,000, 30% from $45,001 to $135,000, 37% from $135,001 to $190,000 and 45% above $190,000 — excluding the 2% Medicare levy. The only change to the rate table from 2025-26 is the enacted cut of the 16% rate to 15% from 1 July 2026, with a further legislated cut to 14% from 1 July 2027.

Key points:
- The 2026-27 resident rates are enacted law — 15% ($18,201–$45,000), 30% ($45,001–$135,000), 37% ($135,001–$190,000) and 45% ($190,001+) — set by the [Treasury Laws Amendment (More Cost of Living Relief) Act 2025](https://www.ato.gov.au/law/view/print?DocID=PAC/20250028/Sch1-Cl2&PiT=99991231235958), which received Royal Assent on 27 March 2025.
- Exactly one number in the rate table moved from 2025-26: the rate on the $18,201–$45,000 band fell from 16% to 15%. No bracket threshold moved, and the $18,200 tax-free threshold is unchanged.
- Derived from the legislated rates, the cut is worth up to $268 for the year — 1% of the $26,800 band — with the full amount reached once taxable income is $45,000 or more.
- A further cut of the same band to 14% is already legislated for 2027-28 and later years. It is enacted law with a future start date, not a proposal.
- The 2% Medicare levy sits on top of the rate table. Its low-income thresholds for 2026-27 had not been set at 12 July 2026 — the latest verified thresholds are for 2025-26.
- Two other enacted measures matter. The up-to-$1,000 [standard deduction for work-related expenses](/technical-resources/standard-deduction-work-expenses-2026-27) applies from the 2026-27 return. The ATO has said it will apply the deduction automatically for eligible taxpayers — but it is not an extra $1,000 on top of your claims: it is reduced, dollar for dollar, by the work-related deductions you claim, so it is a floor beneath those claims rather than an addition to them. The up-to-$250 [Working Australians tax offset](/technical-resources/working-australians-tax-offset-2027-28) starts only in 2027-28.
- The ATO updated all 15 PAYG withholding schedules and 12 tax tables from 1 July 2026, so withholding during 2026-27 reflects the 15% rate.