What are the Australian income tax rates for 2025-26?

For 2025-26, Australian resident tax rates are: $0-$18,200 = 0% (tax-free), $18,201-$45,000 = 16%, $45,001-$135,000 = 30%, $135,001-$190,000 = 37%, $190,001+ = 45%. These rates include the Stage 3 tax cuts effective from 1 July 2024.

What is the HECS-HELP repayment threshold for 2025-26?

The HECS-HELP repayment threshold for 2025-26 is $67,000. Below this amount, no repayment is required. The new marginal system applies 15% on income between $67k-$125k, 17% on $125k-$179k, and 10% of total income above $179,286.

What is the Medicare Levy Surcharge for 2025-26?

The Medicare Levy Surcharge for singles without private hospital cover is: 0% for income up to $93,000, 1% for $93,001-$108,000, 1.25% for $108,001-$144,000, and 1.5% for income over $144,000.

What is the Superannuation Guarantee rate for 2025-26?

The Superannuation Guarantee (SG) rate for 2025-26 is 12%. The concessional contributions cap is $30,000 per year and non-concessional cap is $120,000 per year.

What is the tax-free threshold in Australia?

The first $18,200 of your yearly income is tax-free. If you earn less than this amount, you generally don't pay income tax, though you may still need to lodge a return to receive any tax withheld as a refund.

How do I claim the tax-free threshold?

You claim it by answering 'Yes' to the question "Do you want to claim the tax-free threshold?" on your Tax File Number (TFN) declaration form when you start a new job. You should only claim it from one employer.

What happens if I have two jobs?

You should claim the tax-free threshold from your primary payer (usually the job with the highest salary). For your second job, select 'No' on the TFN declaration, and you will be taxed at a higher rate from the first dollar to help prevent a tax debt at the end of the year.

What is a tax refund?

A tax refund is money paid back to you by the ATO when you have paid more tax during the year (via PAYG withholding from your pay) than you actually owe. This often happens if you have claimed valid tax deductions or tax offsets.

Why do I have a tax bill (tax debt)?

This happens if you haven't paid enough tax during the year. Common reasons include: moving into a higher tax bracket, having multiple jobs without adjusting withholding, investment income (like bank interest or dividends) where tax wasn't withheld, or having a HECS/HELP debt.

What tax deductions can I claim?

You can claim deductions for expenses directly related to earning your income. Common examples include vehicle and travel expenses, clothing and laundry for work uniforms, home office expenses, and self-education costs. You must have spent the money yourself and not been reimbursed.

Can I claim my drive to work?

Generally, no. Normal travel between your home and your regular workplace is considered a private expense. You can only claim car expenses if you travel directly between two separate jobs on the same day, travel to an alternate workplace, or must carry bulky tools that cannot be stored at work.

How much can I claim for laundry without receipts?

You can claim up to $150 for laundry expenses (washing, drying, ironing work clothes) without written evidence, provided the calculation is reasonable. The standard rate is $1 per load if you wash work clothes with other items, or $2 per load for work-only loads.

What is the 'cents per kilometre' method for car expenses?

This is a simplified way to claim car expenses without keeping a logbook. For 2024-25 and 2025-26, you can claim 88 cents per kilometre for up to a maximum of 5,000 business kilometres per car per year. This rate covers all car running expenses including fuel, registration, and depreciation.

Can I claim my home internet or phone bill?

Yes, but only the work-related portion. You cannot claim the full bill if you also use it for personal purposes. You need to calculate the percentage of use that is for work and claim only that amount. For working from home, you can use the fixed rate method of 70 cents per hour which covers phone, internet, electricity and stationery.

What are the tax brackets for 2025-26?

For residents: $0-$18,200 = 0%, $18,201-$45,000 = 16%, $45,001-$135,000 = 30%, $135,001-$190,000 = 37%, $190,001+ = 45%. These rates do not include the 2% Medicare levy. From 1 July 2026, the 16% rate will drop to 15%, and from 1 July 2027, it will drop further to 14%.

What is the Medicare Levy?

The Medicare levy is 2% of your taxable income. It helps fund Australia's public health system (Medicare). It is calculated on top of your income tax. Some individuals may be eligible for a reduction or exemption based on their income level or medical circumstances.

Do I have to pay the Medicare Levy Surcharge (MLS)?

You may have to pay the MLS (an extra 1% to 1.5%) if your income is above a certain threshold and you do not have an appropriate level of private patient hospital cover. For 2025-26, the threshold is $101,000 for singles or $202,000 for families.

How much tax do I pay on my second job?

There is no specific 'second job tax rate.' However, if you don't claim the tax-free threshold on your second job, your employer will withhold tax at a higher rate (starting from the first dollar) to help ensure you don't underpay tax for the year. Your total tax is calculated on your combined income when you lodge your return.

What is the Low Income Tax Offset (LITO)?

LITO is a tax offset that reduces the tax you pay if you earn up to $66,667. The maximum offset is $700 for incomes up to $37,500. It phases out between $37,500 and $66,667. You don't need to apply for it; the ATO calculates it automatically when you lodge your return.

When is the tax return deadline?

If you are lodging yourself (via myTax), the deadline is 31 October. If you use a registered tax agent, you may have until May of the following year, but you usually need to be registered with them by 31 October to get the extension.

Do I need to lodge a tax return if I earned under $18,200?

Even if you don't owe tax, you may still need to lodge a return if you had any tax withheld from your pay (to get a refund). If you earned under the threshold and had no tax withheld, you might need to submit a 'Non-lodgment advice' instead of a full return.

Is my superannuation taxed?

Yes. Employer contributions (SG) and salary sacrifice contributions are generally taxed at 15% within the super fund. This is usually much lower than your marginal income tax rate, which is why salary sacrificing into super can be a tax-effective strategy. The concessional contribution cap for 2025-26 is $30,000.

What is HECS/HELP repayment and when do I start paying?

If you have a study loan (HECS-HELP, FEE-HELP, etc.), you must start repaying it once your income reaches the minimum threshold. For 2025-26, the threshold is $67,000. From 2025-26, repayments use a new marginal system—you only repay on income above the threshold (15c per $1 over $67,000), not your total income.

Can I track the progress of my tax return?

Yes, you can track the status of your return by logging into your myGov account linked to the ATO, or by using the ATO app. You'll be able to see if it's been received, is being processed, or has been completed.

How much am I saving from the Stage 3 tax cuts?

The Stage 3 tax cuts (from 1 July 2024) lowered the 19% rate to 16% and the 32.5% rate to 30%. All taxpayers benefit: someone earning $45,000 saves around $804/year, $80,000 saves $1,679/year, $120,000 saves $2,679/year, and $200,000 saves $4,529/year compared to the old rates.

What tax changes are coming in 2026 and 2027?

From 1 July 2026, the 16% tax rate (on income $18,201-$45,000) will drop to 15%, saving $268 per year for those earning above $45,000. From 1 July 2027, this rate drops further to 14%, saving $536 per year. These cuts are now legislated.

Free Income Tax Calculator Australia (2026)

Taxable Income	Tax Rate	Tax on This Income
$0 – $18,200	0%	Nil
$18,201 – $45,000	16%	16c 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
$190,001+	45%	$51,638 + 45c for each $1 over $190,000

Category	No Levy Below	Reduced Levy Up To
Singles	$27,222	$34,027
Families (base)	$45,907	$57,383
Seniors (single)	$38,365	$47,956
Seniors (family)	$59,886	$74,857

Taxable Income	LITO Amount
Up to $37,500	Full offset of $700
$37,501 – $45,000	$700 minus 5c per $1 over $37,500
$45,001 – $66,667	$325 minus 1.5c per $1 over $45,000
Above $66,667	No offset

Status	Maximum Offset	Cutout Income
Single	$2,230	$52,759
Couple (each)	$1,602	$43,810

Income	Rate
$0 – $135,000	30%
$135,001 – $190,000	37%
$190,001+	45%

Income	Rate
$0 – $45,000	15%
$45,001 – $135,000	30%
$135,001+	37% – 45%

Showing 16 updates

Federal ATO Compliance New

January 2026

ATO Banning Tax Dodgers from Leaving Australia in $50 Billion Debt Crackdown

The ATO is actively using Departure Prohibition Orders (DPOs) to stop taxpayers with significant unpaid debts from leaving the country. Since July 2025, 21 DPOs have been issued - more than the entire previous financial year.

Key Details

Departure Prohibition Orders: ATO can ban taxpayers from leaving Australia until debts are paid
21 DPOs Issued: Since July 2025 - exceeds full year total for FY 2024-25
$50 Billion: Total collectable tax debt the ATO is pursuing
Other Enforcement: Director penalty notices, garnishees, credit reporting, wind-up applications
Focus Areas: Unpaid employee super, PAYG withheld but not remitted, GST collected but not paid

Recent Example

A taxpayer was pulled aside and stopped from boarding an international flight in the early morning hours.

ATO Warning

"If you have a significant debt with the ATO and we've issued you with a DPO, you'll need to pay or make satisfactory arrangements before planning overseas travel."

Federal Superannuation Major Change

January 2026

Payday Super Now Law: Employers Must Pay Super With Every Payslip from 1 July 2026

The Payday Super legislation has passed and is now law. From 1 July 2026, employers must pay superannuation guarantee contributions at the same time as wages, with funds required to reach employee accounts within 7 business days.

Key Changes from 1 July 2026

Same-Day Payment: Super must be paid on payday, not quarterly
7 Business Days: Contributions must reach super funds within 7 business days of payday
New Term - "Qualifying Earnings": Replaces OTE for SG calculations
SBSCH Closing: ATO Small Business Super Clearing House closes 30 June 2026
SuperStream v3: Upgraded messaging system to reduce rejected contributions
Maximum Contribution Base: Now annual (not quarterly)

First Year Compliance

ATO will take a flexible approach for employers who try to do the right thing and resolve issues quickly.

Penalty if Late

Super Guarantee Charge (SGC) applies if contributions not received within 7 business days. SGC includes admin uplift.

Federal HECS/HELP Complete

December 2025

$16 Billion HECS/HELP Debt Wiped: 20% Reduction Now Complete

The ATO has applied the 20% reduction to all student loan debts that existed on 1 June 2025. Over 3 million Australians have benefited from this historic debt relief measure. Refunds for accounts in credit have been processed.

Key Details

20% Reduction: Applied to all HECS-HELP, FEE-HELP, VET Student Loans as at 1 June 2025
Average Saving: ~$5,500 reduction on average debt of $27,600
Total Relief: $16 billion in student debt wiped nationally
Status: Reductions complete - check balance in myGov
Refunds: Credit balances refunded by January 2026

Check Your Balance

View your reduced balance via the ATO app or myGov Online Services.

Also Changed

New marginal repayment system from 2025-26. Threshold increased to $67,000.

Federal Tax Debt Warning

1 July 2025

ATO Interest Charges No Longer Tax Deductible - Costs More to Carry Tax Debt

General Interest Charge (GIC) and Shortfall Interest Charge (SIC) incurred on or after 1 July 2025 can no longer be claimed as tax deductions. With GIC currently at 11.17% compounding daily, carrying tax debt is now significantly more expensive.

Key Changes

No Deduction: GIC and SIC incurred from 1 July 2025 are NOT tax deductible
GIC Rate: Currently 11.17% per annum, compounding daily
SIC Rate: Currently 6.78% per annum (applies to tax shortfalls)
Pre-July 2025: GIC/SIC incurred before 1 July 2025 remains deductible
Reason: Designed to encourage timely payment and fairness for compliant taxpayers

After-Tax Impact

For a 30% tax rate, the effective cost of GIC increases from ~7.8% to the full 11.17%.

What To Do

Pay debts ASAP, set up payment plans, or consider refinancing ATO debt to commercial loans.

Federal HECS/HELP System Change

1 July 2025

HECS/HELP Repayment Threshold Increased to $67,000 with New Marginal System

The minimum repayment threshold has increased from $54,435 to $67,000, and repayments now use a new marginal rate system - you only pay on income above the threshold, not your total income.

Key Changes

New Threshold: $67,000 (up from $54,435 in 2024-25)
Marginal System: Repayments only calculated on income ABOVE $67,000
Rate $67,001-$125,000: 15 cents per $1 over $67,000
Rate $125,001-$179,285: $8,700 + 17 cents per $1 over $125,000
Rate $179,286+: 10% of total repayment income (unchanged)

Example Savings

Income $80,000: $1,950 (new) vs $2,800 (old system) = $850 saved per year.

Who Benefits

All borrowers earning under $179,286. Lower repayments from 2026 tax return onwards.

Federal Superannuation Final Increase

1 July 2025

Super Guarantee Reaches 12% - Final Scheduled Increase Complete

The Superannuation Guarantee rate has reached its final scheduled increase of 12%, up from 11.5% in 2024-25. This is the last increase in the legislated schedule that began in 1992 at 3%.

Key Details

SG Rate: 12% of ordinary time earnings (from 11.5%)
Concessional Cap: $30,000 per year (unchanged)
Non-Concessional Cap: $120,000 per year
Transfer Balance Cap: $2 million (from 1 July 2025)
Coming: Payday Super from 1 July 2026

Tax Strategy

Salary sacrifice up to $30,000 total to reduce taxable income (taxed at 15% instead of marginal rate).

Super Balance Tax

From July 2026: 30% on earnings for balances $3M-$10M, 40% for balances over $10M.

Federal Tax Cut From July 2026

March 2025

Tax Cuts Now Legislated: 16% Rate Dropping to 15% then 14%

The 2025-26 Federal Budget tax cuts have passed Parliament and are now law. The lowest tax bracket rate will drop from 16% to 15% in July 2026 and further to 14% in July 2027.

Key Changes (Legislated)

From 1 July 2026: 16% rate reduced to 15% ($18,201-$45,000 bracket)
From 1 July 2027: 15% rate reduced to 14%
Tax Saving 2026-27: Up to $268 per year for incomes $45,000+
Tax Saving 2027-28: Up to $536 per year for incomes $45,000+
Status: ✅ Legislated - now law

Weekly Impact

~$5/week extra from July 2026, ~$10/week extra from July 2027.

Combined with Stage 3

Average earner saves ~$30,000 in tax over 2024-2036.

Federal Deductions From July 2026

May 2025

$1,000 Instant Tax Deduction: No Receipts Required for Work Expenses

The Albanese Government will introduce a $1,000 automatic tax deduction for work-related expenses from 1 July 2026, eliminating the need for receipts for claims under $1,000.

Key Details

Starts: 1 July 2026 (first benefit in 2027 tax return)
Amount: Up to $1,000 automatic deduction for work-related expenses
No Receipts: No substantiation required for claims under $1,000
Optional: Can still claim itemised expenses if over $1,000
Current Limit: Replaces current $300 no-receipt threshold

Who Benefits

5.7 million taxpayers who currently claim less than $1,000. Average benefit: $205.

Important Note

This is a deduction, not a refund. Actual benefit depends on your tax rate (e.g., 30% rate = $300 back).

Federal ATO Compliance Enforcement

March 2025

ATO Receives $1 Billion for Enhanced Tax Compliance Activities

The 2025-26 Federal Budget allocated nearly $1 billion in additional funding to the ATO to expand compliance activities targeting multinationals, shadow economy, and personal income tax claims.

Funding Breakdown

Tax Avoidance Taskforce: $717.8 million over 4 years - targeting multinationals and large taxpayers
Shadow Economy Program: $155.5 million - targeting unreported income and cash economy
Personal Income Tax Compliance: $75.7 million - increased audits on individual claims
Tax Integrity Program: $50 million - ensuring timely payment of tax debts

What This Means

Expect increased scrutiny on work-related deductions, especially claims over $1,000.

Key Advice

Keep all receipts and records. ATO data-matching is more sophisticated than ever.

Federal Stage 3 Tax Cuts In Effect

1 July 2024

Stage 3 Tax Cuts Now in Effect: 19% Rate Cut to 16%, New Brackets Apply

The revised Stage 3 tax cuts are now in effect, delivering permanent tax relief to all 13.6 million Australian taxpayers with an average annual tax cut of $1,888.

Current Tax Brackets (2024-25 and 2025-26)

$0-$18,200: 0% (tax-free threshold unchanged)
$18,201-$45,000: 16% (was 19%)
$45,001-$135,000: 30% (was 32.5% up to $120k)
$135,001-$190,000: 37% (was 37% from $120k-$180k)
$190,001+: 45% (was 45% from $180k+)

Savings Examples

$100k income: $2,179 saved. $150k income: $3,729 saved.

How It Works

Automatic - PAYG withholding was updated from July 2024. Check your payslips.

Federal Work From Home Deductions

1 July 2024

Work From Home Fixed Rate Increased to 70 Cents Per Hour

The ATO increased the fixed rate method for work from home expenses from 67 cents to 70 cents per hour for the 2024-25 income year onwards.

Key Details

Current Rate: 70 cents per hour (up from 67 cents)
Covers: Electricity, phone, internet, stationery, computer consumables
Records Required: Must keep a record of actual hours worked from home
Separately Claim: Depreciation of equipment (desk, chair, computer) can be claimed on top

Example Claim

2 days/week WFH x 48 weeks x 8 hours = 768 hours x $0.70 = $537.60

Alternative Method

Can still use actual cost method if it gives a higher deduction.

Federal Car Expenses Current Rate

1 July 2024

Car Expense Rate: 88 Cents Per Kilometre (2024-25 and 2025-26)

The cents per kilometre rate for claiming work-related car expenses is 88 cents for both 2024-25 and 2025-26 financial years.

Key Details

Rate: 88 cents per kilometre (up from 85 cents in 2023-24)
Maximum: 5,000 business kilometres per car per year
No Logbook: Not required for cents per km method
Covers: All car running costs including fuel, registration, insurance, depreciation

Maximum Claim

5,000 km x $0.88 = $4,400 per car.

Records Required

Diary or calendar entries showing how you calculated work km.

Federal Superannuation Rate Increase

1 July 2024

Super Guarantee Increased to 11.5%, Concessional Cap Now $30,000

The Superannuation Guarantee rate increased from 11% to 11.5% of ordinary time earnings, and the concessional contributions cap was raised to $30,000 per year.

Key Changes

SG Rate: 11.5% (increased to 12% from 1 July 2025)
Concessional Cap: $30,000 per year (up from $27,500)
Non-Concessional Cap: $120,000 per year (up from $110,000)
Transfer Balance Cap: $1.9 million (increased to $2M from 1 July 2025)

Tax Benefit

Super contributions taxed at 15% vs your marginal rate (up to 45%).

Strategy

Salary sacrifice up to total $30,000 to reduce taxable income.

Federal Tax Offset Ended

1 July 2023

Low and Middle Income Tax Offset (LMITO) Ended

The temporary Low and Middle Income Tax Offset of up to $1,500 ended after the 2021-22 financial year, meaning many taxpayers saw reduced refunds from 2022-23 onwards. However, Stage 3 tax cuts from 2024 provide replacement savings.

Key Details

LMITO Ended: No longer available from 2022-23 onwards
LITO Continues: Low Income Tax Offset (up to $700) still available
LITO Income Limit: Phases out from $37,500 to $66,667
Replacement: Stage 3 tax cuts from July 2024 provide ongoing savings

Historical Impact

Refunds were $1,000-$1,500 lower in 2022-23 compared to previous years.

Current Offset

LITO provides up to $700 for incomes under $37,500 (calculated automatically).

Federal Work From Home Method Change

1 July 2023

Work From Home Method Revised - COVID Shortcut Ended

The ATO revised the fixed rate for work from home expenses to 67 cents per hour with stricter record-keeping requirements. The temporary 80 cents per hour COVID shortcut method ended.

Key Changes

Rate: 67 cents per hour (increased to 70c from 1 July 2024)
Covers: Electricity, phone, internet, stationery, computer consumables
Stricter Records: Must keep contemporaneous records of hours worked from home
COVID Shortcut Ended: 80 cents per hour method no longer available

Record Requirements

Timesheets, rosters, or diary entries showing actual WFH hours.

Separate Claims

Equipment depreciation (desk, chair, computer) claimed separately on top.

Free Australia Income Tax Calculator

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Income Distribution

Australian Income Tax Rates 2025-26

HECS/HELP 2025-26

Medicare Levy Surcharge

Superannuation 2025-26

Medicare Levy Exemption Thresholds 2025-26

Tax Offsets 2025-26

Low Income Tax Offset (LITO)

Seniors and Pensioners Tax Offset (SAPTO)

Non-Resident & Visa Tax Rates 2025-26

Foreign Residents

Working Holiday Makers

Common Tax Deductions 2025-26

Key Tax Dates 2025-26

Official ATO Sources

Tips to Maximise Your Tax Return

Boost Your Superannuation

Maximize Work Deductions

Work From Home Claims

Keep Meticulous Records

Don't Forget Donations

$1,000 Instant Deduction Coming

Australian Income Tax News & Updates

ATO Banning Tax Dodgers from Leaving Australia in $50 Billion Debt Crackdown

Key Details

Recent Example

ATO Warning

Payday Super Now Law: Employers Must Pay Super With Every Payslip from 1 July 2026

Key Changes from 1 July 2026

First Year Compliance

Penalty if Late

$16 Billion HECS/HELP Debt Wiped: 20% Reduction Now Complete

Key Details

Check Your Balance

Also Changed

ATO Interest Charges No Longer Tax Deductible - Costs More to Carry Tax Debt

Key Changes

After-Tax Impact

What To Do

HECS/HELP Repayment Threshold Increased to $67,000 with New Marginal System

Key Changes

Example Savings

Who Benefits

Super Guarantee Reaches 12% - Final Scheduled Increase Complete

Key Details

Tax Strategy

Super Balance Tax

Tax Cuts Now Legislated: 16% Rate Dropping to 15% then 14%

Key Changes (Legislated)

Weekly Impact

Combined with Stage 3

$1,000 Instant Tax Deduction: No Receipts Required for Work Expenses

Key Details

Who Benefits

Important Note

ATO Receives $1 Billion for Enhanced Tax Compliance Activities

Funding Breakdown

What This Means

Key Advice

Stage 3 Tax Cuts Now in Effect: 19% Rate Cut to 16%, New Brackets Apply

Current Tax Brackets (2024-25 and 2025-26)

Savings Examples

How It Works

Work From Home Fixed Rate Increased to 70 Cents Per Hour

Key Details

Example Claim

Alternative Method

Car Expense Rate: 88 Cents Per Kilometre (2024-25 and 2025-26)

Key Details

Maximum Claim

Records Required

Super Guarantee Increased to 11.5%, Concessional Cap Now $30,000

Key Changes

Tax Benefit