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Tax Rates 2025-2026 Year

The 2026 financial year starts on 1 July 2026 and ends on 30 June 2026. The financial year for tax purposes for individuals starts on 1st July and ends on 30 June of the following year.

Note important assumption: The tax scale shown here is reproduced on the basis that it is the SAME as the previous year, i.e. that the currently legislated rates will endure (including the adjusted “stage 3 tax cuts” as set out below.)

Tax rates can and do change in response to government policies and this should be considered if using these rates for any kind of forecast.

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Legislation links:

Stage 3 Tax Cuts Adjusted

27 February 2024

The parliament has approved amendments to reduce the benefit of the original stage tax 3 cuts for higher income earners, and improve the tax scale for lower income earners.

The changes are applicable from 1 July 2024.

The tax scale is to be amended to:

  1. reduce the 19% rate to 16% on incomes up to $45,000
  2. reinsert a 37% rate on incomes between $135,000 and $190,000 (previously 30%)
  3. bring the top rate of 45% to apply from over $190,000 (instead of $200,000)

The original stage 3 tax cuts were the subject of criticism because of the disproportionate benefit flowing to higher income earners, notwithstanding that the tax scale adjustments initiated from the 2018 year had provided reductions for lower and middle income earners.

An illustration of this is evident when comparing tax on $50,000 which shows an increase of $1,500 ($6,467 minus $4,967) in the 2023 year due to the loss of the temporary Lower & Middle Income Offset.

This increase is reduced by $125 in 2025 due to a small tax scale change. However in the same year 2025, higher income earners’ tax on $200,000 goes down by $9,075 ($51,592 minus $60,667).

Original Stage 3 Tax Cuts Tax Scale 2024-25 

Taxable IncomeTax On This Income
 0 to $18,200Nil
$18,201 to $45,00019c for each $1 over $18,200
 $45,001 to $200,000$5,092 plus 30% for each $1 over $45,000
 $200,001 and over $51,592 plus 45c for each $1 over $200,000

The above tables do not include Medicare Levy or the effect of any Low Income or Low and Middle Income tax offsets.

There are low income and other full or partial Medicare exemptions available. A Medicare Levy Surcharge may also be applicable and is applied on a progressive basis if eligible private health insurance cover is not maintained.

2026 Tax Calculator

2026 Tax Calculator (Stage 3 Tax Cuts updated)

Tax thereon: $0
Medicare Levy: $0
LITO: $0
Tax Paid: $0
Tax Payable: $0

* Calculator Notes: Calculations are estimates based on currently announced tax rates applying to a future period and could change before then in accordance with changes in government policy. Rounding errors may be present in the calculated results. Medicare: For the purposes of estimation the calculator assumes a Medicare exemption up to the single income earner exemption threshold for 2023-24 which is $26,000.

The Medicare percentage selection box is included to enable adjustment. The current Medicare income exemption levels can be reviewed here. LITO: The full value of LITO on lower levels of income is $700, however it is not refundable, and so the actual credit is limited to the amount of tax payable. See LITO info here.

Significant Tax and Policy Adjustments Applying From 1 July 2025

Higher Tax Rates For Some Super Funds

The Treasurer has announced that from 1 July 2025, the tax rate applied to future earnings of funds in the accumulation phase with balances above $3 million will be increased to 30% (replacing the existing 15% rate).

The 30% tax rate will not be retrospective and is intended to apply only to relevant earnings from the 2025-26 year onwards from fund assets above $3 million in value. As the proposal currently stands, the value includes unrealised gains.

See: Treasurer’s media release Feb 28, 2023 and Fact Sheet. See also Super Contributions Tax

See also: The new 15% tax on $3M+ member total super balances from 1 July 2025 –– a tax analysis

“Payday Super” from 1 July 2026

A reform to the superannuation guarantee system has been proposed by the Treasurer, requiring employers to pay superannuation for their employees simultaneously with their salary and wages.

The implementation will apply from 1 July 2026.

This will bring forward the timing of super payments, compared to the present position, where most employers typically pay quarterly in arrears.

An expectation from the change is that the frequency and value of superannuation losses from unpaid super will be reduced, with the ATO (with increased funding) will be in a better position to police compliance.

See: Treasurer’s media release.

MYEFO 2023 measures

A number of announced new measures were included the MYEFO 2023 statement from the Treasurer on December 13, 2023. They include:

  • increased fees for foreign investors in residential housing; reduced Build To Rent project fees (summarised here)
  • From 1 July 2025 fuel-efficient cars for the purposes of the Luxury Car Tax will have a maximum fuel consumption of 3.5 litres per 100km (down from 7 litres per 100km)
  • Indexation of LCT threshold for non-fuel-efficient cars will in future be linked to motor vehicle purchase sub-group of the CPI (previously the headline CPI) – from 1 July 2025.
  • For contracts from 1 January 2025 the foreign resident capital gains withholding tax rate threshold will be removed (currently at $750,000); and the withholding rate is to be increased from 12.5% to 15%.
  • From 1 July 2025 ATO interest charges (General and Shortfall) will no longer be tax deductible.

Announced measures are subject to the passage of legislation.

This page was last modified 2024-02-07