Knowing your bracket tells you what every extra dollar is really worth, and what every deduction saves you. Here are the rates on the return you lodge now, and what changes next.
Checked against ATO guidance, July 2026. $18,200 tax free, every year, everyone; 2% Medicare levy on top of income tax; 15% new lowest bracket rate from 1 July 2026.
These are the resident rates for the return you lodge from July 2026. Taxable income and the rate on that slice: $0 to $18,200 — Nil; $18,201 to $45,000 — 16%; $45,001 to $135,000 — 30%; $135,001 to $190,000 — 37%; $190,001 and over — 45%.
Brackets work in slices. Earning $50,000 does not mean paying 30% on all of it; you pay nothing on the first $18,200, 16% on the next slice, and 30% only on the part above $45,000. That is why your effective rate is always lower than your bracket.
A deduction comes off your taxable income, not your tax bill. If you are in the 30% bracket, a $1,000 deduction puts about $320 back in your pocket once the Medicare levy is counted. Same receipt, real money.
The 16% rate drops to 15% for the year that started 1 July 2026, then to 14% from 1 July 2027. That is worth up to $268 a year at first, and up to $536 a year once the second cut lands. No action needed, it flows through your pay automatically.
Most people pay the 2% Medicare levy on top of income tax. Earn over $101,000 as a single with no private hospital cover and the Medicare levy surcharge adds another 1% to 1.5% on top. That is the maths behind everyone suddenly buying hospital cover at $100k.
Do the maths on your own pay: our free tax calculator and pay calculator use these exact rates.
General information only, not tax advice. Rules change and everyone’s situation is different, so check ato.gov.au or talk to a registered tax agent before you lodge. Nomo is a record keeping tool and does not lodge returns.