Australian Income Tax Brackets 2025–26: What You’ll Actually Take Home

If you have ever looked at your payslip and thought, “Right, and where exactly did that chunk wander off to?”, this is for you.

Australia’s tax system is not actually that scary once you strip out the jargon. The confusing bit is that people hear “I’m in the 30% bracket” and assume the ATO is taking 30% of everything. It is not. If it did, office small talk in July would be even more unbearable.

This guide breaks down the 2025–26 Australian resident tax brackets, how LITO works, what the Medicare levy does, and what take-home pay looks like at a few common salaries. If you want your exact number, jump straight to the Income Tax Calculator or the Pay Calculator.

These examples assume you are an Australian resident for tax purposes, entitled to the full tax-free threshold, with no salary sacrifice, no deductions included yet, and no Medicare levy surcharge. If you have a student debt, use the HECS/HELP calculator as well, because that can make your take-home pay look a bit leaner.

The 2025–26 tax brackets, in plain English

Australia uses a progressive tax system. Different slices of your income are taxed at different rates.

The most important thing to remember is this: moving into a higher bracket does not pull all your income into that higher rate. Only the dollars above the threshold are taxed at the new rate.

Quick example, because bracket panic is everywhere

Say you earn $100,000 in taxable income.

• The first $18,200 is taxed at 0%
• The next $26,800 is taxed at 16%
• The next $55,000 is taxed at 30%

That gives you $20,788 of income tax before things like HELP repayments or salary sacrifice change the picture. Your marginal rate is 30%, but your effective tax rate is much lower than that.

So no, a pay rise does not somehow make you poorer because “tax took it all”. That myth needs a spell on the bench.

The Medicare levy, yes, it usually sits on top

For most workers, the Medicare levy is 2% of taxable income on top of normal income tax. That means a $100,000 taxable income usually adds another $2,000 of levy.

There are low-income reductions and exemptions, so the exact amount can change if your income is lower or your circumstances are different. But for a fairly standard full-time worker, the simple assumption is that the 2% levy applies.

There is also a Medicare levy surcharge for higher income earners who do not have eligible private hospital cover. That is separate from normal income tax and separate from the standard Medicare levy, so if you are near those thresholds it is worth checking before you assume your take-home pay.

LITO, the quiet little tax helper

The Low Income Tax Offset, or LITO, reduces the amount of tax payable for lower income earners. It is not cash in your hand and it is not a bonus. It just cuts your tax bill down a bit.

For 2025–26:

• Up to $37,500: maximum offset of $700
• $37,501 to $45,000: offset reduces by 5 cents per dollar over $37,500
• $45,001 to $66,667: the remaining offset reduces by 1.5 cents per dollar over $45,000
• Above $66,667: no LITO

That is why lower incomes can end up paying a bit less tax than the basic bracket formula suggests.

What you’ll actually take home at common salaries

Here are rough annual and monthly numbers using the 2025–26 resident tax rates, 2% Medicare levy, and LITO where it still applies.

These are solid planning numbers, but they are still simplified. Bonuses, deductions, salary sacrifice, reportable fringe benefits, private health insurance settings, and irregular income can all change the result. And if you have a student loan, 2025–26 brought an important change.

HELP debt changes the picture more gently than it used to

From the 2025–26 income year, compulsory study and training loan repayments move to a marginal repayment system. In plain English, that means you do not apply one flat repayment rate to your entire repayment income once you cross the threshold.

The ATO says compulsory repayments start once repayment income exceeds $67,000 for 2025–26, and the repayment is calculated only on the portion above that threshold. That is a much less brutal setup than the old cliff-style system people used to complain about.

So if your take-home pay looks different from the table above, and you have HECS or HELP, that is usually the first place to check. The HECS/HELP calculator is your friend here.

Why your payslip and your tax return are not perfect twins

Your employer uses ATO withholding tables during the year. That is an estimate based on your pay cycle and the information they have. At tax time, the final result gets squared up using your actual income, deductions, offsets, Medicare position, and loan obligations.

That is why some people get a refund and others get a bill. It is not a prize. It is just arithmetic arriving late with paperwork.

What a pay rise really means

If you go from $80,000 to $90,000, your extra $10,000 mostly sits in the 30% bracket. In the simple version, that means:

• About $3,000 in extra income tax
• About $200 in extra Medicare levy
• About $6,800 extra take-home pay

So yes, tax rises with your income. No, your raise was not secretly cancelled by the tax office.

Do not forget super

In 2025–26, the super guarantee rate is 12%. For most employees, that is paid by your employer on top of ordinary time earnings.

So if your salary is $100,000, a typical setup is:

• Take-home pay, roughly $77,212 in this simplified example
• Employer super contribution, roughly $12,000

That does not help with this week’s groceries, granted, but it absolutely matters for your long-term wealth.

Three calculators worth using next

If this guide got you close but not quite there, these are the obvious next steps:

• Income Tax Calculator, for annual tax and take-home estimates
• Pay Calculator, for weekly, fortnightly and monthly pay
• HECS/HELP Repayment Calculator, if your payslip feels lighter than this guide suggests