Australia Income Tax Calculator 2025-26
ATO tax brackets + Medicare Levy + LITO offset โ resident and non-resident rates
Why 41% of Australians Miscalculate Their Tax โ and How to Get It Right
A 2024 ATO review found that over 41% of individuals misinterpret Australia's marginal tax system. The most common mistake: people earning $80,000 believe they pay 30% tax on their entire income. In reality, they pay 0% on the first $18,200, 16% on the next $26,800, and 30% only on the income above $45,000. Their actual tax rate (before Medicare, before offsets) is about 20.8% โ not 30%. This confusion leads to poor budgeting, shock tax bills, and missed refund opportunities. The calculator above computes the correct amount.
ATO Income Tax Brackets 2025-26 (Australian Residents)
| Taxable Income | Tax Rate | Tax on This Bracket |
|---|---|---|
| $0 โ $18,200 | 0% | Nil (tax-free threshold) |
| $18,201 โ $45,000 | 16% | Up to $4,288 |
| $45,001 โ $135,000 | 30% | Up to $27,000 |
| $135,001 โ $190,000 | 37% | Up to $20,350 |
| Above $190,000 | 45% | 45% on excess |
Stage 3 tax cuts effective from 1 July 2024 โ these brackets continue for 2025-26. Does not include 2% Medicare Levy or tax offsets.
Medicare Levy + Surcharge
Most Australian residents pay a 2% Medicare Levy on their total taxable income. This funds the Medicare public health system. Low-income earners below approximately $26,000 (singles) pay a reduced levy or none.
The Medicare Levy Surcharge (MLS) is an additional 1% to 1.5% charge on top of the 2% levy โ it applies to singles earning above $101,000 who do not hold eligible private hospital cover. Buying private health insurance above this income threshold is often cheaper than paying the MLS.
Low Income Tax Offset (LITO) โ Free Money Many Miss
The Low Income Tax Offset reduces the tax you pay and is automatically applied when you lodge your return. For 2025-26:
- Maximum LITO: $700 (for taxable income up to $37,500)
- Phases out between $37,500 and $45,000 at 5 cents per dollar
- Further phases out between $45,001 and $66,667 at 1.5 cents per dollar
- Fully gone above $66,667
Superannuation โ Your Employer's 11.5% Contribution
On top of your salary, your employer must contribute 11.5% of your ordinary time earnings to your superannuation (super) fund โ this is the Superannuation Guarantee (SG) rate for 2025-26. This money belongs to you but is locked until you reach preservation age (typically 60). Super contributions are taxed at 15% inside the fund (not at your marginal rate), making them highly tax-efficient for saving. An employee earning $80,000 receives an additional $9,200/year in super contributions.
Tax Payable at Common Australian Income Levels (2025-26)
| Income | Income Tax | Medicare (2%) | Take-Home | Effective Rate |
|---|---|---|---|---|
| $50,000 | $5,092 | $1,000 | $43,908 | 12.2% |
| $80,000 | $14,788 | $1,600 | $63,612 | 20.5% |
| $100,000 | $20,788 | $2,000 | $77,212 | 22.8% |
| $150,000 | $38,438 | $3,000 | $108,562 | 27.6% |
| $200,000 | $60,638 | $4,000 | $135,362 | 32.3% |
Approximate. Includes LITO where applicable. Does not include HELP repayments, MLS, or deductions.