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Income Tax Calculator

Estimate your income tax for the 2025-26 financial year by bracket, including the Medicare levy and the low income tax offset.

Inputs

AUD
Resident rates 2025-26: nil to $18,200, 16% to $45,000, 30% to $135,000, 37% to $190,000, 45% above. The 2% Medicare levy is added on top; the low income tax offset (up to $700) reduces tax for incomes to $66,667. Assumes you are a resident claiming the tax-free threshold. Excludes the Medicare Levy Surcharge.

Total Tax (incl. Medicare)

Income tax + 2% Medicare levy
$0

How income tax works

Australia uses a progressive (marginal) system: each rate applies only to the income within its bracket. The first $18,200 is tax-free; income to $45,000 is taxed at 16%; to $135,000 at 30%; to $190,000 at 37%; and above $190,000 at 45%. Because of this, your average rate is lower than your top marginal rate — someone on $80,000 pays about 20.5% on average, not 30%.

On top of income tax, most residents pay the 2% Medicare levy on taxable income. Lower earners benefit from the Low Income Tax Offset (LITO) of up to $700, which directly reduces tax payable (not taxable income) and phases out by $66,667. These Stage 3 rates took effect on 1 July 2024; from 1 July 2026 the 16% bracket is legislated to fall to 15%.

FAQ

Does this include the Medicare levy?
Yes. The headline figure is income tax plus the 2% Medicare levy; the breakdown shows each part separately.
What is LITO?
The Low Income Tax Offset reduces tax by up to $700 for incomes up to $37,500, tapering to nil at $66,667. It can reduce tax to zero but is not refundable.
What is the tax-free threshold?
$18,200 — income below this is tax-free for residents claiming the threshold with one employer.
Do foreign residents get the threshold?
No. Foreign residents pay 30% from the first dollar to $135,000 and don't receive the tax-free threshold or pay the Medicare levy. This tool uses resident rates.