Guide to Australian Tax Updates: Income Tax Rates, Medicare Levy & SAPTO Changes
Where the individual tax brackets sit for the return you are lodging now and for the year in progress, plus the Medicare levy low-income thresholds and the SAPTO offsets – with the year each figure belongs to stated, because they move every July.
Tax figures move every 1 July, and most of the confusion we see comes from reading a number without knowing which year it belongs to. So every figure below says which year it is for.
The return you are lodging now is the 2025-26 return, for the year ended 30 June 2026. The 2026-27 year is the one in progress – the year your PAYG withholding, instalments and planning are working on.
Individual tax rates
| Taxable income | 2025-26 (lodging now) | 2026-27 (in progress) |
|---|---|---|
| $0 – $18,200 | Nil | Nil |
| $18,201 – $45,000 | 16% | 15% |
| $45,001 – $135,000 | 30% | 30% |
| $135,001 – $190,000 | 37% | 37% |
| $190,001 and over | 45% | 45% |
Only the lowest rate moved: 16% to 15% from 1 July 2026, with a further cut to 14% legislated from 1 July 2027. The thresholds are unchanged.
These rates do not include the 2% Medicare levy, and they are the resident rates. Higher earners without private hospital cover pay more again – see the Medicare Levy Surcharge, which is a separate charge on top of the levy.
Foreign residents
Foreign residents get no tax-free threshold and pay 30% from the first dollar up to $135,000, then 37% to $190,000 and 45% above that. Unchanged for both years – the 15% cut does not reach foreign residents, because they have no $18,201–$45,000 bracket to cut.
Working holiday makers
Working holiday makers pay 15% up to $45,000, then the foreign resident scale: 30% to $135,000, 37% to $190,000, 45% above. Unchanged for both years. Your employer has to be a registered working holiday maker employer for this scale to apply.
Medicare levy low-income thresholds
Below the lower figure you pay no Medicare levy; between the two you pay a reduced rate; above the upper figure you pay the full 2%.
These are the 2025-26 thresholds – the ones that apply to the return being lodged now:
| No levy up to | Full levy from | |
|---|---|---|
| Singles | $28,011 | $35,013 |
| Families | $47,238 | $59,047 |
| Single seniors and pensioners | $44,268 | $55,335 |
| Senior and pensioner families | $61,623 | $77,028 |
Add $4,338 to the family thresholds for each dependent child or student.
The 2026-27 thresholds have not been announced yet. They are normally set in the Budget and indexed, so expect them to rise again.
SAPTO
The Senior Australians and Pensioners Tax Offset reduces tax for eligible seniors, and can remove it entirely. It shades out at 12.5c for every dollar of rebate income above the shade-out threshold. These are the 2025-26 figures:
| Circumstance | Maximum offset | Shade-out | Cut-out |
|---|---|---|---|
| Single | $2,230 | $34,919 | $52,759 |
| Each partner of a couple | $1,602 | $30,994 | $43,810 |
| Each partner, illness-separated | $2,040 | $33,732 | $50,052 |
SAPTO is not automatic on lodgment in every case, and eligibility depends on your age, your pension and your rebate income rather than your taxable income. If you are close to a threshold it is worth having someone check it.
The offset people still ask about
The low and middle income tax offset (LMITO) is gone. The last year it could be claimed was 2021-22; it ended on 30 June 2022 and was not replaced. If your refund dropped by up to $1,500 and you have never worked out why, that is usually the reason.
The low income tax offset (LITO) does still exist: up to $700 where taxable income is $37,500 or less, reducing to nil at $66,667. It is applied automatically – there is nothing to claim.
What this means for you
If you are lodging now, use the 2025-26 column. If you are estimating this year's tax, projecting a bonus, or deciding when to realise something, use 2026-27 – the 15% rate is worth up to $268 a year on its own, and more once the 14% rate arrives in July 2027.
None of these figures tell you what you will actually pay, because offsets, the levy, deductions and the timing of income all move the answer. That is the part we do.
Book an appointment or contact us and we will work it through against your own numbers.