Resident tax rates 2025-26
| Taxable income | Tax on this income |
|---|---|
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
The above rates do not include the Medicare levy of 2%.
Resident tax rates 2026-27
| Taxable income | Tax on this income |
|---|---|
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,019 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,018 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,368 plus 45c for each $1 over $190,000 |
The above rates do not include the Medicare levy of 2%.
From 1 July 2025, the cents per kilometre rate is 88c for work-related car expenses.
A new guideline is available to help clients to work out the cost of electricity when charging an electric vehicle (EV) from home. Clients can use the EV home charging rate of 4.2c per kilometre.
From 1 July 2026 the Medicare Levy Surcharge thresholds have increased.
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single threshold |
$105,000 or less |
$105,001-$123,000 |
$123,001-$164,000 |
$164,001 or more |
| Family threshold |
$210,000 or less |
$210,001-$246,000 |
$246,001-$328,000 |
$328,001 or more |
| Medicare levy surcharge |
0% |
1% |
1.25% |
1.5% |
The family income threshold is increased by $1,500 for each MLS dependent child after the first child.
If you incur general interest charge (GIC) or shortfall interest charge (SIC) on or after 1 July 2025, you can’t claim these amounts as an income tax deduction in your 2025–26 or later tax returns. GIC or SIC incurred before 1 July 2025 can still be claimed in the 2024–25 and earlier income years.
For more information, see Denying deductions for ATO interest charges.
The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025External Link has extended the $20,000 instant asset write-off limit to the 2025-26 income year. The measure aims to support small business entities (with an aggregated annual turnover of less than $10 million).
Eligible small business entities can immediately deduct the business use portion of the cost of eligible depreciating assets costing less than $20,000. You must first use or install these assets ready for use for a taxable purpose between 1 July 2025 and 30 June 2026.
The $20,000 limit applies on a per asset basis, so small business entities can instantly write off multiple assets. Small business entities can also immediately deduct an eligible amount included in the second element of a depreciating asset’s cost.
The 5-year ‘lock out’ rule is suspended until 30 June 2026. Normally this rule prevents small business entities from re-entering the simplified depreciation regime if they opted out.
One of the biggest changes.
Instead of paying Super Guarantee quarterly, employers must pay employees’ super each payday.
This aims to:
Payroll systems should already be updated to support this.
Additional payroll information is now expected through Single Touch Payroll, including qualifying earnings and super liability reporting. During 2026-27 the ATO is taking an implementation approach before mandatory validation begins in 2027
New withholding schedules apply from the first pay run after 1 July to reflect the tax cut.
From 1 July:
The ATO has introduced several improvements including:
The ATO continues to closely monitor: