Australia Income Tax Explained (2025/26)

Australian take-home pay is shaped by three things: income tax, the Medicare Levy, and — sitting on top of your salary rather than coming out of it — superannuation. There’s no state income tax, so your marginal rate is the same wherever you live in Australia.

Income tax brackets (2025/26)

For Australian residents, the rates are:

• 0% on the first $18,200 — the tax-free threshold.
• 16% on $18,201–$45,000.
• 30% on $45,001–$135,000.
• 37% on $135,001–$190,000.
• 45% above $190,000.

As elsewhere, only the income inside each band is taxed at that band’s rate. The Low Income Tax Offset (LITO) of up to $700 further reduces tax for lower earners.

The Medicare Levy

Most taxpayers pay a 2% Medicare Levy on taxable income, funding Australia’s public health system. It’s phased in for low incomes.

Superannuation

Your employer pays superannuation at 12% of your ordinary earnings (2025/26) on top of your salary — it goes to your super fund, not your bank account, so it doesn’t reduce take-home pay. It’s essentially compulsory retirement saving.

A worked example

On an $80,000 salary you’d pay about $14,788 income tax and $1,600 Medicare Levy, leaving roughly $63,600 take-home — plus $9,600 of super paid separately into your fund. See the exact figure for any salary with our Australian salary calculator, or browse $80,000 after tax and other amounts.