Australian Income Tax Calculator — Free 2026
Calculate your Australian income tax for 2025-26 including Medicare levy, Low Income Tax Offset (LITO), and SAPTO for seniors. Updated for Stage 3 tax cuts.
How It Works
- Enter your taxable income
- Set your options
- Review your tax breakdown
Understanding the Australian Tax System: 2025-26 Guide
Australia uses a progressive income tax system, meaning higher portions of your income are taxed at higher rates. The Australian Taxation Office (ATO) collects income tax on behalf of the federal government, and tax is generally withheld by employers through the Pay As You Go (PAYG) withholding system. At the end of each financial year (1 July to 30 June), you lodge a tax return to reconcile any difference between what was withheld and your actual liability.
2025-26 Income Tax Rates — Stage 3 Cuts
The Stage 3 tax cuts, which took effect on 1 July 2024, significantly restructured Australia's tax brackets. These rates apply for both 2024-25 and 2025-26:
| Taxable Income | Rate | Tax on Band |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | Up to $4,288 |
| $45,001 – $135,000 | 30% | Up to $27,000 |
| $135,001 – $190,000 | 37% | Up to $20,350 |
| $190,001+ | 45% | On each dollar above |
The key change under Stage 3 was the reduction of the 19% bracket rate to 16%, the elimination of the 32.5% rate, and the expansion of the 30% bracket from $45,000 up to $135,000. This means most middle-income earners now pay noticeably less tax than they did in 2023-24.
Medicare Levy
The Medicare levy is 2% of your taxable income and is charged in addition to income tax. It funds Australia's universal healthcare system. Most residents pay the full levy, but there are thresholds for low-income earners. For 2025-26, individuals with taxable income below approximately $26,000 receive a reduction or exemption. The levy phases in from about $24,276 and is fully applied on income above $30,345. Foreign residents and working holiday makers are not liable for the Medicare levy.
Note: High-income earners without private hospital cover also pay the Medicare Levy Surcharge (MLS) at 1–1.5% — this calculator does not include MLS. Use our Medicare Levy Calculator for a full MLS breakdown.
Low Income Tax Offset (LITO)
LITO reduces the amount of income tax payable for lower-income Australian residents. For 2025-26:
- Income up to $45,000: Full LITO of $700
- $45,001 – $66,667: LITO reduces by 5 cents per dollar over $45,000
- Above $66,667: LITO is nil
LITO can only reduce your tax to zero — it cannot create a refund by itself. Combined with the tax-free threshold, LITO effectively makes approximately $21,884 of income tax-free for residents.
SAPTO — Seniors and Pensioners Tax Offset
Australian residents aged 65 or older who are eligible for a government pension or allowance may receive the Seniors and Pensioners Tax Offset (SAPTO). For singles, the maximum SAPTO is $2,230 for 2025-26. It phases out at 12.5 cents per dollar of income above the single threshold of $32,279. SAPTO can significantly reduce — or eliminate — the tax liability of eligible seniors. Once SAPTO reduces your tax to zero, any unused portion can be transferred to a spouse.
Foreign Residents and Working Holiday Makers
Foreign residents are taxed differently — there is no tax-free threshold, no LITO, and no Medicare levy. The first $135,000 is taxed at a flat 30%, then 37% up to $190,000, and 45% above that. Working holiday makers (visa subclass 417 or 462) pay 15% on the first $45,000 of income, then standard resident rates above that. Working holiday makers also do not pay the Medicare levy. For salary and take-home pay calculations, also see our Australian Salary Calculator.
Frequently Asked Questions
For Australian residents in 2025-26, the tax brackets are: $0–$18,200 at 0% (tax-free threshold), $18,201–$45,000 at 16%, $45,001–$135,000 at 30%, $135,001–$190,000 at 37%, and $190,001 and above at 45%. These rates reflect the Stage 3 tax cuts that took effect from 1 July 2024.
The Medicare levy is 2% of your taxable income and funds Australia's public health system. Most Australian tax residents pay the full levy. Low-income earners may pay a reduced amount or nothing at all — the reduction threshold for 2025-26 is $26,000 (with full levy phasing in between approximately $24,276 and $30,345). Foreign residents and working holiday makers do not pay the Medicare levy.
The Low Income Tax Offset (LITO) reduces the amount of tax payable for lower-income Australian residents. For 2025-26, LITO is $700 for taxable incomes up to $45,000. It phases out by 5 cents per dollar for income between $45,001 and $66,667, after which LITO is nil. LITO cannot produce a refund — it only reduces tax to zero.
The tax-free threshold for Australian residents is $18,200 for the 2025-26 financial year. This means you do not pay income tax on the first $18,200 of your income. When you combine the tax-free threshold with the Low Income Tax Offset, the effective tax-free income can be up to approximately $21,884. Foreign residents are not entitled to the tax-free threshold.
Foreign residents for Australian tax purposes are taxed at a flat 30% on the first $135,000 of taxable income, 37% on income from $135,001 to $190,000, and 45% on income above $190,000. There is no tax-free threshold, no LITO, and no Medicare levy for foreign residents. Working holiday makers have a special 15% rate on their first $45,000, then standard resident rates above that.
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