What are the 2025–26 Australian income tax brackets?
For Australian residents in 2025–26: $0–$18,200 is tax-free. $18,201–$45,000 is taxed at 19%. $45,001–$120,000 at 32.5%. $120,001–$180,000 at 37%. Over $180,000 at 45%. The Low Income Tax Offset (LITO) of up to $700 also applies for lower incomes.
What is the Medicare Levy?
The Medicare Levy is a 2% tax on your taxable income that funds Australia's public health system. Most residents pay this. There is a low-income threshold below which it is reduced or waived, and a Medicare Levy Surcharge (an extra 1–1.5%) applies if your income exceeds $93,000 and you don't have private hospital cover.
What is HECS/HELP and when do I repay it?
HECS-HELP is a government loan for university fees. Repayments are compulsory once your income exceeds the minimum threshold (~$54,435 in 2025–26). The repayment rate scales from 1% up to 10% depending on your income. Repayments are made through your tax return or PAYG withholding.
What is the Low Income Tax Offset (LITO)?
The LITO reduces the tax payable for lower-income earners. For 2025–26, the maximum offset is $700 for incomes up to $37,500. It phases out between $37,500 and $45,000 (at 5c per dollar), then between $45,000 and $66,667 (at 1.5c per dollar). It cannot reduce your tax below zero.
How are working holiday makers taxed?
Working holiday makers (visa subclass 417 or 462) are taxed at 15% on the first $45,000 of income earned in Australia, then at standard non-resident rates above that. They do not receive the tax-free threshold or LITO, and are generally exempt from the Medicare Levy.