Australia’s 1 July 2026 tax cut: what the new 15% rate means for your pay
The bottom tax rate fell from 16% to 15% on 1 July 2026. See how much you save, the full 2026–27 rates and what else changed.
From 1 July 2026, the tax rate on income between $18,201 and $45,000 fell from 16% to 15%. It’s a small cut, but it applies to almost every taxpayer, because nearly everyone earns something in that band. A further cut to 14% is due from 1 July 2027.
How much you save
| Taxable income | Tax in 2025–26 | Tax in 2026–27 | Saving |
|---|---|---|---|
| $30,000 | $1,188 | $1,070 | $118 |
| $40,000 | $2,913 | $2,695 | $218 |
| $60,000 | $8,688 | $8,420 | $268 |
| $85,000 | $16,288 | $16,020 | $268 |
| $200,000 | $56,138 | $55,870 | $268 |
Figures include the low income tax offset but not the Medicare levy, which is unchanged at 2%. Anyone earning $45,000 or more saves the same $268 a year, about $10.30 a fortnight: 1% of the $26,800 band.
Tax rates for 2026–27
| Taxable income | Tax |
|---|---|
| $0 to $18,200 | Nil |
| $18,201 to $45,000 | 15c for each $1 over $18,200 |
| $45,001 to $135,000 | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 to $190,000 | $31,020 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,370 plus 45c for each $1 over $190,000 |
Other figures that changed on 1 July
- HELP and other study loans: repayments start above $69,528 of repayment income (up from $67,000), at 15c per dollar above that.
- Medicare levy surcharge: for singles without private hospital cover, it starts above $105,000 (up from $101,000).
- Superannuation: the super guarantee stays at 12%. From 1 July 2026 employers must pay it each payday under Payday Super, rather than quarterly.
Will I see it in my pay?
Yes. The ATO updated the withholding tables for 1 July, so your employer should already be taking out a little less tax. If you started a new year and your pay looks the same, check that your payroll software has been updated, or wait for your tax return: any difference comes back then.
Work out your own take-home pay, including super, Medicare and HELP, with the Australia pay and tax calculator.