Australia Tax Rates 2026-27: Personal Income Tax, Company Tax, GST and PAYG

Australia tax law for 2026-27

The 2026-27 resident rate reduction is reflected in the Income Tax Rates Act 1986 as currently compiled. The 2025 cost-of-living legislation reduced the 16% marginal rate to 15% from 1 July 2026, and the current law also provides for a 14% rate from 1 July 2027. Further tax reforms enacted in June 2026 also amended parts of Australia's income-tax framework.

Australian resident individual income tax rates - 2026-27

For Australian residents, the general tax-free threshold remains $18,200. For the 2026-27 income year, the legislated ordinary taxable-income rates are:

These rates exclude the Medicare levy. Tax offsets, deductions and special rules can change the final amount payable.

Foreign resident individual tax rates - 2026-27

Foreign residents generally do not receive the Australian tax-free threshold. Under the current Income Tax Rates Act, the ordinary foreign-resident rates for 2026-27 are:

Foreign residents are generally not liable for the Medicare levy. Residency for tax purposes is determined under Australian tax law and may differ from immigration or citizenship status.

Medicare levy and Medicare levy surcharge

The Medicare levy is generally 2% of taxable income. A reduction or exemption may apply depending on taxable income, family circumstances, Medicare entitlement and other statutory conditions. The Medicare levy surcharge is a separate charge that can apply to higher-income taxpayers who do not have appropriate private patient hospital cover.

The thresholds for levy reductions and the Medicare levy surcharge can be indexed or changed, so taxpayers should use the ATO thresholds applicable to the relevant income year.

Australia company tax rates - 2026

The general company-tax framework distinguishes between base rate entities and other companies. A qualifying base rate entity is generally taxed at 25%, while a company that does not qualify for the base rate is generally taxed at 30%. Eligibility for the lower rate depends on statutory turnover and passive-income tests.

The 30% rate therefore should not be described as the single Australian corporate tax rate. The applicable rate must be determined for the particular company and income year.

Goods and Services Tax (GST)

GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Registered businesses generally include GST in taxable sales and may claim credits for GST included in eligible business purchases. Some supplies are GST-free or input taxed.

PAYG withholding and tax deducted at source

Australia generally uses the Pay As You Go (PAYG) withholding system rather than the expression TDS. Employers and other payers withhold amounts from salary, wages and certain other payments and remit them to the ATO. The amount withheld depends on the applicable ATO withholding schedule, tax file number declaration and taxpayer circumstances.

Businesses and investors may also be subject to PAYG instalments, which are periodic prepayments toward expected income-tax liabilities.

Capital gains tax in Australia

Capital gains tax (CGT) is not a separate federal tax. A net capital gain is generally included in assessable income and taxed as part of income tax. Individuals and trusts may qualify for the CGT discount on certain assets held for at least 12 months, subject to the law and exclusions. Companies generally do not receive the 50% CGT discount.

The 2026 tax reforms amended aspects of the CGT framework. Taxpayers disposing of assets after the commencement of those amendments should check the current Income Tax Assessment Act 1997 and ATO guidance.

Children and special tax rates

Special rates can apply to certain income of minors under 18, particularly unearned or eligible taxable income. Working holiday makers are also subject to a separate statutory rate schedule. These taxpayers should not automatically use the ordinary resident table above.

Historical Australia tax rates - 2014-15 and 2015-16

The following rates are retained solely for historical research. They are not current rates for 2026-27.

Historical resident rates

Historical foreign resident rates

The former Temporary Budget Repair Levy of 2% on taxable income above $180,000 was temporary and is no longer part of the current 2026-27 rate structure. The historical statement that all companies were taxed at 30% is also no longer sufficient because qualifying base rate entities are generally taxed at 25%.