The 2026–27 tax cut: the new 15% rate explained

Last reviewed October 23, 2026

The 2026–27 tax rates

Taxable income	Tax rate
Up to $18,200	Nil
$18,201 to $45,000	15%
$45,001 to $135,000	30%
$135,001 to $190,000	37%
Over $190,000	45%

Only the first band changed. The tax-free threshold, the other rates and the thresholds are the same as in 2025–26, and the 2% Medicare levy is unchanged.

How much do I save?

The cut is 1% of your income in the $18,201 to $45,000 band:

Income tax, before and after the cut A resident, after the low income tax offset

$30,000 a year $118 less: 2025–26 (16%): $1,188 2026–27 (15%): $1,070
$45,000 a year $268 less: 2025–26 (16%): $3,963 2026–27 (15%): $3,695
$80,000 a year $268 less: 2025–26 (16%): $14,788 2026–27 (15%): $14,520
$150,000 a year $268 less: 2025–26 (16%): $36,838 2026–27 (15%): $36,570

Everyone earning $45,000 or more saves $268 a year

The Medicare levy isn't included; it's 2% either way.

On $30,000: 1% of $11,800, so $118 a year.
On $45,000 or more: 1% of the whole band, so $268 a year, whatever you earn above it.

If your income is low enough that the low income tax offset already cancels your tax, the cut won’t change anything for you.

When will I see it?

Employers use new ATO withholding tables from 1 July, so you’ll have noticed slightly more in each pay since July 2026. You don’t need to do anything to get it.

The next cut: 14% from 1 July 2027

The rate on the same band falls to 14% from 1 July 2027, saving up to another $268 a year. Compared with 2025–26, that’s up to $536 a year.

These two cuts follow the bigger changes of July 2024, when the 19% rate became 16% and the 32.5% rate became 30%.

See your own numbers

The pay calculator shows your 2026–27 take-home pay, weekly, fortnightly or monthly. For how the tax-free threshold works, see the tax-free threshold explained.

Frequently asked questions

What is the 2026–27 tax cut?

From 1 July 2026, the tax rate on taxable income between $18,201 and $45,000 fell from 16% to 15%. The other rates and thresholds didn’t change.

How much will I save?

1% of your income in the $18,201 to $45,000 band. On $30,000 that’s $118 a year. Anyone earning $45,000 or more saves the full $268 a year, about $10 a fortnight.

Why didn’t I get the full $268?

You only get the full amount on income of $45,000 or more. Below that, you save 1% of what you earn above $18,200. If the low income tax offset already cancels all your tax, the cut doesn’t change anything for you.

When is the next tax cut?

On 1 July 2027 the same rate falls again, to 14%, saving up to another $268 a year. Compared with 2025–26, that’s up to $536 a year.

Do I need to do anything to get it?

No. Employers use the ATO’s new withholding tables from 1 July, so it shows up in each pay, and your tax return works out the tax for the year at the new rate.