Calculate your income tax: 2025-26
How to use the income tax calculator
Our income tax calculator is very simple to use. Simply input your annual gross income (salary before tax is deducted) and select whether to include the Medicare levy (2% of your taxable income). You can toggle this on and off to see how much tax you’ll pay with and without the levy.
Once you’ve done this, you’ll see how big a slice of your salary pie is being eaten away by tax. This is also compared to the previous financial year, clearly showing how much you’re saving (or the amount you’re paying extra).
What is the Medicare levy surcharge?
The Medicare levy surcharge (MLS) is a charge payable by those who don’t hold a private hospital cover policy and earn above a certain threshold. As of the 2025-26 financial year, you’ll have to pay between 1% and 1.5% of your taxable income if you’re earning above $101,000 as a single or $202,000 as a couple to avoid the MLS. The amount you’ll have to pay depends on your income and your dependants, as thresholds increase by $1,500 per child. Any private hospital insurance policy will suffice, so even having a basic policy will ensure you won't need to pay the surcharge.
What are the income tax thresholds for the 2025-26 financial year?
The following table shows the current tax thresholds as of the 2025-26 financial year:
| Taxable income | Tax payable – 2025-26 |
|---|---|
|
Up to $18,200
|
Nil
|
|
$18,201 – $45,000
|
16c for each $1 over $18,200
|
|
$45,001 – $120,000
|
$4,288 plus 30c for each $1 over $45,000
|
|
$120,001 – $180,000
|
$31,288 plus 37c for each $1 over $135,000
|
|
$180,001 and over
|
$51,638 plus 45c for each $1 over $190,000
|
| Source: Australian Taxation Office | |
This tax bracket has remained unchanged from the 2024-25 financial year.
Ways to reduce your taxable income
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Claim all valid work-related deductions
If you're buying things like furniture or goods for your business (or as part of your line of work), make sure you claim them. These are freebies when it comes to cutting back your taxable income.
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Make charitable donations
Although you might not realise it, donations to certain organisations can be claimed as tax deductions. As long as the charity or company you donate to is classed as a deductible gift recipient (DGR) and your donation meets all the ATO's criteria, you should be able to claim it.
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Increase your super contributions
There are ways to make super contributions that lower your taxable income. These can be concessional contributions, which are made from your pre-tax income and subsequently taxed at a rate of 15%, or non-concessional contributions, which can also qualify for tax deductions in some cases.
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Look into a salary packaging arrangement
A salary packaging agreement, such as a novated lease, allows you to make contributions from your pre-tax salary towards a benefit like a car. This means your taxable income will be lowered.
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Explore the instant asset write-off
If you're buying a depreciating asset for your business, it could qualify for the instant asset write-off (IAWO). This allows businesses to claim an instant deduction on the asset up to $20,000, as of the 2025-26 financial year.
Are there any changes to income tax on the horizon?
Yes – although tax rates didn't change in the 2025-26 financial year, the Australian Government announced that the 2026-27 financial year will see a decrease in rates for the lowest taxable income bracket. This rate will reduce from 16% to 15% for those earning between $18,201 and $45,000 in 2026-27 and from 15% to 14% in 2027-28.
If you earn $30,000 per year, your total annual income tax will fall from $1,888 to $1,770 in the 2026-27 financial year and $1,652 in 2027-28. Alternatively, for someone receiving $45,000 annually, this means your payable tax will drop from $4,288 in 2024-25 and 2025-26 to $4,020 in 2026-27 and $3,752 in 2027-28.
