2025-26 Australian Tax Brackets
These are the income tax rates for Australian residents for the 2025-26 financial year (1 July 2025 to 30 June 2026). As a sole trader, your business profit (income minus expenses) is taxed at these individual rates.
Income Tax Rates 2025-26
| Taxable Income | Tax Rate | Tax On This Bracket |
|---|---|---|
| $0 - $18,200 | 0% | Nil |
| $18,201 - $45,000 | 16c per $1 over $18,200 | Up to $4,288 |
| $45,001 - $135,000 | $4,288 + 30c per $1 over $45,000 | Up to $27,000 |
| $135,001 - $190,000 | $31,288 + 37c per $1 over $135,000 | Up to $20,350 |
| $190,001+ | $51,638 + 45c per $1 over $190,000 | No cap |
These rates do not include the Medicare levy (2%) or HELP/HECS repayments. Use our free calculator to see your total tax including all levies.
Tax Examples at Different Income Levels
Earning $50,000
| Taxable income | $50,000 |
| First $18,200 at 0% | $0 |
| $18,201 - $45,000 at 16% | $4,288 |
| $45,001 - $50,000 at 30% | $1,500 |
| Income tax | $5,788 |
| Medicare levy (2%) | $1,000 |
| Total tax + Medicare | $6,788 |
| Effective tax rate | 13.6% |
| Take-home pay | $43,212 |
Earning $80,000
| Taxable income | $80,000 |
| First $18,200 at 0% | $0 |
| $18,201 - $45,000 at 16% | $4,288 |
| $45,001 - $80,000 at 30% | $10,500 |
| Income tax | $14,788 |
| Medicare levy (2%) | $1,600 |
| Total tax + Medicare | $16,388 |
| Effective tax rate | 20.5% |
| Take-home pay | $63,612 |
Earning $120,000
| Taxable income | $120,000 |
| First $18,200 at 0% | $0 |
| $18,201 - $45,000 at 16% | $4,288 |
| $45,001 - $120,000 at 30% | $22,500 |
| Income tax | $26,788 |
| Medicare levy (2%) | $2,400 |
| Total tax + Medicare | $29,188 |
| Effective tax rate | 24.3% |
| Take-home pay | $90,812 |
Earning $200,000
| Taxable income | $200,000 |
| First $18,200 at 0% | $0 |
| $18,201 - $45,000 at 16% | $4,288 |
| $45,001 - $135,000 at 30% | $27,000 |
| $135,001 - $190,000 at 37% | $20,350 |
| $190,001 - $200,000 at 45% | $4,500 |
| Income tax | $56,138 |
| Medicare levy (2%) | $4,000 |
| Total tax + Medicare | $60,138 |
| Effective tax rate | 30.1% |
| Take-home pay | $139,862 |
Key Things Sole Traders Should Know
Tax-Free Threshold
Every Australian resident gets the first $18,200 of income tax-free. This is built into the tax brackets above - you do not need to apply for it separately. Non-residents do not get this threshold and pay 30c on every dollar from the first dollar earned.
Medicare Levy
The Medicare levy is 2% of your taxable income, charged on top of income tax. It funds Australia's public healthcare system. If your taxable income is below $24,276, you pay no Medicare levy. Between $24,276 and $30,345, the levy is phased in at 10% of the amount over $24,276.
HELP/HECS Repayments
If you have a HELP or HECS debt, compulsory repayments are based on your repayment income. For 2025-26, repayments start at 1% when your income exceeds $54,435 and increase progressively up to 10% for incomes above approximately $159,663.
Marginal vs Effective Tax Rate
Your marginal tax rate is the rate on your last dollar of income. Your effective (or average) tax rate is the total tax divided by your total income. For example, if you earn $80,000, your marginal rate is 30% but your effective rate is about 20.5%.