Australian Tax Rates
Everything you need to know about income tax rates, Medicare levy, HECS-HELP repayments, and how the Australian tax system works.
Australian Tax Brackets 2025-26
The ATO's marginal tax rates determine how much tax you pay on each dollar of income.
| Taxable Income | Tax Rate | Tax On This Bracket |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | 16c for each $1 |
| $45,001 – $135,000 | 30% | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 + 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,638 + 45c for each $1 over $190,000 |
Understanding Marginal Tax Rates
Australia uses a progressive tax system. This means you don't pay the same rate on all your income—you pay higher rates on higher portions. The first $18,200 is completely tax-free (the "tax-free threshold").
For example, if you earn $100,000, you don't pay 30% on the entire amount. You pay:
- $0 on the first $18,200
- 16% on $18,201 – $45,000
- 30% on $45,001 – $100,000
Medicare Levy Explained
The Medicare levy helps fund Australia's public health system.
Standard Medicare Levy Rate
Most Australian residents pay a Medicare levy of 2% of their taxable income. This is in addition to the tax you pay on your income.
Low-Income Thresholds (2024-25)
- Singles: No levy if income is $26,000 or less. Reduced levy for income between $26,000 and $32,500.
- Families: Threshold increases based on number of dependents.
- Seniors/Pensioners: Higher thresholds apply.
Medicare Levy Surcharge
High-income earners without private hospital cover may also pay the Medicare Levy Surcharge (MLS) of 1% to 1.5% depending on income. This encourages people to take out private health insurance.
| Income | MLS Rate |
|---|---|
| $93,000 or less | 0% |
| $93,001 – $108,000 | 1.0% |
| $108,001 – $144,000 | 1.25% |
| $144,001 and over | 1.5% |
HECS-HELP Repayment Guide
Understanding your student loan repayment obligations.
What is HECS-HELP?
HECS-HELP (Higher Education Contribution Scheme – Higher Education Loan Program) is an Australian Government loan that helps eligible students pay their tuition fees. You only start repaying once your income exceeds the minimum repayment threshold.
2024-25 Repayment Thresholds
Compulsory repayments begin when your Repayment Income (RI) exceeds $54,435. The percentage increases as your income rises:
- $54,435 – $62,850: 1.0%
- $62,851 – $66,620: 2.0%
- $66,621 – $70,618: 2.5%
- $70,619 – $74,855: 3.0%
- $74,856 – $79,346: 3.5%
- $79,347 – $84,107: 4.0%
- Continues up to 10% for incomes over $159,664
Key Points
- HECS debt is indexed annually to inflation (CPI)
- Repayments are calculated on your entire Repayment Income, not just the amount above the threshold
- Voluntary payments can be made at any time without penalty
- Debt is cancelled upon death
Frequently Asked Questions
Common questions about Australian income tax.