Changes To Personal Income Tax Rates From 1 July 2026
From 1 July 2026, personal income tax rates will change.
On the last sitting day of Parliament, the personal income tax rates reduction announced in the 2025-26 Federal Budget was confirmed.
The modest reduction of 1% applies to the $18,201-$45,000 tax bracket, reducing from its current rate of 16% to 15% from 1 July 2026, then to 14% from 2027-28. The saving from the tax cut represents a maximum of $268 in the 2026-27 year and $536 from the 2027-28 year.
With a 1 July 2026 start date, the outcome of the Federal election on 3 May 2025 and subsequent budgets will determine whether this change comes to fruition.
Medicare levy threshold change for low-income earners:
Low-income earners do not pay the compulsory 2% Medicare levy until their assessable income reaches the threshold. The threshold is different depending on whether you are a single taxpayer, pensioner, and the number of children you have that are dependent on you.
As well as the new tax rates, parliament has confirmed the increase to the Medicare levy threshold announced in the Federal Budget. The threshold change is backdated to 1 July 2024, which means that taxpayers will benefit when they lodge their 2024-25 tax return.
| Earner | 2024-25 | 2025-26 |
| Singles | $26,000 | $27,222 |
| Families | $43,846 | $45,907 |
| Single seniors & pensioners | $41,089 | $43,020 |
| Family seniors & pensioners | $57,198 | $59,886 |
| Family + additional child or student | $4,216 | $4,027 |
See our Federal Budget 2025-26 summary for more details.
For individual advice on the new tax rates, get in touch with your Aintree Group adviser.
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your adviser.
