Personal income tax rates will change on July 1, 2026.

The reduction in the personal income tax rate that was announced in the Federal Budget for 2025–2026 was confirmed on the final day of Parliament. For the $18,201–$45,000 tax bracket, the 1% reduction will lower the current rate of 16% to 15% on July 1, 2026, and subsequently to 14% on July 1, 2027. 

Increase to the Medicare Levy Threshold for Low-Income Earners
Low-income earners are exempt from paying the compulsory 2% Medicare levy until their assessable income exceeds a certain threshold. This threshold varies depending on individual circumstances, such as whether you’re single, a pensioner, or have dependent children.

Parliament has now passed the increase to the Medicare levy threshold, as announced in the Federal Budget. This change will be applied retrospectively from 1 July 2024, allowing eligible taxpayers to benefit when lodging their 2024–25 tax return.