Budget Tax Comparison Calculator
See exactly how the 2026-27 Budget changes your income tax and take-home pay.
Rates updated 2 May 2026| 2025–26 | 2026–27 | Change | |
|---|---|---|---|
| Income Tax | — | — | — |
| Medicare Levy | — | — | — |
| Total Tax | — | — | — |
| Take-Home (annual) | — | — | — |
| Take-Home (weekly) | — | — | — |
How the 2026-27 Tax Cut Works
The tax rate on income between $18,201 and $45,000 drops from 16% to 15% from 1 July 2026. This is already law — legislated by the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024.
The saving is simple: 1% of the income in that bracket. Since the bracket is $26,800 wide ($45,000 minus $18,200), the maximum saving for anyone earning $45,000 or above is exactly $268 per year — $5.15 per week. For anyone earning above $45,000, the saving is the same flat $268 regardless of income level.
This is the second phase of the Stage 3+ tax cut series. Phase 1 reduced the rate from 19% to 16% in July 2024. Phase 3 — legislated for July 2027 — reduces it again from 15% to 14%, for a further $268 saving.
2025-26 vs 2026-27 Tax Rates
| Income Bracket | 2025–26 Rate | 2026–27 Rate | Change |
|---|---|---|---|
| $0 – $18,200 | 0% | 0% | — |
| $18,201 – $45,000 | 16% | 15% | ↓ 1% |
| $45,001 – $135,000 | 30% | 30% | — |
| $135,001 – $190,000 | 37% | 37% | — |
| $190,001+ | 45% | 45% | — |
Plus 2% Medicare levy. These are marginal rates — each rate applies only to the income in that bracket, not your total income.
What About Budget Night?
The 16%→15% cut is already legislated and included in this calculator. Additional changes announced on Budget night (Tuesday 12 May 2026, 7:30pm AEST) will be added within hours. Potential additions include energy rebates and changes to low-income tax offsets — nothing is confirmed until the Treasurer speaks.
Frequently Asked Questions
If you earn $45,000 or more, you'll save exactly $268 per year — $5.15 per week. This is because the tax rate on income between $18,201 and $45,000 drops from 16% to 15% from 1 July 2026. The saving is the same flat amount for all incomes above $45,000.
If you earn between $18,201 and $45,000, you save 1% of the income above $18,200. For example, on $30,000 you'd save about $118/year. On $45,000 you save the full $268. Below $18,200, there's no change — you already pay zero income tax (you're under the tax-free threshold).
The rate change takes effect from 1 July 2026. If you're a PAYG employee, your employer will apply the new withholding rate in their payroll software from that date — you'll see the difference in your first pay after 1 July 2026. Self-employed people will see the benefit when they lodge their 2026-27 tax return.
No. The Medicare levy remains at 2% of taxable income. The Medicare Levy Surcharge (1–1.5% for high earners without private health cover) is also unchanged. This calculator includes Medicare levy in the comparison but the change is $0 — it's only the income tax brackets that are moving.