Legislated Applies from 1 July 2027 · Updated
Income tax: the 16% rate is now 15%, and 14% from 1 July 2027
Since 1 July 2026, income between $18,200 and $45,000 is taxed at 15% instead of 16%. The rate is legislated to fall again, to 14%, from 1 July 2027. Both steps are law; the second has not started yet.
The rate on income in the second bracket
| Income year | Rate on $18,200 – $45,000 | Status |
|---|---|---|
| 2025–26 | 16% | Ended |
| 2026–27 | 15% | In effect |
| From 1 July 2027 | 14% | Legislated |
The other rates in 2026–27 are unchanged from 2025–26: 30%, 37% and 45% in the higher brackets, with the first $18,200 tax-free.
What it means for your numbers
Because the cut applies only to income inside the second bracket, everyone with income above $18,200 gets some of it, and people earning above $45,000 get the full amount for that bracket. The tax rates page shows the difference in dollars at several incomes, and the take-home pay calculator works out 2025–26 and 2026–27 for your own income.
Pay calculations on this site will use the 14% rate once the 2027–28 rates are published in full and tested.
Sources
Figures last checked against official sources: . General information, not financial or tax advice.
Page history
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