The Stage 3 tax cuts came into effect on 1 July 2024 — and from 1 July 2026 a further legislated cut dropped the second bracket from 16% to 15%, worth up to $268 a year. Many people still aren't sure exactly what changed and how it affects their weekly pay. This guide explains the current rates clearly — and shows take-home pay at every salary level for 2026–27.
The original Stage 3 legislation would have given large cuts to high incomes and minimal relief to low and middle incomes. The package was amended in early 2024 to redistribute benefits more broadly, and a further round of cuts was legislated in June 2026. Here's what the rates look like now in 2026–27:
Two changes stack together. Stage 3 (from July 2024) widened the 30% bracket to $135,000 and cut the old 32.5% rate to 30%. Then from 1 July 2026, the second bracket dropped again — 16% to 15% — worth up to $268/year for anyone earning $45,000 or more, with another cut to 14% legislated for 1 July 2027.
These figures are for 2026–27, a resident taxpayer with no HECS debt, LITO applied, and 2% Medicare levy. Employer super (12%) is on top of the salary shown.
| Gross salary | Income tax | Medicare levy | Take-home/yr | Take-home/wk | Effective rate |
|---|---|---|---|---|---|
| $40,000 | $2,695 | $800 | $36,505 | $702 | 8.7% |
| $55,000 | $6,845 | $1,100 | $47,055 | $905 | 14.4% |
| $70,000 | $11,520 | $1,400 | $57,080 | $1,098 | 18.5% |
| $80,000 | $14,520 | $1,600 | $63,880 | $1,228 | 20.2% |
| $95,000 | $19,020 | $1,900 | $74,080 | $1,425 | 22.0% |
| $110,000 | $23,520 | $2,200 | $84,280 | $1,621 | 23.4% |
| $130,000 | $29,520 | $2,600 | $97,880 | $1,882 | 24.7% |
| $150,000 | $36,570 | $3,000 | $110,430 | $2,124 | 26.4% |
| $180,000 | $47,670 | $3,600 | $128,730 | $2,476 | 28.5% |
| $200,000 | $55,870 | $4,000 | $140,130 | $2,695 | 29.9% |
Combining the amended Stage 3 package (July 2024) with the further cut from July 2026, here's the total saving versus the pre-2024 scales:
| Income | Annual tax saving vs pre-2024 | Weekly saving |
|---|---|---|
| $40,000 | +$872/yr | +$16.77/wk |
| $60,000 | +$1,447/yr | +$27.83/wk |
| $80,000 | +$1,947/yr | +$37.44/wk |
| $100,000 | +$2,447/yr | +$47.06/wk |
| $120,000 | +$2,947/yr | +$56.67/wk |
| $135,000 | +$3,997/yr | +$76.87/wk |
| $180,000 | +$3,997/yr | +$76.87/wk |
| $190,000+ | +$4,797/yr (max) | +$92.25/wk (capped) |
Compared with the pre-2024 scales, the combined saving now reaches $4,797/year at $190,000 and holds flat above that. The 1 July 2026 cut added up to $268/year on top of the original Stage 3 saving for everyone earning $45,000 or more.
One more legislated cut is still to come: from 1 July 2027 (the 2027–28 financial year), the 15% rate on income between $18,201 and $45,000 drops to 14%, and a new $250 Working Australians Tax Offset begins. Together they are worth up to $536 a year compared with 2025–26 for most workers.
$0–$18,200: 0% · $18,201–$45,000: 14% (down from 15%) · $45,001–$135,000: 30% · $135,001–$190,000: 37% · $190,001+: 45% · plus the $250 Working Australians Tax Offset
If you have a HECS-HELP debt, your compulsory repayment is added on top of income tax and Medicare levy. This is calculated on your total repayment income and is not tax-deductible. At $95,000 with HECS, the 2026–27 marginal system adds about $3,821/year (15c per dollar above the $69,528 threshold) — taking your weekly take-home from $1,425 down to about $1,351.
Use our Pay & Tax calculator to model your exact situation including HECS, salary sacrifice, and allowances.
With marginal rates at 30% (plus 2% Medicare) for most middle-income earners, salary sacrifice into super is exceptionally efficient. Contributions are taxed at just 15% inside super, meaning every dollar you sacrifice saves you the difference between your total marginal rate and 15%.
At $95,000 salary: marginal rate is 30% plus 2% Medicare (32% total), super tax is 15%, so you save 17 cents on every dollar sacrificed. Sacrificing $10,000/year into super costs you just $6,800 in take-home pay, but adds $8,500 (after 15% contributions tax) to your super balance — $1,700 more than it cost you.
Enter your salary, HECS debt, salary sacrifice, and other details to see your precise weekly take-home — across 6 tax years including 2026–27.
Use the free Pay & Tax Calculator →The big change happened on 1 July 2024, and the smaller 1 July 2026 cut is worth up to about $5 a week — easy to miss on a payslip. If you're comparing to 2022–23 or 2023–24, the difference is clear; the 2026 cut on its own is more subtle.
No — the Medicare levy remains at 2% of taxable income in 2026–27, with a low-income threshold around $28,011 (below which no levy applies, then a reduced levy shades in). The Medicare Levy Surcharge (1–1.5% for higher earners without private hospital cover, from $105,000 single in 2026–27) is separate.
All income — salary, dividends, rental income, interest — is added together and taxed at your marginal rate. The same brackets apply. The main difference is that some investment income (capital gains held 12+ months) gets the 50% CGT discount before being added to your income.