2025-26 Tax Rates and Thresholds for Australian Businesses

What are the individual income tax brackets for 2025-26?

For the 2025-26 financial year, individual resident tax rates are: 0% on income up to $18,200; 19% on $18,201–$45,000; 32.5% on $45,001–$135,000; 37% on $135,001–$190,000; and 45% on income over $190,000. These brackets are unchanged from the Stage 3 tax cuts that took effect on 1 July 2024, so planning around marginal rates should use the same thresholds as last year.

What company tax rate applies to my business?

Companies with an aggregated annual turnover below $50 million that derive at least 80% of their assessable income from business activities pay the lower rate of 25%. All other companies — including large corporates and passive investment companies that fail the 80% test — pay the standard rate of 30%. If your company has recently grown past the $50 million threshold, or if its income mix has shifted toward investment income, your applicable rate may have changed for 2025-26.

How much is the Medicare levy in 2025-26?

The Medicare levy remains at 2% of taxable income for most Australian residents. A Medicare levy reduction applies to individuals below the low-income threshold ($26,000 for 2025-26), and the levy is not payable below $24,276. Small business owners who pay themselves a salary should factor the levy into their take-home pay calculations and quarterly PAYG withholding obligations.

What is the superannuation guarantee rate for 2025-26?

The superannuation guarantee (SG) rate is 12% of ordinary time earnings for 2025-26 — a 0.5% increase from the 11.5% rate that applied in 2024-25. This is the final step-up under the legislated SG increase schedule. Employers must apply the 12% rate to any salary or wages paid on or after 1 July 2025, regardless of when the work was performed. The maximum super contribution base, which caps the SG obligation per quarter, is $65,070 for 2025-26.

What capital gains tax discount applies to my business?

Individuals and trusts that hold a CGT asset for at least 12 months are entitled to a 50% CGT discount on any net capital gain, reducing the effective CGT rate to a maximum of 22.5% (for top marginal rate taxpayers). Companies do not access the 50% discount. Small businesses may also be eligible for additional CGT concessions — the 15-year exemption, 50% active asset reduction, retirement exemption (up to $500,000 lifetime limit), and rollover concessions — subject to meeting the $6 million net asset value test or the $2 million turnover test.

What instant asset write-off thresholds apply in 2025-26?

For 2025-26, the instant asset write-off threshold for small businesses (turnover under $10 million) is $20,000 per asset. This allows immediate deduction of eligible depreciating assets costing less than $20,000, rather than depreciating them over several years. Assets must be first used or installed ready for use before 30 June 2026. Assets costing $20,000 or more enter the small business simplified depreciation pool. Note that the $20,000 threshold is subject to annual budget announcements — confirm with your accountant before making purchasing decisions based solely on this figure.