Australia's Stage 3 tax cuts have been in effect since July 1, 2024, but the benefits compound with each pay run — and many Australians still under-estimate the savings when planning salary negotiations or super top-ups.
The 2025/26 brackets
- 0-$18,200: 0%
- $18,201-$45,000: 16% (was 19%)
- $45,001-$135,000: 30% (was 32.5% up to $120k, 37% above)
- $135,001-$190,000: 37%
- $190,001+: 45%
The previous 37% bracket ceiling was $180,000. Raising it to $190,000 is the largest single-bracket shift in the reform.
Annual savings by income
- $60,000 salary: A$804 more take-home/year
- $90,000: A$1,654
- $120,000: A$2,429
- $150,000: A$3,729
- $190,000+: A$4,529 (capped)
For an average $95,000 income, that's roughly $32 extra per fortnightly pay.
Super guarantee now 12%
Alongside tax cuts, the Super Guarantee hit its legislated 12% ceiling on July 1, 2025. If your salary package is "plus super", your employer now pays 12% of ordinary time earnings to your fund. For a $100,000 package, that's $12,000/year — up from $11,000 the prior year.
Low and Middle Income Tax Offset (LMITO)
LMITO was not restored. The Low Income Tax Offset (LITO) remains at max $700, phasing out between $37,500 and $66,667 taxable income.
What to do
1. Check your payslip: the ATO updated PAYG schedules from July 1, 2024. If your employer is still using 2023/24 tables, you'll get a refund at tax time but miss the fortnightly cash flow. 2. Consider a salary-sacrifice super top-up. The concessional cap is $30,000/year — and with the tax cut, the 15% super tax is now even more attractive vs the 30% marginal rate up to $135k. 3. If you're on $190k+, the cap means no more savings — but the Division 293 threshold stays at $250k, so super sacrifice still works up to that limit.