# Australian resident individual tax-free threshold — FY2025-26

*Benchmarking hypothetical, not tax advice. Figures as at FY2025-26.*

## Tax-free threshold (dollars)

**$18,200**

A resident individual pays **no income tax** on taxable income up to and including **$18,200** for the 2025–26 financial year (1 July 2025 to 30 June 2026). The first marginal rate applies to taxable income **above** that amount.

### Working

1. **Financial year:** FY2025-26 runs from 1 July 2025 to 30 June 2026.
2. **Resident scale:** Australian tax residents are taxed on taxable income under the resident individual income tax scale.
3. **Nil-rate bracket:** The lowest bracket is taxed at **0%**. That bracket covers taxable income from **$0** up to **$18,200**.
4. **First marginal rate:** Taxable income above **$18,200** is taxed at the next bracket rate (the first positive marginal rate on the resident scale for 2025–26).

The answer as a dollar figure: **$18,200** (18,200 dollars).

## Controlling authority for resident individual income tax rates

The resident individual **income tax rates** (including the nil-rate threshold and marginal rates) are set by the **Income Tax Rates Act 1986** (often cited as **ITRA 1986**). That Act is read together with the **Income Tax Assessment Act 1997** (**ITAA 1997**), which defines how taxable income is calculated; the Rates Act specifies the rates and brackets applied to that income.

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## Approach

This was a **closed-book** task: only the prompt was available (no files in an `inputs/` directory). The threshold was identified as the top of the **0%** resident bracket for FY2025-26—**$18,200**—distinct from foreign concepts such as a US standard deduction. The controlling authority for the rate scale was named as **ITRA 1986** (Income Tax Rates Act 1986), with **ITAA 1997** noted as the companion assessment Act for taxable income.