For the 2025-26 financial year, the top marginal income tax rate of 45 per cent begins to apply at a taxable income of **$200,001**.

The threshold is **$200,000**, meaning the 45 per cent rate applies to taxable income **exceeding** $200,000 (i.e., from $200,001 onwards).

**Working:**
The 2024-25 Federal Budget and subsequent legislation set the following resident individual income tax brackets for 2025-26:

| Taxable income | Tax rate |
|----------------|----------|
| $0 – $18,200 | 0% |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001 – $200,000 | 37% (stage 3) / transitional |
| **$200,001 and over** | **45%** |

Under the revised Stage 3 tax cuts enacted in 2024, the 37 per cent bracket was retained with a higher upper threshold, and the top 45 per cent rate now applies from **$200,001** (previously $180,001 under original Stage 3, but modified by the *Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024*).

The controlling authority that sets the resident individual income tax rates is the **Australian Parliament** (specifically, the rates are enacted through legislation, with the **Treasurer** and **Department of Treasury** responsible for drafting and proposing the rates, and the **Australian Taxation Office (ATO)** administering their collection).