# response.md

## Tax-Free Threshold – Australian Resident Individual (FY 2025-26)

**Tax-free threshold: $18,200**

### Working

The resident individual income tax scale for 2025-26 is:

| Taxable income | Rate |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19 c per $1 over $18,200 |
| $45,001 – $120,000 | $5,092 + 32.5 c per $1 over $45,000 |
| $120,001 – $180,000 | $29,467 + 37 c per $1 over $120,000 |
| $180,001 + | $51,667 + 45 c per $1 over $180,000 |

The first marginal rate of 19% does not apply until taxable income exceeds $18,200. A resident individual with taxable income of exactly $18,200 pays **$0** in income tax (before offsets). The threshold has been $18,200 since 2012-13 and is unchanged for 2025-26.

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## Controlling Authority

The **Australian Parliament (Commonwealth Parliament)** sets resident individual income tax rates. The rates are given legal force through:

- **Income Tax Rates Act 1986 (Cth)** – the primary legislation specifying the rate schedules; and  
- **Income Tax Assessment Act 1997 (Cth)** / **Income Tax Assessment Act 1936 (Cth)** – which define taxable income and the assessment framework.

The **Australian Taxation Office (ATO)**, as an agency of the Commonwealth, administers and collects the tax, but it does not set the rates — only Parliament can do so.