# Response

**Tax-free threshold (FY2025-26):** $18,200

This is the amount of taxable income an Australian resident individual can earn before any income tax applies. Income above this threshold is taxed progressively at the first marginal rate (16% for the 2025-26 income year) and subsequent higher marginal rates.

**Controlling authority:** The resident individual income tax rates (including the tax-free threshold) are set out in the **Income Tax Rates Act 1986 (Cth)**, read together with the **Income Tax Assessment Act 1997 (Cth)** and **Income Tax Assessment Act 1936 (Cth)**, which provide the legislative framework for the imposition and assessment of income tax in Australia. The Australian Taxation Office (ATO) administers these rates but does not set them — that is a matter for the Commonwealth Parliament.