The tax-free threshold for an Australian resident individual for the 2025-26 financial year is $18,200. A resident individual pays no income tax on taxable income up to this amount, with the first marginal rate (16%) applying to taxable income from $18,201 to $45,000.

The resident individual income tax rates (including the tax-free threshold) are set out in the Income Tax Rates Act 1986 (Cth), specifically Schedule 7, read together with the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth), which provide the assessment framework under which those rates are applied and administered by the Australian Taxation Office (ATO).