Glossary · Australian property
Marginal tax rate.
The tax rate that applies to your next dollar of income, determined by where your taxable income sits in Australia's progressive tax bracket schedule.
Australia uses a progressive income tax structure. Each income bracket attracts a different marginal rate, and Medicare Levy plus Medicare Levy Surcharge can add 2-3.5% on top.
FY2025-26 brackets: $0-$18,200 (0%), $18,201-$45,000 (16%), $45,001-$135,000 (30%), $135,001-$190,000 (37%), $190,001+ (45%). Plus Medicare 2% (with thresholds + carve-outs for low income).
Marginal rate matters for negative-gearing math (refund = loss × marginal rate), CGT (capital gain × half × marginal rate after 50% discount), and FHSS contribution decisions (saving = (marginal rate - 15%) × contribution × 0.85).
Worked example
Taxable income $135K, marginal rate 30% (you're at the top of the bracket; next dollar moves you to 37%).
Source
ITAA 1997 + annual ATO rates and thresholds publication.
Related terms
Open the playbook — 11 chapters end-to-end, every threshold cited.