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Enter your salary to instantly see your income tax, Medicare levy, LITO offset, HELP repayment and exact take-home pay — for both the current 2026–27 year and the 2025–26 year, using official ATO rates.
Your Income Details
Financial year
Gross annual income
$
Residency status
Salary sacrifice (pre-tax)
$
Work-related deductions
$
Medicare levy exemption
Private health insurance?
HECS/HELP debt?
Super included in salary?
PAYG tax already withheld (optional)
$
Tax Breakdown
Annual Take-Home Pay
—
Annual
Monthly
Fortnightly
Estimates only, for planning purposes — not financial or tax advice. Confirm your exact liability via ATO myTax or a registered tax agent.
📊 Marginal vs Effective Tax Rate
🎯 Tax Bracket Visual
💵 Refund Estimate
📈 Salary Increase Insight
⚖️ Compare Two Salaries
$
$
⏱️ Last reviewed: 4 August 2026 · Written and reviewed by Mohsin Iqbal under our editorial policy and calculation methodology. Tax rules change — always check your own circumstances against current ATO guidance.
📖 Approx. 15 min read💰 2026–27 & 2025–26 ATO rates🔄 Updated 4 August 2026
Australia's tax-free threshold is $18,200 — you pay nothing below this.
The 2026–27 second-rate bracket dropped to 15% (from 16% in 2025–26) under legislated cost-of-living tax cuts — every resident earning above $45,000 saves an extra $268 a year from this change alone.
The Medicare levy is 2% of taxable income for most residents, with a low-income shade-in below $35,013.
LITO can cut up to $700 from your tax bill if you earn under $66,667 — it's applied automatically, you don't need to claim it.
HELP/HECS now uses a marginal repayment system (since 2025–26) — you only repay a percentage of income above the threshold, not a flat percentage of your whole salary.
This calculator supports both the current 2026–27 year and the 2025–26 year — useful if you're still finalising last year's return.
Quick Answer
Australian income tax is calculated on a progressive (marginal) scale: you pay 0% on the first $18,200 of taxable income, then increasing rates on each portion above that, up to 45% on income over $190,000. On top of income tax, most residents pay a 2% Medicare levy. For 2026–27, someone earning $95,000 with no offsets or debts pays approximately $19,020 in income tax plus $1,900 Medicare levy, taking home about $74,080 a year — use the calculator above for your exact figure, including HELP debt, salary sacrifice, and private health insurance status.
How Australian Income Tax Works
Australia uses a progressive marginal tax system administered by the Australian Taxation Office (ATO). This means you don't pay one flat rate on your entire income — instead, your income is divided into brackets, and each bracket is taxed at its own rate. Only the portion of your income that falls within a given bracket is taxed at that bracket's rate, which is why your marginal rate (the rate on your next dollar earned) is always higher than your effective rate (your total tax as a percentage of your total income).
On top of income tax, most residents pay the Medicare levy (2% of taxable income), which funds Australia's public healthcare system. Higher earners without private hospital cover may also pay the Medicare Levy Surcharge. Lower earners receive the Low Income Tax Offset (LITO), which directly reduces the tax payable. If you have a HELP/HECS study loan, compulsory repayments are calculated separately and added to your total deductions.
2026–27 Australian Resident Tax Brackets
These rates apply from 1 July 2026 to 30 June 2027 — the current financial year. The second bracket rate reduced from 16% to 15% under legislated cost-of-living tax cuts, with a further reduction to 14% legislated to commence 1 July 2027.
Taxable Income
Rate
Tax on This Bracket
$0 – $18,200
0%
Nil
$18,201 – $45,000
15%
15c per $1 over $18,200
$45,001 – $135,000
30%
$4,020 + 30c per $1 over $45,000
$135,001 – $190,000
37%
$31,020 + 37c per $1 over $135,000
$190,001+
45%
$51,370 + 45c per $1 over $190,000
2025–26 Australian Resident Tax Brackets
These rates applied from 1 July 2025 to 30 June 2026 — useful if you're still completing or checking your 2025–26 tax return.
Taxable Income
Rate
Tax on This Bracket
$0 – $18,200
0%
Nil
$18,201 – $45,000
16%
16c per $1 over $18,200
$45,001 – $135,000
30%
$4,288 + 30c per $1 over $45,000
$135,001 – $190,000
37%
$31,288 + 37c per $1 over $135,000
$190,001+
45%
$51,638 + 45c per $1 over $190,000
ℹ️ Every resident earning above $45,000 pays exactly $268 less income tax in 2026–27 than they would have under the 2025–26 rates — the 1 percentage-point cut on the $18,201–$45,000 band, applied to that full $26,800 slice of income. Below $45,000, the saving scales down proportionally.
Medicare Levy Explained
Most Australian residents pay a Medicare levy of 2% of their taxable income, funding the public Medicare healthcare system. It's charged in addition to income tax, not included in the bracket rates above. Low-income earners are protected by a "shade-in" range: below the lower threshold you pay nothing, between the two thresholds you pay 10 cents for every dollar above the lower threshold (rather than the full 2%), and above the upper threshold the full 2% applies.
Income
Medicare Levy
At or below $28,011
Nil
$28,012 – $35,013 (shade-in)
10% of the amount over $28,011
Above $35,013
Full 2% of taxable income
⚠️ 2025–26 note: The ATO's own published guidance flags that the Medicare levy low-income thresholds shown above for the 2025–26 year were announced in the 2026–27 Federal Budget and are not yet law as of this page's last review. This calculator uses the ATO's currently published reference figures for both years, consistent with the ATO's own website — but if you're finalising a 2025–26 return before this legislation passes, confirm the current position with a registered tax agent or check the ATO's Medicare levy reduction page directly for the latest status.
The Medicare Levy Surcharge (MLS)
The MLS is a separate, additional charge — not a replacement for the standard Medicare levy — aimed at encouraging higher earners to take out private hospital cover rather than relying solely on the public system. It applies only if your income exceeds the relevant threshold and you don't hold an appropriate private hospital insurance policy.
Singles Income (2026–27)
MLS Rate
Up to $105,000
Nil
$105,001 – $123,000
1.0%
$123,001 – $164,000
1.25%
$164,001+
1.5%
Family thresholds are higher, increasing by $1,500 for each dependent child after the first. Since the MLS is calculated on your full income once triggered, a basic private hospital policy (often $1,000–$2,500/year) is frequently cheaper than paying the surcharge for singles earning comfortably above the threshold — model both in the calculator above by toggling the private health insurance switch.
Low Income Tax Offset (LITO)
LITO is a non-refundable tax offset that directly reduces the tax you owe — it isn't a deduction against your income, and you don't need to apply for it; the ATO (and this calculator) applies it automatically based on your taxable income.
Combined with the $18,200 tax-free threshold, LITO effectively means Australian residents can earn up to roughly $22,575–$22,867 (depending on the year's bracket rates) before any net income tax is payable.
HELP/HECS Repayments
From the 2025–26 income year, compulsory HELP/HECS repayments moved to a marginal repayment system — a major reform. Previously, once your income crossed a threshold, you paid a flat percentage of your entire repayment income, creating a "cliff effect" where a small pay rise could trigger a disproportionately large jump in repayments. Under the new system, you only pay on the income above each threshold, similar to how income tax brackets work.
Repayment Income (2026–27)
Repayment Rate
$0 – $69,528
Nil
$69,529 – $129,717
15c per $1 over $69,528
$129,718 – $186,050
$9,028 + 17c per $1 over $129,717
$186,051+
10% of total repayment income
✅ At the very top end, the system switches to a flat 10% of your total repayment income rather than continuing the marginal calculation indefinitely — this cap is precisely calibrated so the two methods produce almost identical results right at the crossover point, then the flat rate takes over for simplicity at high incomes. This calculator correctly applies that cap; a repayment income of $300,000 gives a HELP repayment of exactly $30,000, not a higher marginal-only figure.
Formula Sheet
Taxable income = Gross salary − Salary sacrifice − Deductions
Income tax = Bracket base amount + (Taxable income − bracket floor) × bracket rate
Net income tax = Income tax − LITO (capped at Income tax, never negative)
Medicare levy = 2% of taxable income (with low-income shade-in)
Take-home pay = Gross salary − Salary sacrifice − Net income tax − Medicare levy − MLS − HELP repayment
Worked Examples — Common Australian Salaries (2026–27)
The following examples assume an Australian resident with no HELP debt, no salary sacrifice, and private hospital cover (so no MLS applies).
Salary
Income Tax
Medicare Levy
LITO Applied
Take-Home Pay
Effective Rate
$45,000
$4,020
$900
$325
$40,405
10.2%
$60,000
$8,520
$1,200
$100
$50,380
16.0%
$80,000
$14,520
$1,600
$0
$63,880
20.2%
$100,000
$20,520
$2,000
$0
$77,480
22.5%
$120,000
$26,520
$2,400
$0
$91,080
24.1%
$150,000
$36,570
$3,000
$0
$110,430
26.4%
How Salary Sacrifice Reduces Your Tax
Salary sacrifice redirects part of your pre-tax salary into superannuation, reducing your taxable income and therefore your income tax. On a $100,000 salary with $10,000 in salary sacrifice, taxable income drops to $90,000 — saving roughly $3,000 in income tax at a 30% marginal rate. The sacrificed amount is taxed at 15% inside super instead of your marginal rate, which is why this is a common, effective strategy for middle-to-higher income earners. Model your own numbers using the salary sacrifice field in the calculator above, or see our Salary Sacrifice Guide for a deeper dive into caps and eligibility.
Tax Deductions That Reduce Your Taxable Income
Deductions directly reduce your taxable income — a $5,000 deduction at a 30% marginal rate saves $1,500 in tax. Common legitimate deductions for Australian employees include:
Working from home expenses — using the ATO's fixed-rate method, requiring records of hours worked from home across the full year.
Vehicle expenses for work travel — the cents-per-kilometre method covers up to 5,000km without a logbook.
Phone and internet — the work-use percentage of personal bills, supported by a usage record.
Income protection insurance — premiums are deductible when the policy is held outside super.
Union fees and professional memberships — fully deductible when related to your employment.
Self-education expenses — courses directly related to your current role, not a career change.
Tax agent fees — deductible in the year paid.
Step-by-Step Guide to Using This Calculator
Select your financial year — 2026–27 (current) or 2025–26.
Enter your gross annual income (before tax).
Select your residency status — most employees select "Australian resident."
Add any salary sacrifice or work-related deductions, if applicable.
Indicate your private health insurance status — this affects whether MLS applies.
Indicate whether you have a HELP/HECS debt.
If your salary was quoted as a total package including super, switch "Super included in salary?" to "Yes."
Read your results — take-home pay, full tax breakdown, and a visual split of where your gross salary goes.
Common Mistakes
Confusing marginal rate with effective rate. Being "in the 30% bracket" doesn't mean 30% of your whole income goes to tax — only the portion within that bracket does.
Forgetting the Medicare levy is separate from income tax. Both are shown together on a payslip but calculated independently.
Assuming super is part of taxable income. Employer Superannuation Guarantee contributions are not included in your taxable income; only salary sacrifice affects it.
Using last year's bracket rates by habit. The second-bracket rate has changed in consecutive years (16% → 15%, with 14% legislated for 2027–28) — always confirm which financial year you actually need.
Not accounting for HELP under the new marginal system. Repayments are now calculated differently than in years before 2025–26; older mental math or old calculators may overstate what you'll actually repay.
Who Should Use This Calculator?
Employees checking their take-home pay before accepting a new role or negotiating salary.
Contractors and sole traders estimating tax on business profit (the same resident brackets apply to profit, though your overall obligations differ — see our Tax Return Calculator for a fuller picture).
Anyone with a HELP/HECS debt wanting to understand their compulsory repayment under the new marginal system.
People comparing job offers that quote salary differently (base vs total package including super).
Those completing a 2025–26 tax return after 30 June 2026, who need the correct prior-year rates rather than the current year's.
Residency Categories Explained
Category
Tax-Free Threshold?
Medicare Levy?
Notes
Australian resident
Yes, $18,200
Yes, 2%
Standard rates apply; eligible for LITO
Foreign resident
No
No
30% from $0 to $135,000, then standard higher brackets
Working Holiday Maker
No
No
15% flat on first $45,000 (subclass 417/462 visa, while employer is registered)
Residency for tax purposes is based on where you actually live and your ties to Australia — not your visa type or citizenship alone. The ATO applies several tests to determine residency; if you're unsure of your status, the ATO's residency tool or a registered tax agent can clarify.
Frequently Asked Questions
The tax-free threshold is $18,200. If your total taxable income is $18,200 or less, you pay no income tax. You claim it by selecting "Yes" on your Tax File Number declaration when starting a job — if you have multiple jobs, only claim it from one employer to avoid under-withholding.
It depends on your taxable income, residency status, and any offsets or debts. Australia uses progressive brackets from 0% to 45%, plus a 2% Medicare levy for most residents. Enter your salary into the calculator above for your exact figure, including LITO, HELP and MLS.
Your refund is the difference between the tax withheld from your pay during the year (PAYG) and your actual tax liability calculated at tax time. If more was withheld than you owed, you get the difference back. See our dedicated Tax Return Calculator for a refund-focused estimate.
A 2% charge on taxable income for most Australian residents, funding the public Medicare healthcare system. It's separate from income tax, with a low-income shade-in range where reduced or no levy applies.
HELP (Higher Education Loan Program, commonly called HECS) is a government loan for tertiary study. Compulsory repayments are collected through the tax system once your income exceeds the repayment threshold, using a marginal system since 2025–26 — see our HECS-HELP Repayment Calculator for a dedicated deep dive.
A tax offset directly reduces the tax you owe, dollar for dollar, unlike a deduction which reduces your taxable income before tax is calculated. LITO is the main offset most employees receive automatically; others include SAPTO for eligible seniors.
Yes — salary sacrificing into super, claiming all eligible work-related deductions, and ensuring you claim the tax-free threshold from only one employer are the main legitimate strategies. A registered tax agent can identify deductions you might otherwise miss.
Contractors operating as sole traders pay tax on business profit using the same individual resident brackets shown above, but without PAYG withholding — you're responsible for setting aside tax and often making quarterly PAYG instalments. See our Contractor vs Employee Calculator to compare take-home outcomes.
Overtime is taxed the same as any other income, at your marginal rate — there's no special "overtime tax rate." It's added to your total income for the pay period, which is why a large overtime payment in one pay can trigger higher-than-usual withholding that gets reconciled at tax time.
No. Employer Superannuation Guarantee contributions (12% from 1 July 2025) go directly to your super fund and aren't part of your taxable income. Salary sacrifice contributions do reduce your taxable income, since they come out of your pre-tax salary. Super itself is taxed separately, generally at 15% inside the fund.
An additional 1–1.5% charge on top of the standard Medicare levy, applying only to higher-income earners without private hospital cover. For 2026–27, it starts at $105,000 for singles. It's designed to encourage take-up of private health insurance and ease pressure on the public system.
Yes. All income from any source — freelancing, rideshare driving, selling online, or investment income — is assessable and must be declared. The ATO uses data-matching from banks, payment platforms and employers to detect unreported income, so it's important to declare everything.
The Low and Middle Income Tax Offset (LMITO), which provided up to an extra $1,500, ended after the 2021–22 financial year and was not extended. It doesn't apply from 2022–23 onward. Only LITO remains, worth up to $700 for incomes under $66,667.
You don't pay the same rate on all your income — you pay 0% on the first $18,200, then the relevant rate on each subsequent slice, up to your top bracket. Only income above each threshold is taxed at the higher rate, which is why your effective (average) rate is always lower than your marginal (top) rate.
Pay As You Go withholding is the amount your employer deducts from each pay and remits to the ATO on your behalf, as an estimate of your annual tax liability. At tax time the ATO calculates your actual liability — if too much was withheld, you get a refund; if too little, you pay the difference.
You can claim up to $300 in work-related expenses without receipts, provided you actually incurred the expense and it was work-related. The cents-per-kilometre vehicle method (up to 5,000km) also doesn't require receipts, though the ATO may still ask for a reasonable basis for your claimed kilometres.
For 2026–27, income tax on $75,000 is approximately $13,020, plus a $1,500 Medicare levy, for total deductions of $14,520 — take-home pay is roughly $60,480 per year, or about $5,040 per month, before super and assuming no HELP debt or MLS.
Yes, significantly. Foreign residents don't receive the $18,200 tax-free threshold or LITO, pay 30% from $0 to $135,000, and generally don't pay the Medicare levy. Working Holiday Makers face a distinct 15% flat rate on their first $45,000 while their employer is registered for that rate.
From 2025–26, the repayment system changed from a flat percentage of total income to a marginal system that only taxes income above the threshold — for most people this meaningfully lowered repayments. The minimum threshold also rose substantially, from $54,435 in 2024–25 to $67,000 in 2025–26 and $69,528 in 2026–27.
Use 2026–27 for your current pay and ongoing planning, since that's the financial year running now (1 July 2026 – 30 June 2027). Use 2025–26 if you're checking, finalising, or querying a tax return for the year that ended 30 June 2026.
It can, if you're above the MLS threshold — a basic hospital policy often costs less than the surcharge itself for singles well above $105,000. Below the threshold, the calculation is purely a personal cover decision, since the MLS wouldn't apply either way.
This calculator uses official ATO-published brackets, Medicare levy thresholds, LITO parameters and HELP repayment rules for both the 2026–27 and 2025–26 years, cross-checked against multiple independent worked examples. It provides a planning estimate — for your exact liability, lodge via ATO myTax or consult a registered tax agent.
Official Sources and References
All figures on this page are sourced directly from the Australian Taxation Office for the 2026–27 and 2025–26 financial years.
Check which financial year applies before acting on any figure. Rates, thresholds and HELP rules have changed in consecutive years — a number that was right last year may not be right now.
Model your MLS decision properly, not just by the headline rate. Compare the actual surcharge you'd pay against a real private hospital policy quote — for many singles above $105,000, the policy is genuinely the cheaper option.
If you're close to a LITO taper point, salary sacrifice can do double duty. Reducing taxable income from $46,000 to $45,000 doesn't just save tax at your marginal rate — it also increases the LITO you receive.
Don't assume HELP repayments work like they used to. If you've mentally budgeted using the old flat-percentage system, you may be over- or under-estimating what you'll actually repay under the current marginal rules.
Keep records year-round for deductions, not just at tax time. The $300 no-receipts threshold still requires you to have genuinely incurred the expense — a running note or app makes this defensible if queried.
Summary
Australian income tax is progressive, with five brackets from 0% to 45%, plus a 2% Medicare levy for most residents. The 2026–27 year brought a modest but meaningful tax cut via the second bracket dropping to 15%, while HELP/HECS repayments continue under the new marginal system introduced in 2025–26. Use the calculator above with your own figures — including salary sacrifice, deductions, private health cover and HELP debt — for a complete, accurate picture of your take-home pay.
✅ Ready to see your own numbers? Scroll back to the calculator at the top of this page, enter your salary, and get your exact take-home pay for 2026–27 or 2025–26 in seconds — free, with no sign-up required.