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See the real take-home impact of a salary increase — after income tax, Medicare levy, HECS-HELP and super — plus whether it keeps up with inflation.
Updated: 6 August 2026 · Reviewed by Mohsin Iqbal · 15 min read
Salary Details
Financial year
Current gross salary
$
Pay rise (%)
%
— or fixed $ increase instead
$
If you enter a fixed $ amount, it's used instead of the percentage above.
CPI / inflation rate
%
Default is the latest ABS annual CPI figure (June 2026 quarter) — update as new data is released.
HECS/HELP debt?
Pay Rise Impact
Extra Take-Home (annual)
—
Item
Before
After
Change
Estimates only — not financial or tax advice. Confirm your exact position via ATO myTax or a registered tax agent.
⏱️ Last reviewed: 6 August 2026 · Written and reviewed by Mohsin Iqbal under our editorial policy and calculation methodology. Tax rules and CPI figures change — always confirm your position with the ATO or a registered tax agent.
📖 Approx. 15 min read💰 2026–27 & 2025–26 ATO rates🔄 Updated 6 August 2026
You typically keep around 68% of a pay rise if it stays within the 30% tax bracket (30% tax + 2% Medicare levy) — not the full gross amount.
A large pay rise can genuinely push part of your income into a higher tax bracket — only the portion above the new threshold is taxed at the higher rate, not your whole income.
Superannuation Guarantee (12%) scales automatically with your salary — a bigger salary means bigger super contributions too.
If you have a HECS-HELP debt, a pay rise can increase your compulsory repayment — this calculator now models that directly.
With Australian CPI at 3.8% (year to June 2026), a pay rise below this is effectively a real wage cut, even though your dollar figure went up.
Quick Answer
A pay rise doesn't translate dollar-for-dollar into extra take-home pay — tax, the Medicare levy, and any HECS-HELP repayment all take a share. On a $85,000 salary with a 10% pay rise ($8,500 gross increase) in 2026–27, you'd keep about $5,780 of it after tax — roughly 68%. Whether that's actually a "good" rise also depends on inflation: with CPI running at 3.8% (June 2026 quarter), your rise needs to beat that just to maintain your purchasing power. Use the calculator above with your own numbers, including HECS status, for an exact result.
What Is a Pay Rise?
A pay rise (or pay raise) is an increase to your salary or wage, whether from an annual performance review, a promotion, an award or enterprise agreement wage adjustment, or a market-rate correction. It can be expressed as a percentage increase or a fixed dollar amount, and its real value to you depends heavily on tax, super and inflation — not just the headline number.
How to Calculate a Pay Rise
New salary = Old salary × (1 + percentage increase)
Gross increase = New salary − Old salary
Net increase = (New salary − tax on new salary) − (Old salary − tax on old salary)
Real (inflation-adjusted) rise % = Percentage increase − CPI rate
The gross percentage increase is just the starting point — what actually matters for your budget is the net (after-tax) increase, and whether that keeps pace with inflation.
Pay Rise and Income Tax — Does It Push You Into a Higher Bracket?
Australia's progressive tax system means a pay rise is taxed at your marginal rate — the rate on your next dollar earned — not retroactively applied to your whole income. If your rise pushes part of your income into a new bracket, only that portion above the threshold is taxed at the higher rate; the rest of your income keeps its previous tax treatment. A $130,000 salary with a 5% rise reaches $136,500 in 2026–27 — crossing the $135,000 threshold into the 37% bracket for that small portion, while the bulk of the income remains taxed at 30%. The calculator above flags this automatically when it applies to your numbers.
Pay Rise and Superannuation
Superannuation Guarantee contributions are 12% of your ordinary time earnings, so they scale automatically with any pay rise — no separate action needed. A $10,000 pay rise means an extra $1,200 a year going into your super fund, on top of the take-home pay increase. See our Super Contributions Calculator if you're considering additional voluntary contributions alongside a new, higher salary.
Pay Rise and HECS-HELP Repayments
If you have a HECS-HELP debt, a pay rise can increase your compulsory repayment, since repayments are calculated on your repayment income using a marginal system. On an $85,000 salary with a $10,000 pay rise (2026–27), someone with a HELP debt would see about $1,500 more go to compulsory repayments compared to someone without one — meaning less of the raise reaches their bank account, though it also means the debt clears faster. Toggle "HECS/HELP debt?" in the calculator above to see this modelled against your own numbers, or see our HECS-HELP Calculator for a dedicated repayment and payoff projection.
Real Pay Rise vs Inflation
A "nominal" pay rise is just the percentage or dollar figure on paper. A "real" pay rise accounts for inflation — if prices are rising faster than your pay, your purchasing power actually falls even though your salary went up. With Australian CPI at 3.8% for the year to June 2026, a 3% pay rise is a real wage cut of about 0.8%, while a 5% pay rise is a genuine real increase of about 1.2%. CPI moves quarterly, so update the default figure in the calculator above with the latest ABS release for the most accurate comparison.
Scenario
Real Result (at 3.8% CPI)
3% rise
Real wage cut (−0.8%)
5% rise
Slight real increase (+1.2%)
10% rise
Strong real increase (+6.2%)
Is Your Pay Rise Good? Benchmarking Context
Whether a pay rise is "good" depends on context — your industry, the broader labour market, and inflation all matter. As a rough guide: a rise below CPI is a real pay cut regardless of how large the number looks; a rise roughly matching CPI maintains your purchasing power; and a rise meaningfully above CPI represents genuine wage growth. Skilled-role and tight-labour-market positions can often secure rises well above CPI, while award and enterprise agreement increases tend to track closer to it. Check the ABS Wage Price Index and industry-specific salary guides for a sense of what's typical in your field before negotiating.
Worked Examples (2026–27)
Current Salary
Pay Rise
New Salary
Gross Increase
Net Increase
$60,000
5%
$63,000
$3,000
$1,995
$80,000
8%
$86,400
$6,400
$4,352
$100,000
10%
$110,000
$10,000
$6,800
$130,000
5%
$136,500
$6,500
$4,315
ℹ️ These net-increase figures are the same for 2025–26 too, for anyone whose salary stays within the same bracket both before and after the rise — the 1-percentage-point bracket change between the two years only affects a fixed lower-income band, which cancels out symmetrically when comparing before and after. What differs between years is your total take-home pay, not the incremental value of the raise itself.
✅ Negotiation Checklist
Research market salaries for your role and experience level
Document your achievements and impact since your last review
Review the latest CPI and wage growth data
Compare salaries across similar roles in your industry
Choose the right timing (performance review, after a major win, or increased responsibility)
Negotiating a Pay Rise in Australia
Research market rates. Use SEEK Salary Insights, ABS Average Weekly Earnings, or role-specific salary surveys to know what's realistic.
Time it strategically. Annual performance reviews, after major project completions, or when taking on extra responsibilities are natural moments.
Consider the total package. Super, flexible work, training and extra leave all carry real dollar value alongside base salary.
Use CPI as your floor, not your target. With inflation at 3.8%, treat that as the minimum needed just to stand still, not as a strong outcome.
Common Mistakes
Assuming the full gross increase reaches your bank account. Tax, Medicare levy and HECS (if applicable) all take a share — typically keeping around 68-85% depending on your bracket.
Not checking for a bracket push. A large rise can move part of your income into a higher bracket — worth knowing even though it only applies to the portion above the threshold.
Comparing a pay rise to last year's inflation figure. CPI moves quarterly — always check the latest ABS release rather than relying on an old headline number.
Forgetting HECS debt increases repayments too. A pay rise that looks generous on paper can be reduced further by a bigger compulsory repayment.
Ignoring superannuation in the comparison. A pay rise increases your super contributions too — a real, if delayed, part of its total value.
Frequently Asked Questions
Multiply your current salary by (1 + the percentage increase), or add a fixed dollar amount. To find the after-tax value, subtract your old net take-home pay from your new net take-home pay — use the calculator above for an exact figure.
On a $80,000 salary, a 3% pay rise is $2,400 gross, or about $1,632 after tax at a 32% combined marginal rate. Enter your own salary into the calculator above for an exact figure.
On a $60,000 salary, a 5% pay rise is $3,000 gross, about $1,995 after tax (2026–27). The exact after-tax value depends on your marginal tax rate — use the calculator above for your own figure.
On a $100,000 salary, a 10% increase is $10,000 gross, about $6,800 after tax (2026–27) — you keep roughly 68% at this income level. Use the calculator above for your specific salary.
As a percentage of your current salary (new salary = old salary × (1 + %)) or as a fixed dollar amount added to your current salary. Both approaches are supported in the calculator above.
Yes — a higher salary means more income tax in dollar terms, taxed at your marginal rate. It can also push part of your income into a higher bracket if the rise is large enough relative to your starting point.
Yes — Superannuation Guarantee is 12% of your ordinary time earnings, so it automatically scales with any salary increase without any separate action needed.
Yes, if your income is above the compulsory repayment threshold — a higher salary generally means a higher compulsory HECS-HELP repayment, calculated using the current marginal repayment system.
It depends on your industry, role, performance and the labour market — research market rates via salary surveys and benchmark against CPI (currently 3.8%) as a minimum floor to maintain purchasing power, not as your target outcome.
With CPI at 3.8% (June 2026 quarter), a 5% pay rise is ahead of inflation — a genuine real increase of about 1.2%. Whether it's "good" beyond that depends on your industry and role — some skilled positions in tight labour markets achieve considerably more.
At current CPI of 3.8%, a 3% pay rise is actually a real wage cut of about 0.8% — you're slightly worse off in purchasing-power terms even though your dollar figure increased.
If your pay rise is below the current CPI rate, your purchasing power falls even though your dollar salary increased — this is called a real wage cut. Compare your rise percentage against the latest ABS CPI figure to see your true position.
Typically 65-85% of the gross increase, depending on your marginal tax rate and whether you have a HECS debt — never the full 100%. Use the calculator above for your exact figure.
It can, if your new salary crosses one of the bracket thresholds ($45,000, $135,000 or $190,000). Only the portion of income above the new threshold is taxed at the higher rate — the calculator above flags this automatically.
A nominal pay rise is the raw percentage or dollar figure. A real pay rise subtracts inflation (CPI) from that figure, showing your actual change in purchasing power — a 3% nominal rise with 3.8% CPI is a -0.8% real rise.
This varies significantly by year, industry and role — check the ABS Wage Price Index for the latest official wage growth figures, and industry-specific salary guides for role-specific benchmarks.
Yes — enter your current salary and either a percentage or fixed dollar increase into the calculator above for your new gross salary, plus the full after-tax breakdown.
It depends on your new taxable income and marginal rate — use the calculator above to see your total tax, Medicare levy and (if applicable) HECS repayment before and after the rise, side by side.
Your new gross salary minus income tax, Medicare levy and any HECS repayment. Use the calculator above for the exact before-and-after comparison, including monthly and annual figures.
It depends on your starting salary — a 7% rise on $90,000 is $6,300 gross. Enter your own salary and 7% into the calculator above for the exact after-tax figure.
Not automatically — a fixed dollar salary sacrifice arrangement stays the same unless you actively change it, while a percentage-based arrangement scales with your new, higher salary.
No — a pay rise permanently increases your base salary going forward, while a bonus is typically a one-off payment. Both are taxed at your marginal rate, but only a pay rise compounds into future years and affects ongoing super contributions.
Either can work — a percentage increase scales naturally with your existing salary, while a fixed dollar amount is easier to compare directly against inflation or cost-of-living needs. The calculator above supports both.
Annually is common, often aligned with a performance review cycle, though timing after a major achievement or increased responsibility can also be effective — there's no fixed rule, and it varies by workplace and industry norms.
This calculator uses official ATO-published brackets, LITO, Medicare levy and HELP repayment rules for both the 2026–27 and 2025–26 years, individually verified against tested worked examples. CPI defaults to the latest published ABS figure. It's a planning estimate — for your exact position, consult a registered tax agent.
A pay rise looks bigger on paper than it feels in your bank account — tax, Medicare levy and any HECS repayment all take a share, typically leaving you with 65-85% of the gross increase depending on your bracket. Super scales automatically with your new salary, and a large enough rise can genuinely shift part of your income into a higher tax bracket. Measured against inflation (currently 3.8%), the real test of a good pay rise is whether it beats the cost of living, not just whether the number went up. Use the calculator above with your own figures for an exact, year-specific answer.