Skip to main content
AussieCalc

Income Tax Calculator

Estimate your Australian take-home pay, income tax, Medicare levy, and HECS repayment for FY2026–27.

When to use

When you receive a pay rise, change jobs, or want to understand exactly how much of your salary you actually take home.

Who it's for

Australian tax residents and foreign residents on a salary or wage, including those with HECS/HELP debt.

What you'll need

Your gross annual income. Optionally: work-related deductions, HECS debt status, and private health insurance.

FY2026–27 ATO tax rates and thresholds
$

Your gross salary before tax, Medicare, and any deductions.

Determines your tax brackets and Medicare levy eligibility.

How often you receive your pay. Affects how your per-period take-home is displayed.

Applies to Australian residents above the minimum income threshold.

Registered hospital cover removes the Medicare Levy Surcharge (MLS) above $93,000. It does not affect the standard Medicare Levy.

$

Annual amount sacrificed to super before tax. Reduces your taxable income and saves tax at your marginal rate minus 15%.

Estimates based on FY2026–27 Australian tax rates. Includes LITO. Employer SGC at 12%. Medicare Levy Surcharge applies above $93,000 without registered private hospital cover. Excludes private health rebates and other offsets. General guidance only — not tax advice.

You might also want to try

Salary Sacrifice Calculator

Redirect pre-tax salary into super to reduce taxable income and save on tax

HECS Repayment Calculator

See how your study debt repayment interacts with your income and tax withheld

Superannuation Calculator

See how pre-tax super contributions cut your tax and grow your retirement savings

Your tax bracket breakdown

How your $80,000 taxable income is allocated across each rate band.

Marginal rate: 30%
Tax-free (0%)

$0–$18,200

$18,200

Tax: $0

15%

$18,201–$45,000

$26,800

Tax: $4,020

30%Your bracket

$45,001–$135,000

$35,000

Tax: $10,500

37%

$135,001–$190,000

Not reached

45%

Above $190,000

Not reached

Your 30% marginal rate applies only to the income within the highlighted bracket, not your entire salary.

Salary comparison

How your tax and take-home change with a pay rise, additional income is taxed at your 30% marginal rate, not your whole salary.

SalaryTotal taxTake-home
$80,000Current$16,120$63,880
$85,000+$5,000$17,720$67,280
$90,000+$10,000$19,320$70,680

A pay rise never reduces your take-home pay. Each extra dollar is taxed only at the marginal rate for that income band, income tax and Medicare levy included above.

Where does your income go?

$80,000 salary breakdown — hover to see percentages

Take-home pay
$63,880
Income tax
$14,520
Medicare levy
$1,600

Effective tax rate: 20.2%. Marginal rate: 30%.

Income allocation across salary levels

How take-home pay, tax, and Medicare scale with income — hover to inspect

Take-home payIncome taxMedicare levyMedicare Levy Surcharge
Stacked area chart showing take-home pay, tax, and Medicare at different income levels
PeriodTake-home payIncome taxMedicare levyMedicare Levy SurchargeTotal
$0$0$0$0$0$0
$15k$15K$0$0$0$15K
$30k$29K$1K$400$0$30K
$45k$40K$4K$900$0$45K
$60k$50K$8K$1K$0$60K
$75k$60K$13K$2K$0$75K
$90k$71K$18K$2K$0$90K
$105k$80K$22K$2K$1K$105K
$120k$90K$27K$2K$2K$120K
$135k$100K$31K$3K$2K$135K
$150k$108K$37K$3K$2K$150K

The tax-free threshold ($18,200) and tax brackets ($45k, $135k, $190k) create visible kinks in the curves. LITO reduces tax for incomes below $67k. Without private hospital cover, the Medicare Levy Surcharge (MLS) adds 1–1.5% above $93,000.

Effective tax rate by income

How your effective rate climbs as income rises — hover to inspect

Effective tax rate
Line chart showing effective tax rate increasing with income
PeriodEffective tax rate
$00.0%
$15k0.0%
$30k4.9%
$45k10.2%
$60k16.0%
$75k19.4%
$90k21.5%
$105k24.0%
$120k25.4%
$135k26.2%
$150k27.9%

Your current effective rate is 20.2% at $80,000. This is always lower than your marginal rate of 30% because the lower tax brackets apply to the first portion of your income.

Australian income tax

How Australian income tax works

Australia uses a progressive tax system with a tax-free threshold of $18,200. You only pay tax on income above this amount, and each additional dollar is taxed at the rate for its bracket, not your entire income. In FY2026–27, the brackets are 0% (up to $18,200), 15% ($18,201–$45,000), 30% ($45,001–$135,000), 37% ($135,001–$190,000), and 45% above $190,000. The 15% rate on the first bracket (reduced from 16% in FY2025–26) reflects the further tax cut from the 2025–26 Federal Budget. The Low Income Tax Offset (LITO) reduces tax by up to $700 for incomes below $37,500, with a gradual phase-out up to $66,667.

Marginal rate vs effective tax rate

Your marginal tax rate is the rate you pay on the last dollar you earn. On a $90,000 salary, your marginal rate is 30%, but you don't pay 30% on all $90,000. You pay 0% on the first $18,200, 15% on the next $26,800, and 30% on the remaining $45,000. The income tax on $90,000 comes to around $17,520, an effective rate of approximately 19.5%, not 30%. Understanding this gap is key to making sense of your payslip. The effective rate is always lower than the marginal rate because only the top slice of income attracts the highest rate.

What is salary sacrifice?

Salary sacrifice lets you redirect pre-tax income into your superannuation fund. Because super contributions are taxed at just 15% (the concessional rate), rather than your marginal rate, you save the difference. If you're in the 30% bracket, each dollar sacrificed saves 15 cents in income tax (30% − 15%), plus you avoid 2% Medicare levy on the sacrificed amount. On $10,000 of sacrifice, that's roughly $1,700 in total tax saved, and the money still goes to work for you in super. The concessional contribution cap for FY2026–27 is $30,000 including employer super.

How HECS/HELP repayments work

Compulsory HECS/HELP repayments are calculated as a percentage of your total income, not just the amount above the threshold. Repayments start at 1% once income exceeds the minimum threshold and rise progressively to 10% at higher income levels. Unlike income tax, HECS repayments apply to your entire repayment income once you cross a threshold, not just the excess. Your employer withholds the estimated amount throughout the year and it is reconciled when you lodge your tax return. Check ato.gov.au for the current FY2026–27 thresholds.

What is the Medicare levy?

The Medicare levy is 2% of your taxable income and funds Australia's public health system. Most Australian residents pay the full 2%. A shade-in applies for low-income earners: no levy below $26,000, with a gradual increase between $26,000 and $32,500. If you have private hospital cover, you may be exempt from the Medicare Levy Surcharge (1%–1.5%), but the base 2% levy still applies. Foreign residents do not pay the Medicare levy.

Superannuation and take-home pay

Your employer is required to contribute 12% of your ordinary time earnings to super (the Superannuation Guarantee, or SGC). This is the final legislated SGC rate and applies from FY2025–26 onwards, including FY2026–27. It is paid on top of your salary and doesn't come out of your take-home pay. Additional voluntary contributions (salary sacrifice) do reduce cash take-home but reduce your tax and boost retirement savings simultaneously. Super contributions are taxed at 15% within the fund, making super one of the most tax-effective vehicles available to Australian employees.

FY2026–27 income tax brackets

Australia taxes income progressively, each bracket rate applies only to the income within that band, not to your whole salary. The 15% rate on the $18,201–$45,000 band is a further reduction from 16% in FY2025–26, announced in the 2025–26 Federal Budget.

Taxable incomeRate
$0 – $18,2000%
$18,201 – $45,00015%
$45,001 – $135,00030%
$135,001 – $190,00037%
Above $190,00045%

Plus 2% Medicare levy on taxable income. Low Income Tax Offset (LITO) of up to $700 applies below $66,667.

Worked examples

$70,000 salary — no HECS, no salary sacrifice
Income tax: 0% on $18,200, 15% on the next $26,800 ($4,020), 30% on the remaining $25,000 ($7,500) = $11,520. LITO phases out fully above $66,667, so no offset applies. Medicare levy: 2% × $70,000 = $1,400. Total tax: $12,920. Take-home: $57,080/year ($4,757/month). Effective tax rate: 18.5%.
$90,000 salary — with $30,000 HECS debt
Income tax: $4,020 + 30% × $45,000 = $17,520. Medicare levy: $1,800. HECS repayment: approximately 5.0% × $90,000 = $4,500 (check current ATO bands for exact FY2026–27 rate). Total deductions: $23,820. Take-home: $66,180/year ($5,515/month). Note that HECS repayments are separate to income tax and do not reduce your taxable income.
$130,000 salary — with $10,000 salary sacrifice to super
Sacrificing $10,000 reduces taxable income to $120,000. Tax on $120,000: $4,020 + 30% × $75,000 = $26,520. Medicare: $2,400. Total: $28,920. Without sacrifice, tax on $130,000: $4,020 + 30% × $85,000 + $2,600 Medicare = $32,120. Tax saving: $3,200. Your take-home drops by $6,800 (the $10,000 sacrifice minus the $3,200 tax saving), but $10,000 lands in super, a net improvement of $3,200.

Common mistakes

Thinking the 30% bracket means you pay 30% on all income
Australia's tax system is progressive. At $90,000, your marginal rate is 30%, but you pay 0% on the first $18,200, 15% on the next $26,800 ($4,020), and only 30% on income above $45,000. The effective rate on $90,000 is around 21.5% including Medicare, not 30%. Only the top slice attracts the highest rate.
Assuming HECS repayments reduce your taxable income
They don't. Compulsory HECS repayments are calculated on your repayment income and do not reduce the income tax you owe. This is fundamentally different from salary sacrifice contributions to super, which genuinely lower your taxable income. Confusing the two leads to underestimating your tax bill.
Thinking salary sacrifice reduces take-home pay by the full sacrificed amount
Because the sacrificed amount was going to be taxed at your marginal rate (plus Medicare levy), the actual reduction in take-home is less than the sacrificed amount. At 30% marginal rate plus 2% Medicare, sacrificing $10,000 reduces take-home by about $6,800, not $10,000. The gap is the tax you no longer pay.
Confusing the Medicare levy with the Medicare Levy Surcharge
The Medicare levy (2%) is paid by most Australian residents regardless of health insurance. The Medicare Levy Surcharge (1–1.5%) is an additional charge only for higher earners ($93,000+ single) who don't hold private hospital cover. They are separate. Having private hospital cover removes the surcharge but not the base 2% levy.

Frequently asked questions

What tax bracket am I in as an Australian resident in FY2026–27?
Australia has five tax brackets in FY2026–27: 0% on the first $18,200; 15% on $18,201–$45,000; 30% on $45,001–$135,000; 37% on $135,001–$190,000; and 45% above $190,000. The 15% rate on the lowest taxed bracket is a further reduction from 16% in FY2025–26, following the Stage 3 cuts from 1 July 2024. Most Australians earning $45,001–$135,000 are in the 30% bracket. The tax-free threshold and Low Income Tax Offset (LITO) further reduce tax for lower earners.
Does salary sacrifice actually save me money?
Yes, if you're in the 30% tax bracket or above. Every dollar sacrificed to super is taxed at 15% (concessional rate) instead of your marginal rate. At 30%, sacrificing $10,000 saves $1,500 in income tax and $200 in Medicare levy. The money still works for you in super. The trade-off is reduced cash take-home and reduced access to the funds until retirement (preservation age, typically 60). Ensure you stay within the $30,000 concessional cap for FY2026–27 (including your employer's 12% SGC contributions).
How much HECS do I pay if I earn $70,000?
At $70,000 taxable income, the HECS repayment rate is approximately 2.5% applied to your entire income, not just the amount above the threshold. This means a compulsory repayment of approximately $1,750 per year ($70,000 × 2.5%), or around $146/month. Your employer withholds this amount and it is credited when you lodge your tax return. Check ato.gov.au for current FY2026–27 thresholds. Note that HECS repayments do not reduce your taxable income.
Is the Medicare levy the same as Medicare Levy Surcharge?
No. The Medicare levy (2% of income) is paid by most Australian residents and funds the public health system. The Medicare Levy Surcharge (MLS) is an additional 1%–1.5% tax that applies only to higher-income earners ($93,000+ for singles, $186,000+ for families) who don't hold private hospital cover. The MLS is designed to encourage private health insurance uptake. This calculator models both, you can toggle 'Private hospital cover' to see whether MLS applies to your income.
Why is my effective tax rate lower than my marginal rate?
Because Australia's progressive tax system only applies each rate to the income within that bracket, not to your entire income. If you earn $80,000, you pay 0% on the first $18,200, 15% on the next $26,800 ($4,020), and 30% on the remaining $35,000 ($10,500). The income tax totals $14,520, an effective rate of about 18.2%, not 30%. Including the 2% Medicare levy, the combined effective rate is roughly 20.2%. The effective rate is what you actually pay as a proportion of total income, and it's always lower than the marginal rate.
Does my HECS debt reduce my taxable income?
No. HECS/HELP compulsory repayments are not tax-deductible and don't reduce your taxable income. They are calculated separately on your repayment income (broadly equal to taxable income) and reconciled at tax time. Voluntary HECS repayments are also not tax-deductible. This differs from salary sacrifice super contributions, which do reduce your taxable income because they are made before tax.
What is the tax-free threshold and how do I claim it?
The tax-free threshold is $18,200, meaning you pay no income tax on your first $18,200 of income. To claim it, tick 'Yes' to the tax-free threshold question on your Tax File Number (TFN) declaration when you start a job. If you have more than one employer, you can only claim the threshold at one of them, typically the one paying you the most. Claiming it at two employers simultaneously leads to insufficient withholding throughout the year and a tax bill at return time. The Low Income Tax Offset (LITO) provides additional relief on top of the threshold, reducing tax by up to $700 for incomes below $37,500, with a gradual phase-out to zero at $66,667.
What work-related expenses can I claim as a tax deduction in Australia?
You can claim a deduction for work-related expenses you incurred and were not reimbursed for, that directly relate to earning your employment income, and for which you have records. Common deductions include: tools and equipment specific to your job; work-appropriate uniforms or protective clothing (not conventional clothing); self-education directly related to your current role; work-related travel excluding the home-to-work commute; home office expenses using the ATO's fixed rate or actual costs method; union and professional membership fees; and the work-use portion of your mobile phone or internet costs. If your total claim is $300 or less, you can claim without individual receipts. Above $300, you need written substantiation. The ATO's myDeductions app can help you capture receipts during the year.
What is the Low Income Tax Offset (LITO)?
The Low Income Tax Offset (LITO) is a tax offset that reduces the income tax payable for lower earners. The maximum LITO is $700 and applies to taxable incomes of $37,500 or less. It phases out at a rate of 5 cents per dollar between $37,501 and $45,000, then at 1.5 cents per dollar between $45,001 and $66,667, reducing to zero above $66,667. LITO is applied after tax is calculated and effectively increases the point at which you start paying tax. Combined with the $18,200 tax-free threshold, LITO means most Australians earning under approximately $22,575 pay no income tax at all. Unlike some other offsets, LITO is not refundable, it can reduce your tax to zero but not below.
Do I need to lodge a tax return in Australia?
You generally need to lodge a tax return if you earned any income during the financial year (1 July to 30 June), had tax withheld by an employer, have a HECS/HELP debt, or have investment income. You may not need to lodge if your only income was below the tax-free threshold ($18,200) and you had no tax withheld. The ATO's do-I-need-to-lodge tool can confirm your position. Most Australians lodge via myTax (online through myGov), which is pre-filled with information from employers and banks. The due date for self-lodgers is 31 October; using a registered tax agent extends this. Failing to lodge when required can attract penalties.

How this calculator works

Enter your gross salary. The calculator applies the FY2026–27 progressive tax brackets, the Low Income Tax Offset (LITO), and the 2% Medicare levy to work out your income tax and net take-home pay. If you have HECS/HELP debt, the relevant compulsory repayment rate is also applied to your income. If you salary sacrifice into super, the sacrificed amount is deducted from your taxable income before tax is calculated, which is how you see the real tax saving.

Australian income tax is progressive: you pay 0% on the first $18,200, then increasing rates on each band above that. A common misunderstanding is that moving into a higher bracket means all your income is taxed at the new rate. It does not, only the income above the new threshold is taxed at the higher rate. The result shows both your effective rate (total tax as a percentage of gross income) and your marginal rate (the rate on each additional dollar).

The marginal rate is the one that matters for decisions, salary sacrifice, timing of a capital gain, whether to claim a deduction. The effective rate is what you actually pay across your whole income. The calculator covers salary or wages only; investment income, rental income, and deductions are not modelled.

Methodology

  • Assumptions: FY2026–27 tax rates; Australian resident taxpayer; salary or wages income only; Low Income Tax Offset (LITO) applied; employer SGC (12%) not included in taxable income.
  • Calculation: Income tax = progressive bracket formula; Medicare levy = 2% of taxable income (low-income shade-in applies below $32,500); Medicare Levy Surcharge applied at 1–1.5% for singles above $93,000 without private hospital cover; HECS repayment = flat threshold rate applied to total repayment income; salary sacrifice reduces taxable income before tax is applied.
  • Limitations: Does not model investment income, rental income, capital gains, deductions, or the Low and Middle Income Tax Offset (expired FY2021–22).

Sources

Last updated: July 2026

Related guides

What to do next