Australia income tax calculator

The first $18,200 is taxed at nothing

Australia's tax-free threshold is among the highest in the developed world, and it is unconditional: no claim, no means test, no paperwork beyond ticking a box with your employer.

It shapes the whole effective-rate curve. On $45,000 the income tax is $4,020 — an effective 8.9% — because more than a third of that salary sits in the exempt band. The published marginal rate at that income is 30%, and the gap between those two figures is the largest in the system.

The trap is claiming it twice. The threshold is claimed from one employer, and someone with two jobs who ticks the box on both has $18,200 exempted twice over. The shortfall arrives as a tax debt at the end of the income year, and it is the single most common reason an Australian gets an unexpected bill.

The rule is to claim it from the higher-paying job and let the second one withhold without it. That over-withholds slightly, which comes back as a refund — the right direction to be wrong in.

The income year runs 1 July to 30 June, so a pay rise in March falls in the year that ends that June, not in the calendar year.

The ATO's own rate table is 2% short, on purpose

The rates the ATO publishes explicitly exclude the Medicare levy. The page says so in a line under the table, and almost every calculator that scrapes it misses the line.

The levy is 2% of taxable income, charged on top. On $90,000 that is $1,800 — money that appears nowhere in the official scale and is not optional.

It also changes the marginal rate that actually matters. Someone in the 30% band pays 32.0% on the next dollar once the levy is counted, not 30%. Every published Australian marginal rate is two points below the real one for anyone paying the full levy.

There is a reduction and an exemption at low incomes, which this calculator does not model — so near the threshold the figure here is an upper bound rather than the exact charge. That is stated under the result rather than left for you to discover.

And there is a separate Medicare levy surcharge for higher earners without private hospital cover, which is a different charge with different thresholds and is not included here at all.

No state income tax, which is the opposite of the US

Australian states do not tax income. There is one scale for the whole country, and moving from Sydney to Perth changes nothing about what you pay on a salary.

That is a genuinely different architecture from the United States, where fifty-one jurisdictions set their own rates and eleven states let cities add more on top. It is why the US side of this site has thousands of pages and this one has a single scale.

The states fund themselves elsewhere: payroll tax charged to employers rather than employees, stamp duty on property transfers, and land tax on holdings above a threshold. None of those comes out of a payslip, which is why the take-home figure above is complete in a way a US one never is.

The practical consequence for anyone comparing offers across Australian cities is that the tax line is identical and the entire difference is cost of living. That is a much simpler comparison than the American equivalent, and it is worth knowing that the simplicity is real rather than an omission.

Where the states do reach a household is on property, through stamp duty at purchase and land tax on investment holdings — both quite different from the annual property tax this site models county by county in the US.

Superannuation and study loans, which behave nothing alike

Superannuation is paid by your employer on top of your salary, at a legislated percentage. It does not come out of the figure you were quoted and does not reduce your take-home pay — which is why the calculator above does not deduct it.

Salary sacrifice is the exception. Contributing extra from pre-tax salary does reduce your taxable income, and because it is taxed at a concessional rate inside the fund rather than at your marginal rate, it is the largest ordinary lever most Australians have. It is not modelled here.

Study and training loan repayments are the opposite: they come straight out and they behave like a second tax. Repayment is compulsory once income passes a threshold, it is calculated as a percentage of income rather than of the loan, and it rises in steps.

For a graduate earning $90,000 that repayment can be several thousand dollars a year, deducted through the pay cycle alongside tax. A take-home figure that ignores it — including the one above — will be materially higher than what actually lands.

The reason it is excluded rather than estimated is that the thresholds and rates change annually and depend on which loan scheme applies. A wrong figure would be worse than a stated omission.

Four ways an Australian estimate goes wrong

Using the ATO table without adding Medicare. The table excludes the 2% levy and says so. On $90,000 that is $1,800 missing.

Claiming the tax-free threshold from two employers. $18,200 exempted twice produces a debt at the end of the income year. Claim it from the higher-paying job only.

Deducting superannuation from the salary. Employer contributions are paid on top, not out of it. Only salary-sacrificed amounts reduce your pay, and they reduce your tax as well.

Forgetting the income year. It runs 1 July to 30 June. A figure labelled with a calendar year is either wrong or describing a different country's system, and rates changed at the start of 2026–27.

Where these figures come from

The scale was read off ATO — Tax rates: Australian resident (resident tax rates 2026–27) on 2026-09-02, and the engine is checked against the ATO's own worked amounts rather than only against the percentages: $4,020 of tax at $45,000, $31,020 at $135,000 and $51,370 at $190,000 — the figures the ATO publishes in its own table, reproduced exactly.

That check is worth more than reproducing the rates, because it catches the errors percentages alone hide: an off-by-one threshold or a band applied to the wrong slice still produces plausible percentages and the wrong money.

The figures are for 2026–27. The Australian income year runs 1 July to 30 June, not January to December. Rates changed at the start of this year, so a page describing the previous one is a different scale rather than a slightly different one.

What is not modelled is stated under the calculator: The Medicare levy reduction and exemption for low incomes are not modelled. The 2% is applied in full, so for someone near the low-income threshold the figure here is an upper bound rather than the exact charge. The Medicare levy surcharge, which applies to higher earners without private hospital cover, is not included.

The arithmetic is deterministic — rates in, result out. The AI on this site explains figures it is given and never produces one.

Offsets, which reduce tax rather than income

Australia leans on tax offsets where other systems use deductions, and the difference matters: an offset reduces the tax itself, so it is worth its full face value rather than your marginal rate on it.

The low income tax offset is the one most people meet. It reduces tax for lower earners and phases out as income rises, which means the effective marginal rate through the phase-out range is higher than the published band — the same mechanism as a US credit taper or the UK allowance withdrawal.

That phase-out is why the real marginal rate at modest incomes is not simply the band rate plus the levy. On $45,000 the published band is 30% and the effective picture is different once the offset taper is counted. This calculator does not model offsets, so the figure at lower incomes is an upper bound.

Most offsets are non-refundable: they reduce tax to zero and stop. They cannot produce a refund of tax you never paid, which is the opposite of how the refundable credits work in the US system covered elsewhere on this site.

The private health insurance rebate is a different kind again, delivered either as a reduced premium or as an offset at filing, and it interacts with the Medicare levy surcharge rather than with the income tax scale.

What Australians can actually deduct

Work-related deductions are more generous and more used in Australia than in most comparable systems, and they come off income before the scale applies.

The categories that matter: vehicle and travel expenses for work that is not ordinary commuting, tools and equipment, professional subscriptions and union fees, self-education directly connected to your current work, and home office costs.

Home office has a fixed-rate method requiring a record of hours worked from home, and an actual-cost method requiring receipts and an apportionment. The fixed rate is simpler and usually smaller; which wins depends on how much of your home is genuinely dedicated to work.

The rule that decides everything is connection to earning your income. A deduction must be incurred in gaining assessable income, not merely useful — which is why commuting fails and travel between two work sites succeeds.

None of these are modelled above. The figure is computed on the taxable income you enter, so deductions should be subtracted before entering it rather than expected to appear in the result.

How Australia compares with the other systems here

Against the United States, the difference is architectural. Australia has one national scale and no state income tax; the US has fifty-one jurisdictions plus local income tax in eleven states. A US take-home figure is incomplete without a state; an Australian one is complete without anything further.

Against the United Kingdom, the difference is in the shape of the curve. The UK marginal rate rises, spikes to 62% in the allowance withdrawal band and then falls; the Australian curve rises monotonically to 45% plus the levy, with the offset taper as the only complication. It is a more predictable system to plan against.

Against India, the difference is choice. India runs two regimes and you pick one annually; Australia runs one, and the planning happens in deductions and salary sacrifice rather than in electing a code.

What Australia shares with all three is a large exempt band at the bottom — $18,200 here — and a structure where the published marginal rate is not what the next dollar costs. That last point is the single most transferable lesson across every country on this site.

The property side is where comparison breaks down entirely. The US charges an annual tax on a home's value, county by county, which this site models for all 3,143 of them. Australian states charge stamp duty at purchase and land tax on investment holdings, which are different taxes on a different base.

The income year, and why timing matters

The Australian income year runs 1 July to 30 June. A pay rise in March belongs to the year ending that June, and a bonus paid on 2 July belongs to the year that has just begun.

Tax returns are due by 31 October for anyone lodging their own, later through a registered tax agent provided you are on their books before the deadline. That extension is real and widely used, and it is lost if you engage the agent after 31 October.

Pay as you go withholding handles the deduction through the year, based on what your employer knows. It is an estimate, and the return reconciles it — which is why most Australians receive a modest refund rather than owing.

Deductions are claimed for the year in which the expense was incurred, which makes late June a genuinely consequential moment: a work-related purchase on 29 June is deductible this year and one on 2 July is deductible next year.

And the rates themselves changed at the start of 2026–27. Figures for the previous year describe a different scale, not a slightly adjusted one, so anything without a year label on it should be treated as unusable.

Lodging a return, and why most Australians get a refund

Most Australians receive money back rather than owing it, and the reason is structural rather than generous: pay as you go withholding is deliberately set to over-collect slightly, and deductions are claimed after the fact rather than through the year.

The return is lodged through myTax, and it arrives substantially pre-filled — salary and withholding from your employer, bank interest, dividends and private health insurance details are reported to the ATO directly. Waiting until late July for the pre-fill to complete avoids the commonest cause of an amendment.

The deadline is 31 October for self-lodgers. A registered tax agent can lodge later, but only if you are on their client list before 31 October — engaging one in November does not buy the extension.

Work-related deductions are where the refund comes from, and they need records. The rule is that you keep evidence for five years from lodgement, and the ATO's own app exists largely to make that record-keeping survivable.

If you do end up owing, it is usually one of two things: claiming the tax-free threshold from two employers, or income nobody withheld against. Both are fixable for the following year — the first by changing which employer you claim it from, the second by asking for additional withholding.

The same scale at four incomes

The effective rate climbs slowly at first because the exempt band is large, then accelerates. Seeing four incomes at once makes the shape obvious in a way a rate table does not.

On $45,000: $4,020 of income tax and $900 of Medicare levy, $4,920 in total. Effective rate 10.9%, real marginal rate 17.0% — a gap of 6.1 points.

On $90,000: $17,520 of income tax and $1,800 of Medicare levy, $19,320 in total. Effective rate 21.5%, real marginal rate 32.0% — a gap of 10.5 points.

On $150,000: $36,570 of income tax and $3,000 of Medicare levy, $39,570 in total. Effective rate 26.4%, real marginal rate 39.0% — a gap of 12.6 points.

On $250,000: $78,370 of income tax and $5,000 of Medicare levy, $83,370 in total. Effective rate 33.3%, real marginal rate 47.0% — a gap of 13.7 points.

Notice the gap widens as income rises. At lower incomes most of the salary sits in the exempt and 15% bands, so the average stays far below the top rate reached — which is why quoting a marginal rate as "the tax you pay" overstates it at every income, and overstates it most at the top.

Questions

How much tax do I pay on $90,000 in Australia?

$17,520 of income tax plus $1,800 of Medicare levy — $19,320 in total, leaving $70,680, or $5,890 a month. That is an effective rate of 21.5%, against a real marginal rate of 32.0%.

What is the tax-free threshold?

$18,200, and it is unconditional. Claim it from one employer only — claiming it from two exempts the amount twice and produces a tax debt at the end of the income year, which is the commonest reason Australians get an unexpected bill.

Is the Medicare levy included in the ATO rates?

No, and the ATO says so under its own table. The published rates exclude the 2% levy, which is charged on top of taxable income. Any calculator built from that table without adding it is short by 2% of your income.

Do Australian states charge income tax?

No. There is one scale for the whole country, so moving between states changes nothing about tax on a salary. States raise revenue through payroll tax charged to employers, stamp duty and land tax instead — none of which comes out of a payslip.

Does superannuation reduce my take-home pay?

Employer contributions do not — they are paid on top of your salary. Salary-sacrificed contributions do reduce your pay, and they also reduce your taxable income, which is what makes them efficient. Neither is modelled in the figure above.

What about my HELP or HECS debt?

It is not included here, and for a graduate it is substantial. Repayment is compulsory above an income threshold, calculated as a percentage of income rather than of the loan, and deducted through the pay cycle — so your actual take-home will be lower than the figure above.