Australian Salary Calculator 2025–26

How Australian Income Tax Works

Australia uses a progressive income tax system, which means that different portions of your income are taxed at different rates. You only pay the higher rates on the income that falls within each bracket — not on your entire salary.

For the 2025–26 financial year (which runs from 1 July 2025 to 30 June 2026), the income tax brackets for Australian residents are:

• $0 – $18,200: 0% (tax-free threshold)
• $18,201 – $45,000: 19%
• $45,001 – $135,000: 32.5%
• $135,001 – $190,000: 37%
• Above $190,000: 45%

Your taxable income is your gross earnings minus any allowable deductions and salary sacrifice contributions. Tax offsets (like the Low Income Tax Offset) then reduce the amount of tax you owe.

The Stage 3 Tax Cuts Explained

From 1 July 2024, the federal government's Stage 3 tax cuts restructured the income tax brackets. The key changes were:

• The 32.5% bracket was extended from $120,000 to $135,000
• The old 37% bracket ($120,001–$180,000) was eliminated and replaced with a narrower band from $135,001–$190,000
• The 19% rate and tax-free threshold ($18,200) remained unchanged

These cuts benefit most taxpayers earning between $45,000 and $190,000. An individual earning $1$100,000 saves approximately $2,179 in tax compared to 2023–24.

Medicare Levy and Medicare Levy Surcharge

Medicare Levy

The Medicare Levy is an additional 2% tax on your taxable income, collected alongside income tax to fund Australia's public health insurance scheme (Medicare). Most Australian residents pay it automatically.

If your income is below the low-income threshold ($27,222 for singles in 2025–26), you pay no Medicare Levy. Between $27,222 and $34,028, a reduced levy applies (the "shade-in" range), where you pay 10% of the excess above $27,222. Above $32,500, the full 2% applies to all income.

Medicare Levy Surcharge (MLS)

If you earn above $93,000 (2025–26 singles threshold) and don't hold an eligible private hospital insurance policy, you pay the Medicare Levy Surcharge on top of the Medicare Levy:

• 1% on income $93,001 – $108,000
• 1.25% on income $108,001 – $144,000
• 1.5% on income above $144,000

The MLS is calculated on your taxable income plus any reportable fringe benefits. Taking out private hospital cover (even a basic policy) eliminates the MLS entirely, and is often cheaper than paying the surcharge.

Superannuation: How It Works

Employer Super Guarantee

Your employer must contribute a minimum Super Guarantee (SG) to your super fund. The rate for 2025–26 is 12% of your ordinary time earnings. Critically, this is paid on top of your salary — it is not deducted from your take-home pay. The employer's total cost of employing you is your salary plus the SG.

Salary Sacrifice to Super

You can ask your employer to redirect part of your pre-tax salary into super via salary sacrifice. This reduces your taxable income (saving income tax at your marginal rate) and the contributed amount is taxed at only 15% in the fund (the contributions tax). Salary sacrifice counts toward the concessional contributions cap — $30,000 in 2025–26 — which includes your employer's SG contributions.

Voluntary Employee Contributions

You can also make voluntary after-tax contributions from your net pay. These are not concessionally taxed but may qualify for the government super co-contribution if your income is below $58,445.

HECS-HELP: How Student Loan Repayments Work

If you studied at university and deferred your fees using HECS-HELP, you repay your debt gradually through the tax system once your repayment income exceeds the minimum threshold. For 2025–26 that threshold is $56,395.

Your repayment income is not simply your salary — it includes your taxable income plus any reportable fringe benefits and reportable employer super contributions (such as salary sacrifice to super). This means people who salary sacrifice may have a higher HECS repayment than they expect.

The repayment rate scales from 1% at the minimum threshold to 10% for incomes above $189,448. The repayment reduces your take-home pay but gradually eliminates your HECS debt over time. There is no interest on HECS-HELP debts (they are indexed to CPI instead).

Tax Offsets: LITO, LMITO, and SAPTO

Low Income Tax Offset (LITO)

The LITO is an automatic offset that reduces the income tax payable for low and middle income earners. For 2025–26, the maximum is $700 for incomes up to $37,500. It tapers out at 5 cents per dollar between $37,500–$45,000, then at 1.5 cents per dollar to $66,667, where it reaches zero.

Low and Middle Income Tax Offset (LMITO)

The LMITO was a temporary additional offset worth up to $1,500 (boosted for 2021–22 and 2022–23). It was abolished from 1 July 2023 and no longer applies for 2023–24 or later years. This calculator applies it automatically for the 2022–23 financial year.

Senior and Pensioners Tax Offset (SAPTO)

SAPTO is available to people who have reached qualifying age (currently 67 for most purposes) and meet certain conditions. The maximum SAPTO for singles is $2,230, phasing out at 12.5 cents per dollar above $32,279. SAPTO can result in seniors paying no income tax at all on modest incomes.

Tax Offsets vs. Tax Deductions: What's the Difference?

Deductions reduce your taxable income before tax is calculated. Their value depends on your marginal rate — a $1,000 deduction saves a 32.5% taxpayer $325, but only $190 for a 19% taxpayer.

Offsets reduce the tax you owe directly, dollar for dollar, regardless of your marginal rate. So a $700 LITO offset saves every eligible taxpayer exactly $700 in tax. Offsets are generally more valuable for lower-income earners than equivalent deductions.

How the Australian Financial Year Works

Unlike most countries, Australia's financial year runs from 1 July to 30 June. Tax returns for a given year are lodged after 30 June — for example, you lodge your 2025–26 tax return between 1 July 2026 and 31 October 2026 (or later if using a tax agent).

Employers withhold PAYG (Pay As You Go) tax from each paycheck throughout the year based on your expected annual income. If too much is withheld, you receive a refund when you lodge your return. The pay calculator on this page shows the annual tax you would owe, which matches what the ATO calculates at tax time.

How to Use This Australian Salary Calculator

Enter your gross salary and select your pay frequency. The calculator updates in real time:

• Select the 2025–26 financial year for the latest tax rates
• Choose your residency status — Australian resident, foreign resident, or Working Holiday Maker
• Toggle private hospital cover to see whether MLS applies
• Enable HECS-HELP if you have a student debt — the repayment is automatically calculated
• Enter your salary sacrifice to super to see the tax saving
• Use the compare mode to compare two salaries side by side
• Click Share results to copy a link that saves all your inputs