Key Takeaways
- • On a $90,000 taxable income in FY 2025–26, your estimated annual take-home pay is $70,412 ($5,868/month).
- • You pay $19,588 in total tax — $17,788 income tax less $0 LITO, plus $1,800 Medicare levy.
- • Your marginal tax rate is 30.0% and your effective tax rate is just 21.8% — the gap shows the benefit of progressive taxation and the tax-free threshold.
- • From 1 July 2026, the legislated rate cut drops the second bracket from 16% to 15%, saving up to $268/year for earners above $45,000 — select FY 2026–27 above to see your projected figure.
Australian Income Tax Overview
Australia uses a progressive income tax system for residents, meaning the rate you pay increases with each additional dollar of income. The first $18,200 of taxable income each year is completely tax-free. Above that, rates step from 16% up to 45% for incomes over $190,000 — but only the income in each bracket is taxed at that bracket's rate.
On top of income tax, most residents pay a 2% Medicare levy that helps fund Australia's public health system. Lower-income earners benefit from the Low Income Tax Offset (LITO) — a dollar-for-dollar reduction of up to $700 — which keeps the effective tax burden near zero for incomes well above the $18,200 threshold. This calculator covers both FY2025-26 and FY2026-27 (with the legislated 16% → 15% rate cut taking effect 1 July 2026).
ATO-verified rates
All brackets, LITO taper, and Medicare thresholds checked against official ATO publications for FY2025-26 and FY2026-27.
Take-home by pay period
See your weekly, fortnightly, and monthly take-home instantly — useful for budgeting and comparing job offers.
Two financial years
Switch between FY2025-26 and FY2026-27 to see the impact of the legislated rate cut before it takes effect.
Private & free
Everything runs in your browser — no sign-up, no data leaves your device, and no hidden fees.
How to Use This Calculator
- 1
Enter your annual taxable income
Type your gross salary (before tax) or use the slider. You can also tap a preset — $60k, $90k, $120k, or $180k.
- 2
Choose your financial year
Select FY 2025–26 for the current year, or FY 2026–27 to see your projected take-home after the legislated rate cut takes effect 1 July 2026.
- 3
Read your Tax Summary
The panel updates instantly: income tax, LITO offset, Medicare levy, total tax, effective rate, marginal rate, and take-home pay by week, fortnight, and month.
Worked example — $90,000 in FY2025-26
- Gross income
- $90,000
- Income tax (before offsets)
- $17,788
- LITO offset
- −$0
- Medicare levy (2%)
- $1,800
- Total tax
- $19,588
- Take-home pay
- $70,412
Effective rate: 21.8% — marginal rate: 30%.
Take-Home Pay at a Glance — FY2025-26 Examples
| Annual income | Income tax | Medicare levy | Take-home pay | Effective rate |
|---|---|---|---|---|
| $45,000 | $3,963 | $900 | $40,137 | 10.8% |
| $90,000 | $17,788 | $1,800 | $70,412 | 21.8% |
| $135,000 | $31,288 | $2,700 | $101,012 | 25.2% |
| $190,000 | $51,638 | $3,800 | $134,562 | 29.2% |
FY2025-26 illustrative figures for Australian tax residents. Income tax shown after LITO where applicable. Medicare Levy Surcharge, HELP/HECS debt and other offsets are not included.
Understanding Your Tax Position
Knowing your effective and marginal tax rates is the starting point for sound financial planning. Your effective rate tells you the overall share of your income that goes to tax — useful for comparing take-home pay across roles or salaries. Your marginal rate tells you how much of each additional dollar of income you keep, which matters when weighing up overtime, salary negotiation, side income, or deductible contributions.
Common planning levers include salary sacrifice into superannuation (which is taxed at 15% inside the fund rather than your marginal rate), claiming legitimate work-related deductions, and — where eligible — voluntary super top-ups. This calculator shows your current position; a registered tax agent or financial adviser can help you model specific strategies.
This tool is for planning and education purposes only. It does not constitute financial or tax advice. Always confirm your actual liability with the ATO or a registered tax agent before lodging your return.
How We Calculate Your Australian Tax
We apply the same three-step formula the ATO uses for resident taxpayers. Starting from your taxable income, the calculation is:
Income tax = progressive brackets applied to taxable income
Net income tax = income tax − LITO offset (non-refundable, max $700)
Medicare levy = 2% × taxable income (with low-income shade-in below $35,014)
Total tax = net income tax + Medicare levy
Take-home pay = taxable income − total tax
Progressive brackets (FY2025-26): 0% on the first $18,200; 16% on $18,201–$45,000; 30% on $45,001–$135,000; 37% on $135,001–$190,000; 45% above $190,000. For FY2026-27, the only change is that the second band drops to 15% (legislated under the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024, effective 1 July 2026), saving up to $268 per year for earners above $45,000. See the full rate table at ATO tax rates for Australian residents.
LITO (Low Income Tax Offset): up to $700 for incomes ≤$37,500; tapers at 5c/$ to $325 at $45,000; then at 1.5c/$ until it reaches nil at ~$66,667. LITO reduces your income tax; it cannot produce a refund. See the ATO Low Income Tax Offset page.
Medicare levy: 2% of taxable income for incomes above $35,014 (single, FY2025-26). Below $28,011 — nil; between $28,011 and $35,014 — a shade-in at 10c per dollar above $28,011 (so you never pay more than the full 2% rate). Thresholds were raised 2.9% in the May 2026 Federal Budget. See the ATO Medicare levy reduction for low-income earners.
Assumptions: you are an Australian resident for tax purposes; the income entered is your taxable income (gross salary less any pre-tax deductions your employer applies); only a single set of Medicare thresholds (for individuals) is applied.
Not included: Medicare Levy Surcharge, HELP/HECS debt repayments, superannuation contributions tax, non-resident rates, capital gains, fringe benefits, or any tax offsets other than LITO (e.g., SAPTO, Beneficiary Tax Offset). These results are estimates for planning purposes, not a formal tax assessment. Confirm your exact liability with the ATO or a registered tax agent before lodging.
Example Calculation
A resident earning A$90,000 pays A$17,788 in income tax under the current brackets, plus a 2% Medicare levy of A$1,800 — about A$19,588 total, leaving roughly A$70,400 take-home.
- Taxable income
- A$90,000
- Tax-free threshold
- A$18,200
- 16% bracket (to $45k)
- A$4,288
- 30% bracket (remainder)
- A$13,500
- Medicare levy (2%)
- A$1,800
Illustrative example using current resident rates. Excludes offsets such as LITO and HELP repayments.
Frequently Asked Questions About Australian Income Tax
What is the tax-free threshold in Australia?
The tax-free threshold is $18,200. This means the first $18,200 of your annual taxable income is not subject to income tax at all. If your total income is below this amount for the year, you pay zero income tax. For income above $18,200, only the excess is taxed — at 16% on the next $26,800 up to $45,000, then higher rates apply. The threshold has been at $18,200 since FY2012-13 and is unchanged for FY2025-26 and FY2026-27. If you earn only a small amount over the threshold, the Low Income Tax Offset (LITO) of up to $700 can further reduce your tax bill, often to zero for incomes well above $18,200.
How is Australian income tax calculated for FY2025-26?
Tax is calculated on a progressive (sliding scale) basis. For FY2025-26, the resident brackets are: 0% on the first $18,200; 16% on $18,201–$45,000; 30% on $45,001–$135,000; 37% on $135,001–$190,000; and 45% above $190,000. You then subtract the Low Income Tax Offset (LITO, up to $700) and add the 2% Medicare levy. For example, on a $90,000 income: the income tax before offsets is $17,788 (no LITO applies above $66,667), plus $1,800 Medicare levy = $19,588 total tax and a take-home of $70,412 — an effective rate of 21.8%. Use the calculator above to see your own figures instantly. You can also compare with our Singapore Tax Calculator to see how Australian rates compare.
What is the Medicare levy and who is exempt?
The Medicare levy is a 2% charge on your taxable income that helps fund Australia's public health system. For FY2025-26, if your income is $28,011 or less (single threshold, raised 2.9% in the May 2026 Budget), you pay no Medicare levy. Between $28,011 and $35,014, the levy phases in at 10 cents for every dollar above $28,011 — so you never pay more than the full 2% rate. Above $35,014, the full 2% applies. Exemptions also apply to certain low-income seniors and pensioners, foreign residents for the full year, and some visa holders. The Medicare Levy Surcharge (an additional 1–1.5% for higher earners without private hospital cover) is a separate charge and is not modelled in this calculator. See the ATO Medicare levy page for full details.
What is the Low Income Tax Offset (LITO)?
The Low Income Tax Offset (LITO) is a non-refundable tax offset that reduces the income tax you owe (but cannot create a refund). For FY2025-26 and FY2026-27, the maximum LITO is $700, available on incomes up to $37,500. It then tapers away: at 5 cents per dollar of income between $37,500 and $45,000 (reducing from $700 to $325), and then at 1.5 cents per dollar from $45,000 until it reaches nil at approximately $66,667. If your income is above $66,667, you receive no LITO. Because it is a tax offset (not a deduction), it reduces your tax dollar for dollar. This is why some people on incomes just above $18,200 still pay zero tax — the LITO wipes out any small tax liability. See the ATO LITO page for full details.
What changes in FY2026-27?
The main change for FY2026-27 is a legislated income tax rate cut: the second bracket rate drops from 16% to 15%. This band covers taxable income between $18,201 and $45,000 (a range of $26,800). The saving is exactly $268 per year for anyone earning $45,000 or more (and proportionally less for incomes between $18,200 and $45,000 — for example, about $118 at $30,000). The cut was passed as the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024 and takes effect from 1 July 2026. All other brackets (0%, 30%, 37%, 45%), the Medicare levy thresholds, and LITO parameters remain the same for 2026-27. Select "FY 2026–27" in the calculator above to see your projected take-home with the lower rate applied.
Is superannuation included in my salary or in this calculator?
Superannuation (super) is separate from your take-home pay and is not included in this calculator. From 1 July 2025, your employer is required to pay a Superannuation Guarantee (SG) contribution of 12% of your ordinary time earnings on top of (i.e., in addition to) your salary. This means if you earn $90,000, your employer must also contribute $10,800 to your super fund each year — it does not reduce your salary. This calculator models only your taxable income (your salary/wages before tax) and the associated income tax, Medicare levy, and LITO. Super contributions are generally taxed at 15% within the fund and are invested for your retirement. To model how those contributions grow over time, try our Compound Interest Calculator.
What does this calculator NOT include?
This calculator is scoped to Australian tax residents and covers income tax (progressive brackets), the Low Income Tax Offset (LITO), and the Medicare levy (with the low-income shade-in). It does not model: the Medicare Levy Surcharge (MLS, which applies to higher earners without private hospital cover); HELP/HECS student loan repayments (which reduce your net pay if you have a study debt); superannuation contributions or the 15% contributions tax; non-resident tax rates (which are higher and different); other tax offsets such as the Low and Middle Income Tax Offset (LMITO, which ended after FY2021-22), Seniors and Pensioners Tax Offset (SAPTO), or Beneficiary Tax Offset; salary packaging or fringe benefits; or capital gains. For a comprehensive tax picture, speak to a registered tax agent or use the ATO's myTax system.
What's the difference between marginal and effective tax rate?
Your marginal tax rate is the rate that applies to the last (or next) dollar of income you earn. If you earn $90,000, your marginal rate is 30% — because the $90,000 falls in the $45,001–$135,000 bracket taxed at 30%. That does not mean you pay 30% on all your income. Your effective tax rate is your total tax as a percentage of your total income. At $90,000 in FY2025-26, total tax (income tax $17,788 + Medicare $1,800) is $19,588, making the effective rate about 21.8%. The difference matters for decisions like salary negotiation or side income: a $5,000 pay rise is taxed at your 30% marginal rate plus the 2% Medicare levy, so you keep about $3,400 of it — not the roughly $3,910 you might expect if your lower 21.8% effective rate applied to the extra income. The calculator shows both rates in the Tax Summary panel. Compare it to our Mortgage Calculator to see how your after-tax income affects borrowing power.
How accurate is this estimate?
This calculator uses the ATO-published resident tax brackets for FY2025-26 and FY2026-27, the LITO parameters confirmed for both years, and the 2025-26 Medicare levy low-income thresholds ($28,011 / $35,014) verified against the May 2026 Budget. For straightforward salary income without a HECS/HELP debt, no private hospital cover surcharge, and no other offsets, the figure should match what the ATO calculates very closely. Results become less accurate if you have a HELP debt, are subject to the Medicare Levy Surcharge, have significant investment income or capital gains, or claim deductions. This calculator produces an estimate for planning purposes only, not an official tax assessment. Always confirm your actual liability with the ATO or a registered tax agent before lodging.