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.