How to Use the Australian Tax Calculator
The Australian Tax Calculator computes PAYG withholding, Medicare levy, and take-home pay for the 2026–27 financial year using the official ATO tax tables. It handles all income levels from below the tax-free threshold to high earners, including the Low Income Tax Offset (LITO).
Enter your annual taxable income, residency status (Australian resident for tax purposes or non-resident), and any salary sacrifice amounts. The calculator shows income tax by bracket, the Medicare levy (2%), LITO reduction, and your net take-home monthly and fortnightly.
A key nuance is the Low Income Tax Offset (LITO): it reduces tax payable by up to $700 for incomes under $37,500, phasing out at higher incomes. This means that with the tax-free threshold and LITO combined, Australian residents effectively pay no tax until income exceeds approximately $22,575 for 2026–27.
📊 Worked Example
Australian resident, $85,000 gross income, 2026–27:
- Income tax (before offsets): $16,288
- Low Income Tax Offset: $0 (phased out above $66,667)
- Medicare Levy (2%): $1,700
- Total tax: $17,988
- Monthly take-home: $5,584
Common Use Cases
- ✅ Calculating take-home pay for a new job offer in Australia
- ✅ Understanding how Australian income tax brackets apply to your salary
- ✅ Comparing take-home pay between Australian states (pre-tax is same, but cost of living varies)
- ✅ Estimating annual tax liability before lodging your tax return
- ✅ Understanding the Medicare levy and how to get an exemption
- ✅ Calculating tax for Australian working holiday makers or non-residents
Frequently Asked Questions
What are the Australian income tax rates for 2026–27?
Australian resident tax rates: 0% on income up to $18,200 (tax-free threshold), 16% on $18,201–$45,000, 30% on $45,001–$135,000, 37% on $135,001–$190,000, and 45% on income above $190,000. The Stage 3 tax cuts (effective from 1 July 2024) restructured these brackets significantly.
What is the Medicare Levy?
Most Australian taxpayers pay a Medicare Levy of 2% of their taxable income, which funds Australia's universal healthcare system (Medicare). Low-income earners pay a reduced levy or none at all (singles earning under ~$26,000 are exempt). An additional Medicare Levy Surcharge (1–1.5%) applies to high earners without private hospital cover.
What is the tax-free threshold?
Australian residents can claim the tax-free threshold of $18,200 — meaning the first $18,200 of income is tax-free. Non-residents cannot claim this threshold; the calculator uses the ATO’s latest published foreign-resident rate of 30% from the first dollar earned. Always claim the threshold with your primary employer by submitting a Tax File Number Declaration form.
How does the superannuation guarantee affect take-home pay?
Superannuation (super) contributions from your employer are 11.5% of your ordinary time earnings in 2024–25, rising to 12% from 1 July 2025. These are paid on top of your salary — you don't lose them from your take-home. However, salary-sacrificed super contributions do reduce take-home pay while reducing income tax.
Do working holiday makers pay Australian tax?
Working holiday makers (visa 417 or 462) pay tax at a flat 15% on all income up to $45,000 and then standard non-resident rates above that. They cannot claim the tax-free threshold. They're also subject to superannuation at the same rates as other workers but can claim their super balance when they leave Australia permanently.