Income Tax Calculator
Calculate your Australian income tax, Medicare levy, and take-home pay for the 2026-27, 2025-26, or 2023-24 financial year.
Your Income
Tax Settings
Includes 15% rate cut (from 1 July 2026)
Super contribution: $10,800 / year
Your take-home pay
per year
$5,890
/ month
$2,718
/ fortnight
$1,359
/ week
2026-27 Australian Tax Brackets
| Taxable income | Tax rate | Tax on this income |
|---|---|---|
| $0 - $18,200 | 0% | Nil |
| $18,201 - $45,000 | 15% (was 16%) | 15c for each $1 over $18,200 |
| $45,001 - $135,000 | 30% | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 - $190,000 | 37% | $31,020 plus 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,370 plus 45c for each $1 over $190,000 |
Source: Australian Taxation Office. Effective 1 July 2026. These rates do not include the Medicare levy (2%).
How Tax is Calculated
Australia uses a progressive tax system, which means you do not pay the same rate of tax on every dollar you earn. Instead, your income is divided into brackets, and only the portion of your income within each bracket is taxed at that bracket's rate.
For example, if you earn $90,000 in 2026-27, the first $18,200 is tax-free. The next $26,800 (from $18,201 to $45,000) is taxed at 15%. The remaining $45,000 (from $45,001 to $90,000) is taxed at 30%. This is why your effective tax rate is always lower than your marginal rate.
The Medicare levy of 2% is charged on your entire taxable income (subject to low-income thresholds) and funds Australia's public healthcare system. Some higher-income earners without private hospital cover may also pay the Medicare Levy Surcharge.
Superannuation is paid by your employer on top of your salary at the current rate of 12% (2025-26). It is not deducted from your take-home pay but is included here for reference.
2026-27 Federal Budget: Tax Changes
What's new from 1 July 2026
The legislated personal income tax rate cuts continue: the second bracket rate drops from 16% to 15% on taxable income between $18,201 and $45,000. This delivers up to $268 extra per year for anyone earning above $45,000, on top of the Stage 3 savings already in effect.
$1,072
saved/yr on $45k
$1,697
saved/yr on $70k
$2,322
saved/yr on $95k
$4,797
saved/yr on $190k+
Savings compared to 2023-24 (pre-Stage 3) rates
The ongoing personal income tax rate reductions build on the Stage 3 tax cuts that took effect on 1 July 2024. The original Stage 3 plan (announced in 2019) was revised in January 2024 to deliver broader benefits across all income levels. Stage 3 reduced the 19% bracket to 16%, lowered the 32.5% bracket to 30%, raised the 37% threshold from $120,000 to $135,000, and raised the top 45% threshold from $180,000 to $190,000.
From 1 July 2026, the second bracket rate drops a further 1 percentage point from 16% to 15%. This is already legislated and delivers a maximum additional saving of $268 per year for anyone earning above $45,000. A further legislated reduction to 14% is scheduled for 1 July 2027, along with the new Working Australians Tax Offset (WATO) of up to $250 per year for salary, wage, and sole trader income earners.
For an average full-time worker earning around $95,000, the combined tax savings from 2026-27 amount to approximately $2,322 per year compared to the old 2023-24 rates — roughly $45 extra per week in take-home pay. Workers on lower incomes also benefit: someone earning $45,000 saves $1,072 per year, while someone on $70,000 saves around $1,697. Use the tax year toggle above to compare your tax across different years.
Legislated rate reduction schedule ($18,201 – $45,000 bracket)
2023-24
19%
2024-26
16%
2026-27
15%
2027-28
14%
Medicare Levy and Medicare Levy Surcharge
2% Medicare Levy
The Medicare levy is a flat 2% tax on your entire taxable income that funds Australia's public healthcare system. Most Australian residents are liable to pay the Medicare levy, though low-income earners may qualify for a reduction or exemption. For the 2025-26 financial year, single taxpayers earning below $28,011 may be exempt from the levy, with a phased reduction for incomes between $28,011 and $35,014. Family thresholds are $47,238 (plus $4,338 per dependent child).
1%
$101k – $118k
singles (2025-26)
1.25%
$118k – $158k
singles (2025-26)
1.5%
$158k+
singles (2025-26)
In addition to the standard Medicare levy, the Medicare Levy Surcharge (MLS) is an extra tax of between 1% and 1.5% that applies to higher-income earners who do not have private hospital cover. The MLS thresholds for 2025-26 are: 1% for singles earning $101,001 to $118,000 (families $202,001 to $236,000), 1.25% for singles earning $118,001 to $158,000 (families $236,001 to $316,000), and 1.5% for singles earning above $158,000 (families above $316,000). For many higher-income earners, purchasing basic private hospital cover is cheaper than paying the surcharge.
This calculator includes the standard 2% Medicare levy but does not calculate the Medicare Levy Surcharge, as it depends on whether you hold private hospital cover. If you earn above $101,000 as a single (or $202,000 as a family) and do not have private hospital cover, you should factor in the additional surcharge when planning your finances.
New: $1,000 Instant Tax Deduction (2026-27)
No receipts required
From the 2026-27 income year, eligible Australian workers can claim a $1,000 standard deduction for common work-related expenses without needing to keep receipts. This covers home office running costs, stationery, work-related phone and internet expenses, professional subscriptions, and minor work-related travel expenses.
The government estimates 6.2 million workers (42% of taxpayers) will benefit from this measure, with an average tax saving of $205 in 2026-27. The $1,000 standard deduction reduces compliance costs by approximately $380 million per year.
You can choose between the $1,000 standard deduction or claiming your actual work-related expenses under existing tax rules — whichever gives you a better outcome. If your actual deductible expenses exceed $1,000, you should continue claiming actual costs with receipts. The standard deduction is best suited for workers with lower or scattered work-related expenses who currently claim less than $1,000.
Common Tax Deductions for Australian Employees
Work from Home
67c/hr fixed rate method, or claim actual costs
Car Expenses
Work travel between sites and workplaces
Uniforms & Clothing
Protective or occupation-specific clothing
Tools & Equipment
Work-related purchases and equipment
Self-Education
Courses and training related to current job
Union & Professional Fees
Union memberships and professional associations
It is important to note that deductions only reduce the tax you pay at your marginal rate - they do not provide a dollar-for-dollar reduction in your tax bill. For example, if your marginal rate is 30% and you claim a $1,000 deduction, your tax saving is $300 (not $1,000). This means it never makes financial sense to spend money purely for the purpose of getting a tax deduction. Only claim deductions for expenses you have genuinely incurred in connection with earning your income, and always keep records and receipts as the ATO may ask for evidence.
Understanding Your Tax Return
Earn Income (July – June)
Your employer withholds tax from each pay cycle based on the PAYG (Pay As You Go) withholding schedule and sends it to the ATO on your behalf throughout the financial year (1 July to 30 June).
Lodge Your Return (After 30 June)
Most Australians lodge through myTax, the ATO's free online service via myGov. Your employer's income and withholding data is pre-filled from mid-August each year. You can also use a registered tax agent for more complex affairs.
ATO Calculates Your Tax
The ATO compares the total tax withheld during the year with the actual tax you owe based on your total income and deductions. If you have investment properties, capital gains, or business income, these are all factored into the final calculation.
Refund or Bill
If too much was withheld, you receive a refund. If too little was withheld (common with multiple income sources or investment income), you will owe the ATO additional tax. Tax returns are due by 31 October if you self-lodge, or typically by 15 May of the following year if you use a registered tax agent.