Bonus Tax Calculator
Work out the real tax on a bonus, commission or back pay, and see exactly where the money went.
Your details
You actually keep
$7,950
Bonus paid to you
$15,000
Tax on it
$7,050
Effective rate
47.0%
Where the $7,050 went
There is no special bonus tax rate
Your bonus is ordinary income sitting on top of your salary, so it is taxed at your marginal rate of 47%. If your employer withheld more than $7,050, the excess comes back as a refund when you lodge. It feels like a penalty because the whole bonus is taxed at the top of your income rather than averaged across it.
$2,250 of that is HECS-HELP, not tax
This is the part that genuinely stings, and it is not a tax at all, it goes onto your debt. A bonus lifts your repayment income for the whole year, and the higher repayment rate applies to all of it, not just the bonus. That is why the bite can be far bigger than the bonus alone would suggest.
The tax on your bonus is worked out by calculating your whole year with and without it, which is the only way to catch a HECS-HELP threshold or Medicare levy surcharge tier that the bonus tips you over.
How to use this calculator
- 1. Use your normal annual salary, then the gross bonus before any tax. Commission, back pay and a lump sum leave payout all behave the same way.
- 2. This is usually where the money actually went. A bonus lifts your repayment income for the whole year, not just the bonus.
- 3. Some employers let you direct a bonus into super before it's paid. Enter an amount to see what that does, keeping the $32,500 concessional cap in mind.
- 4. If your employer withheld more than the figure here, the difference comes back as a refund when you lodge. That gap is the whole reason bonuses feel unfair.
Why your bonus looks like it was taxed at 47%
Two things are happening at once, and only one of them is real. The first is withholding. Your employer applies the ATO's lump sum method, which effectively annualises the payment, so a $10,000 bonus paid in one fortnight is treated for a moment as though you earn that much every fortnight. The formula withholds accordingly, which is usually too much.
The second is genuinely true: your bonus sits at the very top of your income, so every dollar of it is taxed at your highest rate, with none of the tax-free threshold or lower brackets left to soften it. On a $90,000 salary with a $15,000 bonus and a HECS-HELP debt, the effective rate on the bonus really is 47%, which is 30% tax plus the 2% Medicare levy plus 15% of HECS-HELP. It feels like a penalty rate, and the arithmetic agrees, it just is not the top tax bracket doing it. The 45% rate itself only starts above $190,000.
How lump sum withholding actually works
The ATO's Schedule 5 tells employers how to withhold on bonuses, commissions and back payments. The standard method takes your normal pay, adds the lump sum, works out what the tax would be if you earned at that rate all year, and withholds the difference in one go. Because the assumption is inflated, so is the withholding.
Some payroll systems use a simpler flat rate instead, which can go either way. Either method produces an estimate, not your tax bill. What you actually owe is settled once, at the end of the year, on your real total income. Which is why the figure on your payslip is worth being annoyed about for roughly one day and then forgetting.
The real tax on a bonus
The honest way to work it out is to calculate your tax for the year with the bonus and without it, and take the difference. That is what this calculator does, rather than multiplying by a bracket rate, because it captures the thresholds a bonus can tip you over.
For 2026-27 the brackets are nil to $18,200, then 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above that, plus the 2% Medicare levy. On an $85,000 salary with a $15,000 bonus and no study debt, the bonus sits entirely in the 30% bracket, so the effective rate lands at 32% once the levy is counted. Not 47%, and nowhere near what the payslip suggested. Our income tax calculator shows the same brackets applied to your whole income.
The HECS-HELP trap, which is the real one
This is the part that costs more than people expect, and it is not tax at all. Compulsory HECS-HELP repayments are worked out on your repayment income for the whole year, so a bonus does not just get its own repayment taken, it lifts the rate applied to everything you earned.
The 2026-27 threshold is $69,528. Sit at $68,000 and take a $5,000 bonus and you have crossed it, so a repayment now applies to the income above the threshold rather than to the bonus alone. In the worked example above, $2,250 of the $7,050 taken from that $15,000 bonus is HECS-HELP. The consolation is that it is not lost, it went onto your debt. See how HECS-HELP repayments actually work for the full mechanics.
Sacrificing a bonus into super
If you would rather not pay your marginal rate on it, you can ask your employer to put some or all of the bonus into super instead. It goes in as a concessional contribution taxed at 15%, against a marginal rate of 32%, 39% or 47% depending on where you sit. On a $10,000 bonus at a 39% marginal rate that is the difference between $6,100 in your hand and $8,500 in your fund.
Two conditions. It has to be arranged before the bonus is paid, because once it hits your account it is assessable income and the moment has passed. And it counts towards the $32,500 concessional cap alongside your employer's contributions, so check your headroom first with our super contribution calculator or you will trade a 32% tax rate for an excess contributions charge.
When you get the over-withheld amount back
At tax time, and not before. The ATO reconciles what was withheld against what you actually owe when you lodge, and pays the difference into your account. Most online lodgements are processed in about two weeks, and your employer's Single Touch Payroll data pre-fills most of it, so there is not much work involved.
The one thing worth doing in the meantime is not spending the over-withheld amount in your head before it arrives. Our tax refund calculator gives you the estimate for the whole year, bonus included, so you know roughly what is coming.
FAQ
Are bonuses taxed at a higher rate in Australia?
No. There is no separate bonus tax rate. A bonus is ordinary income taxed at the same marginal rates as your salary. It only looks worse because the whole bonus sits at the top of your income where your highest rate applies, with none of the tax-free threshold left to cushion it.
Why did my employer withhold so much from my bonus?
Because the ATO's lump sum withholding method effectively annualises the payment, treating it for a moment as if you earned at that rate all year. It is a formula quirk that usually over-withholds, and the excess comes back to you when you lodge. It is not a penalty and it is not your final tax bill.
So is the 47% figure real or not?
It can be, but rarely for the reason people think. On a $90,000 salary with a HECS-HELP debt, a bonus really does lose 47% to 30% tax, 2% Medicare levy and 15% HECS-HELP. The 45% top tax bracket has nothing to do with it, that only starts above $190,000.
Can a bonus push me into a higher tax bracket?
It can, and it matters less than it sounds. Only the income above the threshold is taxed at the higher rate, not your whole salary. For 2026-27 the steps are $18,200, $45,000, $135,000 and $190,000. Crossing one costs you the difference in rate on the amount above it, nothing more.
How does a bonus affect my HECS-HELP repayment?
More than it affects your tax, usually. Repayments are calculated on your total repayment income for the year, so a bonus that lifts you over the $69,528 threshold or into a higher band triggers a repayment across your whole income rather than just the bonus. The upside is that it goes onto your debt rather than to the ATO as revenue.
Can a bonus trigger the Medicare levy surcharge?
Yes, if it lifts you above $105,000 as a single without private hospital cover. The surcharge is 1% to 1.5% depending on the tier and it applies to your income for the year, not just the bonus, so it can be a nasty extra. Toggle private cover off in the calculator to see what it would cost you.
Can I put my bonus into super instead?
Yes, if you arrange it with your employer before the bonus is paid. It goes in as a concessional contribution taxed at 15% rather than your marginal rate, which is a large gap at higher incomes. Check it fits inside the $32,500 concessional cap alongside your employer's contributions first.
Does the higher tax follow me next year?
No. Tax brackets apply to each financial year on its own. A one-off bonus lifts your income for that year only, and the following year is assessed on whatever you actually earn. There is no permanent reclassification.
Is a sign-on or retention bonus taxed differently?
No, both are ordinary assessable income in the year you receive them, taxed at your marginal rate, with the same lump sum withholding treatment. The only thing worth managing is timing, since which financial year the payment lands in can change your bracket, your HECS repayment and your surcharge exposure.
Can I ask for my bonus to be split across two pay periods?
You can ask, and some employers will. It lowers the withholding on each payment, which helps cash flow, but if both payments fall in the same financial year your total tax is identical. It changes when you hold the money, not how much you keep.
What about a lump sum annual leave payout when I leave a job?
Similar treatment, taxed as income at your marginal rate with lump sum withholding applied. Unused long service leave and genuine redundancy payments have their own rules and concessional caps, so this calculator is a rough guide for those rather than an answer.
How accurate is this compared to my payslip?
It shows what you actually owe, which is often not what your payslip withheld. The gap between the two is the point of the page. Real withholding also varies with pay cycle rounding and how your payroll system implements the ATO schedules, so use this for the true cost and your payslip for cash flow.
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Disclaimer
This calculator works out the tax on a bonus by calculating your full year with and without it, using 2026-27 Australian resident tax brackets, the low income tax offset, the 2% Medicare levy and its low income shade-in, Medicare levy surcharge tiers from $105,000 for singles, and the 2026-27 HECS-HELP repayment threshold of $69,528. It shows what you owe, which will usually differ from what your employer withholds under the ATO's lump sum withholding schedules. It does not model genuine redundancy payments, unused long service leave, employment termination payments, foreign employment income, or salary packaging arrangements other than a simple super contribution. Rates and thresholds are set by the government and change each financial year. This tool provides estimates only and is not financial or tax advice. Confirm current figures at ato.gov.au or speak with a registered tax agent.