Income Tax Calculator
Work out the tax on any taxable income, from any source, and see exactly which slice of it is taxed at which rate.
Your details
Total tax per year
$17,080
Taxable income
$83,000
Income tax
$15,420
Left after tax
$65,920
Your income, sliced by tax bracket
| Bracket | Rate | Your income in it | Tax on it |
|---|---|---|---|
| $0 to $18,200 | 0% | $18,200 | $0 |
| $18,201 to $45,000 | 15% | $26,800 | $4,020 |
| $45,001 to $135,000 | 30% | $38,000 | $11,400 |
Marginal rate
32.0%
What the next dollar you earn costs you, Medicare levy and any offset taper included.
Effective rate
20.6%
What you actually pay across your whole income. Always the lower of the two.
Your deductions are worth $640
Claiming $2,000 cuts your tax bill by $640, so you get back about 32c per dollar claimed. A deduction never refunds the whole expense, it just stops that part of your income being taxed.
Deductions are valued by running the whole calculation twice, with and without them, rather than multiplying by your marginal rate. That matters near a threshold, where a deduction can straddle two brackets or pull you back under the Medicare levy shade-in.
How to use this calculator
- 1. Employment income goes in the first field. Everything else assessable goes in the second: freelancing, rent, bank interest, dividends, the taxable half of a capital gain.
- 2. Be realistic rather than optimistic. The calculator prices them properly by running your whole tax bill with and without them, so you see the real saving, not a rule of thumb.
- 3. Foreign residents and working holiday makers use different brackets and pay no Medicare levy. Private hospital cover and a HECS-HELP debt both change the total.
- 4. It shows how much of your income sits in each bracket and what each slice costs. That's the part that kills the 'a pay rise will push me into a higher bracket' myth for good.
How the 2026-27 tax brackets work, slice by slice
Australia taxes income progressively, which means you never pay one flat rate on the whole lot. Each slice of your income is taxed at the rate for the bracket it falls in, and the slices below it stay exactly where they were.
| Taxable income | Rate on that slice |
|---|---|
| $0 to $18,200 | Nil, the tax-free threshold |
| $18,201 to $45,000 | 15% |
| $45,001 to $135,000 | 30% |
| $135,001 to $190,000 | 37% |
| $190,001 and above | 45% |
Take an $80,000 taxable income. The first $18,200 is free. The next $26,800 is taxed at 15%, which is $4,020. The remaining $35,000 is taxed at 30%, which is $10,500. Total income tax, $14,520, before the Medicare levy and before any offsets. The 30% rate never reaches back and touches the earlier slices. For the full walk through, see our guide to Australian tax brackets.
Marginal rate versus effective rate
Your marginal rate is what the next dollar costs you. Your effective rate is your total tax divided by your total income. On that $80,000 the marginal rate is 30% but the effective income tax rate is about 18.2%, because the tax-free threshold and the 15% bracket did most of the work underneath.
Mixing the two up is where the myth comes from: "I don't want the pay rise, it'll push me into a higher bracket and I'll take home less." That has never once been true in Australia. Go from $44,000 to $46,000 and only the $1,000 above $45,000 is taxed at 30%, costing $300 instead of $150. You are still $1,850 better off. The marginal rate is the useful number for decisions, should I take the extra shift, is that deduction worth chasing, should I put more into super. The effective rate is the useful number for understanding your actual tax load.
The Medicare levy and its low income shade-in
On top of income tax, most residents pay a 2% Medicare levy on taxable income. At $80,000 that is another $1,600. Below $28,011 you pay none at all, and between $28,011 and roughly $35,014 you pay a shaded-in amount that ramps up gradually rather than landing all at once. That shade-in is why someone on $30,000 has a surprisingly small tax bill.
The Medicare levy surcharge is a different animal. It applies to singles earning above $105,000 who do not hold eligible private hospital cover, at 1%, 1.25% or 1.5% depending on the tier. At $130,000 with no cover that is $1,625 a year, which is often more than a basic policy costs. Toggle private hospital cover off in the calculator to see it appear in your own numbers.
The low income tax offset, up to $700 straight off the bill
LITO reduces the tax itself rather than your income. It is worth the full $700 up to a taxable income of $37,500, then tapers by 5c per dollar to $45,000, then by a further 1.5c per dollar until it disappears at $66,667. The ATO applies it automatically when you lodge, and your employer factors it into withholding, so you do not need to claim it.
Because it comes off the tax and not the income, an offset beats a deduction of the same size every time. A $700 offset is $700 less tax. A $700 deduction at a 30% marginal rate is only about $224 less tax once the Medicare levy is counted. Worth knowing before you go hunting for deductions you do not really have.
What a deduction is actually worth
A $1,000 deduction does not put $1,000 back in your pocket. It stops $1,000 of your income being taxed, so you save your marginal rate on it. In the 30% bracket that is $300, or about $320 once the 2% Medicare levy is included. In the 37% bracket it is closer to $390. You still spent the $1,000.
Which is the whole point: claim what you genuinely spent on earning your income, never buy something purely for the deduction. This calculator prices your deductions by running the entire calculation twice, with and without them, rather than multiplying by a headline rate. That matters when a deduction straddles two brackets, or drags you back under the Medicare levy shade-in or a HECS-HELP repayment step, where the real saving is much bigger than the bracket rate suggests. Our list of deductions you can actually claim is the place to start.
Tax on income that is not salary
This is where a tax calculator beats a pay calculator. Assessable income is a much bigger bucket than your payslip. Side hustle earnings from freelancing, Airtasker, Uber or Etsy are ordinary income, taxed at your marginal rate exactly like salary. Rent is assessable too, though you offset it with deductible expenses first and only the net figure gets added on. Bank interest counts, and your bank reports it to the ATO whether you remember it or not.
Dividends get added at their grossed-up value, with the franking credit then reducing your tax bill, which is why franking credits can turn into a refund for lower earners. Capital gains have no separate rate in Australia at all: hold an asset more than 12 months and the 50% discount halves the gain, then whatever remains is added to your income and taxed at your marginal rate. Our capital gains tax calculator works out that taxable half for you, then you can drop it into the other income field here.
FAQ
What is the tax-free threshold in Australia for 2026-27?
It's $18,200. You pay no income tax on the first $18,200 of taxable income. If you earned less than that but had tax withheld during the year, you should still lodge a return, because that withheld tax is yours to get back.
What's the difference between this and the salary calculator?
The salary calculator answers 'what lands in my bank account each pay cycle', built around a salary with super, HECS and pay frequencies. This one answers 'how much tax do I owe', for income from any source, and shows the bill sliced bracket by bracket with your marginal rate, effective rate and the value of your deductions. Different questions, different tools.
Will a pay rise push me into a higher bracket and leave me worse off?
No, and it never has. Only the income above the new threshold is taxed at the higher rate. Moving from $44,000 to $46,000 means $1,000 taxed at 30% instead of 15%, an extra $150 of tax on a $2,000 raise. You keep the rest. The bracket table in the results shows this directly.
How much is a tax deduction actually worth?
Roughly your marginal rate as a fraction of the amount claimed. $1,000 claimed in the 30% bracket saves about $320 once the Medicare levy is counted, not $1,000. This calculator works out the real figure by comparing your whole tax bill with and without the deduction, which is more accurate than the rule of thumb near a threshold.
What is the difference between a tax offset and a tax deduction?
A deduction reduces your taxable income before the tax is worked out. An offset reduces the tax bill itself after it's been calculated. A $700 offset is $700 less tax. A $700 deduction at 30% is about $224 less tax. Offsets are worth more, dollar for dollar, which is why the low income tax offset does so much work at lower incomes.
Do I pay tax on bank interest and dividends?
Yes to both. Interest is assessable income and your bank reports it to the ATO automatically. Dividends are included at their grossed-up value when they're franked, with the franking credit then applied against your tax bill. If your marginal rate is below the company tax rate, that can turn into a refund.
How is a capital gain taxed in Australia?
There's no separate capital gains tax rate. The gain is added to your other income and taxed at your marginal rate. If you held the asset for more than 12 months, the 50% CGT discount applies first, so only half the gain goes in. Work out the taxable portion with our capital gains tax calculator, then enter it in the other income field here.
Does the Medicare levy apply to everyone?
Not quite. It's 2% of taxable income for most residents, but below $28,011 you pay none, and between there and about $35,014 a reduced shade-in amount applies. Foreign residents and working holiday makers don't pay it at all, which is why switching residency in the calculator changes the total.
When does the Medicare levy surcharge kick in?
For singles, above $105,000 of income for surcharge purposes without eligible private hospital cover. It runs at 1%, 1.25% or 1.5% depending on the tier, on top of the standard 2% levy. Families use higher thresholds that this calculator doesn't model, so treat the single figure as the base case.
Does this work if I'm a foreign resident or on a working holiday visa?
Yes, switch the residency field. Foreign residents pay 30% from the first dollar with no tax-free threshold, no Medicare levy and no low income tax offset. Working holiday makers on a 417 or 462 visa pay 15% on the first $45,000 then resident-style rates above that, also with no Medicare levy or LITO.
Why is my HECS-HELP repayment included in the total?
Because it comes out of the same pay, even though it isn't technically a tax. Once your repayment income passes $69,528 for 2026-27 a compulsory repayment applies, and it goes straight onto your debt rather than to the ATO as revenue. Toggle it off if you want the tax figure on its own.
Is this the same as my actual tax return?
It's a close estimate of the core calculation, not a substitute for lodging. It doesn't model spouse and dependant thresholds, most tax offsets beyond LITO, foreign income, trust or partnership distributions, or business concessions. If your situation involves any of those, use this for the shape of the answer and a registered tax agent for the real one.
Related reading
Tax Deductions You Can Claim as an Australian Employee
The work-related tax deductions Australian employees most often miss, the three ATO rules to know, the two work-from-home methods, and how to claim correctly.
Tax Offsets in Australia: LITO, SAPTO and More Explained
How tax offsets work in Australia: the difference from a deduction, why most are non-refundable, and the main 2024-25 offsets (LITO, SAPTO, health rebate).
The Tax-Free Threshold Explained ($18,200)
Australia's tax-free threshold is $18,200. Who can claim it, how to claim it from the right employer, what happens with a second job, and how to fix mistakes.
📚 Recommended reading
The Barefoot Investor
Scott Pape
The Barefoot Investor
Australia's best-selling money book ever. A simple system for accounts, budgeting, debt and a real emergency fund in one.
Sort Your Money Out and Get Invested
Glen James
Sort Your Money Out and Get Invested
From the host of the my millennial money podcast, a step-by-step Aussie plan to fix your spending, clear debt and actually start investing. Practical and refreshingly free of finance-bro nonsense.
Some links above are affiliate links. If you buy through them, Snowball Invest may earn a small commission at no extra cost to you. We only recommend books we'd suggest anyway.
SnowLetter
Fresh snow in your inbox once a week: Australia's money news, quick tips, and our best reads.
Disclaimer
This calculator uses 2026-27 Australian income tax brackets for residents, foreign residents and working holiday makers, the 2% Medicare levy with its low income shade-in from $28,011, Medicare levy surcharge tiers from $105,000 for singles, the low income tax offset of up to $700 phasing out at $66,667, and 2026-27 HECS-HELP repayment thresholds. It does not model family or dependant thresholds, tax offsets other than LITO, foreign income, trust and partnership distributions, small business concessions, or the tax treatment of superannuation contributions. Rates and thresholds are set by the government and change each financial year. This tool provides estimates only and is not financial, tax or legal advice. Confirm current figures at ato.gov.au or speak with a registered tax agent.