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Australia's income tax system is marginal, which means each slice of your income is taxed at a different rate. Earnings up to $18,200 pay no tax at all. The next slice up to $45,000 pays 16% on the dollars above $18,200. The slice up to $135,000 pays 30% on the dollars above $45,000. Income from $135,001 to $190,000 pays 37%. Anything above $190,000 pays 45%.
This trips a lot of people up. A salary jump from $44,000 to $46,000 doesn't mean every dollar suddenly gets taxed at 30%. Only the $1,000 that crossed the bracket boundary pays the higher rate. The rest of your income keeps its lower-bracket treatment, which is why turning down a pay rise to "avoid the next bracket" is almost always the wrong intuition.
Your marginal rate is the rate that applies to the next dollar you earn — useful for thinking about overtime, bonuses, or whether to salary sacrifice. Your effective rate is the average across all your income, and it's always lower than your marginal rate because the lower brackets bring the blended average down. The calculator shows both.
The Stage 3 tax cuts legislated in early 2024 took effect from 1 July 2024. The most consequential change widened the 30% bracket to cover income from $45,000 all the way to $135,000. The old structure stopped that bracket at $90,000 and applied 37% to income between $90,000 and $135,000 — so people earning in that range now keep roughly $3,450 a year more than they would have under the pre-Stage 3 settings.
Stage 3 keeps rolling out beyond 2024–25. Under the Treasury Laws Amendment (Cost of Living—Tax Cuts) Act 2024, the second-bracket rate drops from 16% to 15% from 1 July 2026, and to 14% from 1 July 2027. Both reductions are legislated, though Parliament retains the ability to amend tax law before either takes effect. Use the year selector at the top of the calculator to model your take-home pay under each year's bracket settings, including the legislated 2026–27 and 2027–28 changes.
The headline number is your net take-home pay after income tax, the Medicare levy, and any HECS or HELP repayments. The breakdown beneath shows where each line of the tax bill comes from, so you can see which inputs move which figures.
The Medicare levy is 2% of taxable income for most earners, with a shade-in for lower-income taxpayers below the family or individual threshold. The Medicare Levy Surcharge is separate — it applies to higher-income earners who don't hold an appropriate level of private hospital cover. The "No private health" toggle in the calculator triggers the surcharge calculation; tick it only if your situation matches.
HECS and HELP repayments are calculated against your repayment income, a slightly broader measure than taxable income that adds back reportable fringe benefits, salary-sacrificed super, investment losses, and exempt foreign income. Marginal repayment rates run from 1% at the lower threshold to 10% at the top, applied progressively across each band. The HECS paydown tracker shows year-by-year debt projection given current indexation.
This calc covers the standard pay-to-take-home journey for resident salaried workers. It does not capture:
For an authoritative withholding calculation, the ATO tax withheld calculator remains the reference. This calculator is designed to give a fuller picture across income tax, Medicare, HECS, salary sacrifice, and pay rises in one view.
Why is my marginal rate different from what my employer withholds?
Your employer uses PAYG withholding tables published by the ATO that approximate your annual tax bill on a per-pay-period basis. They're calibrated to your declared situation — TFN declaration, HECS, tax-free threshold claim — but they don't see your full income picture. At end of financial year, the gap between what was withheld and what's actually owed is settled by the ATO. Refunds or additional bills both happen.
Does salary sacrifice to super really save tax?
Yes, with conditions. Concessional super contributions are taxed at 15% inside the fund rather than at your marginal rate, which is the source of the saving. The concessional cap for 2025–26 is $30,000, including the 12% employer Super Guarantee. The salary sacrifice section in the calculator shows the dollar saving at your specific income, and warns if total contributions exceed the cap — exceeding it triggers excess contributions tax, which removes the benefit.
How do future tax years work in this calculator?
The tax year selector at the top runs from 2022–23 through 2027–28. Past years use the rates that actually applied. Future years use the rates currently legislated by the Treasury Laws Amendment Acts and announced in Budget Paper No. 2. Future-year rates may change if Parliament amends the law before the relevant year begins — when you pick a future year, a notice at the top of the calculator flags this. Use future years for forward planning, not as a guarantee.
For the longer-term consequences of how much you take home — what it compounds into over decades — try the compound calculator. To see how an extra dollar of salary sacrifice plays out against marginal tax rates, the salary sacrifice tax benefit guide walks through the maths with worked examples. For a full read on the Stage 3 changes by bracket, the Stage 3 tax cuts guide covers it across every salary level.