Australia Tax Calculator
Calculate Australian PAYG tax and net income for any salary.
Reviewed by the ToolNestr Editorial Team — July 2026
How Australian PAYG tax works
Australia uses a progressive tax system with a tax-free threshold of $18,200. Income is taxed at increasing marginal rates across five brackets. The Pay As You Go (PAYG) system withholds tax from each paycheck. The Medicare Levy is an additional 2% charge that funds Australia's public healthcare system.
Worked example — $90,000 salary (2025-26, resident)
The first $18,200 is tax-free. The next $26,800 (up to $45,000) is taxed at 19% = $5,092. The remaining $45,000 (from $45,001 to $90,000) is taxed at 32.5% = $14,625, giving $19,717 income tax. The 2% Medicare Levy adds $1,800, so net income is roughly $90,000 − $19,717 − $1,800 = $68,483 a year (about $5,707 a month). That is an effective tax rate of about 23.9%, well below the 32.5% marginal rate — because only the income inside each bracket is taxed at that bracket's rate.
Figures illustrate the 2025-26 resident rates and exclude offsets such as LITO; use the calculator above for your exact salary and tax year.
Tips
- The tax-free threshold is available to Australian residents only — non-residents pay tax from the first dollar.
- High-income earners without private hospital insurance pay an additional Medicare Levy Surcharge (1-1.5%).
- Tax offsets like the Low Income Tax Offset (LITO) can reduce your tax bill further.
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Frequently asked questions
What are the 2025-26 Australian tax rates?
0% up to $18,200, 19% ($18,201-$45,000), 32.5% ($45,001-$135,000), 37% ($135,001-$190,000), 45% (above $190,000).
What is the Medicare Levy?
A 2% levy on taxable income that funds Australia's public healthcare system. Most residents pay it.
What is the tax-free threshold?
The first $18,200 of income is tax-free for Australian residents. Non-residents don't get this.
How often are tax brackets updated?
Tax brackets are typically updated each financial year (July 1) and may be indexed for inflation.
Sources & references
This tool uses standard formulas and reference values from:
- • Australian Taxation Office (ATO) — resident income tax rates, Medicare levy and thresholds. ato.gov.au
- • ATO PAYG withholding schedules for the relevant financial year.
Estimate only, not tax advice. Confirm current rates and your circumstances with the ATO or a registered tax agent.