AUSTRALIA PAY CALCULATOR METHODOLOGY
This page explains the methodolody assumptions, rates and logic used by the pay calculator Australia. It’s updated for the 2025–26 income year.
Pay Calculator Australia includes
- Personal income tax using ATO resident rates for 2025–26 (Medicare levy calculated separately).
- Medicare levy (2%) applied to taxable income (with low-income reductions when eligible).
- Low Income Tax Offset (LITO) where applicable.
- Superannuation at the current Superannuation Guarantee (default 12%).
- Optional inputs: bonus, overtime, and novated lease (salary sacrifice) impacting taxable income.
We do not include HELP/HECS, Medicare Levy Surcharge (MLS) or private health rebates by default.
Key assumptions
- Resident for tax purposes with the tax-free threshold applied.
- Pay-cycle conversions: weekly ×52, fortnightly ×26, monthly ×12.
- Bonuses and overtime are assessable in the year they are received.
- Novated lease / salary sacrifice reduces taxable income (pre-tax). FBT rules can apply based on vehicle/benefit type.
- Superannuation SG is an employer contribution (on top of wages) unless you model employee contributions.
- Figures are displayed to cents; calculations use higher internal precision.
Current rates used (FY 2025–26)
Resident income tax rates (exclude Medicare levy)
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 + 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 + 45c for each $1 over $190,000 |
Source: ATO — individual tax rates.
Low Income Tax Offset (LITO)
- Up to $700 if taxable income ≤ $37,500.
- Then $700 − 5c per $1 from $37,500 to $45,000.
- Then $325 − 1.5c per $1 from $45,000 to $66,667.
- No LITO above $66,667.
Source: ATO — Low Income Tax Offset.
Medicare levy
- Calculated at 2% of taxable income.
- Low-income thresholds and reductions vary by family status; we apply the current-year ATO thresholds when available.
Source: ATO — Medicare levy.
Superannuation (SG)
- Super Guarantee rate: 12% from 1 July 2025 (editable in the calculator).
Source: ATO — Super Guarantee percentage.
Medicare Levy Surcharge (MLS)
Not included by default (1–1.5% if you exceed MLS thresholds without appropriate private hospital cover). Check the ATO tables if relevant.
Source: ATO — MLS thresholds & rates.
Worked examples
Example 1 — Base salary $90,000
- Income tax: $4,288 + 30% × ($90,000 − $45,000) = $17,788
- LITO: $0 (income above LITO range)
- Medicare levy (2%): $1,800
- Net (before other deductions): $70,412
- Super (12% employer): $10,800
Example 2 — $90,000 + $5,000 bonus = $95,000 taxable
- Income tax: $19,288
- Medicare levy (2%): $1,900
- Net (before other deductions): $73,812
Example 3 — $90,000 with $6,000 novated lease (salary sacrifice)
- Taxable income becomes $84,000.
- Income tax: $15,988; Medicare levy: $1,680.
- Estimated tax saving on the $6,000 sacrifice ≈ marginal 30% + levy 2% = ~32% (≈ $1,920 vs post-tax payment).
Examples exclude MLS, HELP/HECS, rebates and any FBT impacts in specific packages.
Change log
- 21 Aug 2025 — Updated to ATO resident rates for FY 2025–26; SG set to 12% from 1 Jul 2025; Medicare levy note refreshed.
- 1 Jul 2024 — Adopted revised brackets (16% / 30% / 37% / 45%).