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Australian Income Tax Calculator

Name: Australian Income Tax Calculator
Creator: Savvy
Published: 2022-01-14T10:12:04+10:30

Determine how much income tax you’ll pay and calculate your weekly net income with Savvy’s income tax calculator.

Written by , updated on September 13th, 2023

Calculate your income tax

If you’re about to apply for a loan, are preparing information for your tax return, or are planning your household budget for the next financial year, it’s vital to know how much income tax you’ll pay. Use Savvy’s income tax calculator to more accurately determine the amount of tax you’ll be paying this financial year.

All about income tax, deductions and offsets

The Australian income tax calculator is easy to use. Simply enter your annual gross income into the box. Click the green ‘yes’ button to add the Medicare Levy (which your employer will automatically deduct), and the calculator results will show what your annual and weekly net (take-home) pay will be and how much tax you’ll pay annually.

What are the income tax thresholds for the 2022-23 financial year?

These are the income tax payment thresholds for Australian residents for the current 2022–23 financial year:

Taxable Income	Tax Payable on this Income
Up to $18,200	Nil
$18,201 - $45,000	19c for each $1 over $18,200
$45,001 - $120,000	$5,092 plus 32.5c for each $1 over $45,000
$120,001 - $180,000	$29,467 plus 37c for each $1 over $120,000
$180,001 and over	$51,667 plus 45c for each $1 over $180,000

*These rates do not include the Medicare levy of 2%

The net income calculator will automatically calculate how much income tax you’ll pay taking these tax thresholds into account.

Does the income tax I have to pay vary depending on my employment status?

No – the income tax you’ll be required to pay in Australia does not depend on your employment status, so it makes no difference whether you’re full-time, part-time, casual, self-employed or a sole trader.

If you’re an employee, your employer will deduct the Medicare levy and superannuation from your pay and send these taxes to the Australian government on your behalf. If you are self-employed, you will have to make these payments to the Australian Tax Office (ATO) yourself.

Factors affecting your income tax:

Residency

If you're an Australian resident for tax purposes, you must pay income tax on all income you earn in that tax year, regardless of whether you’ve already paid tax on some of the income you’ve earned in another country. However, if this is the case, you may be entitled to a foreign income tax offset (if some of your income was earned from another country).

Family structure

Each person in Australia must submit their own tax return. There are various tax filing statuses such as single, head of household, married (filing jointly), married (filing separately), and widow(er). Your tax advisor will tell you which filing status applies to your personal situation.

If you are married or in a de facto relationship, you must include some tax information from your partner on your tax return, and the amount of tax you pay may be affected by couple thresholds on items such as the Medicare Levy, private health insurance rebates, childcare payments and family tax benefits.

Age

Young people under the age of 18 who are working either part-time or full-time generally pay the same individual income tax as an adult. If you’re aged under 18, and a student earning an income, you’ll be eligible to claim study expenses as a tax deduction.

Once you reach 66 years of age and are eligible to receive the aged pension, you may also be entitled to an income tax rebate known as SAPTO, the Seniors and Pensioners Tax Offset.

Your easy guide to pay deductions

How is the Superannuation Guarantee calculated?

All employers in Australia are obliged to make a contribution to an employee’s superannuation fund. This compulsory contribution was introduced in 1992, and is known as the Superannuation Guarantee (or SG). The contribution is based on a percentage of your salary or remuneration package and is set to gradually increase over the next few years.

There are a few exceptions to the compulsory requirement for employers to make superannuation contributions:

if you're paid less than $450 a month, a super contribution does not have to be paid for that month
if you’re a worker under 18 years old and employed for less than 30 hours per week
if you’re usually a non-resident and are being paid for work done outside Australia

From 1 July 2014 until 30 June 2021, the SG rate was 9.5%. This increased to 10% from 1 July 2021 and will increase in 0.5% increments from 1 July 2022 onwards, up to a maximum of 12% from 1 July 2025. See the chart below for the SG’s incremental increases:

Time Period	Superannuation Guarantee Rate
1 July 2022 to 30 June 2023	10.5%
1 July 2023 to 30 June 2024	11%
1 July 2024 to 30 June 2025	11.5%
From 1 July 2025	12%

Voluntary superannuation contributions

In addition to the SG, it's possible to make additional voluntary contributions to your superannuation fund. As of 1^st July 2021, the total amount you’re permitted to voluntarily contribute to your Australian superannuation fund (on top of your employer’s 10% contribution) was raised from $25,000 to $27,500 per annum.

How will changes to Australian superannuation rules affect me?

As the SG increases, so does the amount your employer contributes to your super fund – but your net pay will remain the same.

For example, if you normally earn $2,000 gross pay a fortnight, and your employer is paying the SG at a rate of 10%, the super contribution would be $200 a fortnight. If the SG rate increases to 12%, your employer’s contribution increases to $240 a fortnight, but your gross pay remains $2,000.

HECS/HELP Repayments

Australian residents wishing to attend university or gain other forms of higher education are entitled to government assistance to help defer payment for the cost of their education.

Introduced in 1989, the scheme works by loaning students the course fees for their chosen study. When students have gained their qualification, and are earning a sufficient income, they gradually pay back their loan.

HECS-HELP debts can amount to tens of thousands of dollars, and employers are obliged to collect HECS-HELP payments from the pre-tax salary of eligible former students until the debt is repaid.

There is a lifetime cap on the HECS-HELP debt (known as the HELP loan limit) of $109,206, or $156,847 for medicine, dentistry, veterinary and aviation courses (figures current for 2022-2023).

Similar assistance packages are known as FEE-HELP (assistance for full fee-paying students to pay their tuition fees), OS-HELP (assisting students wishing to study overseas) and VET FEE-HELP (assisting students pay tuition fees for vocational education and training) which was replaced in 2017 with VET Student Loans.

There is a compulsory earning threshold of $48,361, after which all these types of student debt have to be repaid. The percentage repayment rate is based on salary, according to the following rate table:

HECS-HELP Repayment Threshold

2022-2023 repayment threshold	Repayment % of salary
Under $48,361	N/A
$48,361 to $55,836	1.0%
$55,837 to $59,186	2.0%
$59,187 to $62,738	2.5%
$62,739 to $66,502	3.0%
$66,503 to $70,492	3.5%
$70,493 to $74,722	4.0%
$74,723 to $79,206	4.5%
$79,207 to $83,958	5.0%
$83,959 to $88,996	5.5%
$88,997 to $94,336	6.0%
$94,337 to $99,996	6.5%
$99,997 to $105,996	7.0%
$105,997 to $112,355	7.5%
$112,356 to $119,097	8.0%
$119,098 to $126,243	8.5%
$126,244 to $133,818	9.0%
$133,819 to $141,847	9.5%
Over $141,848	10.0%

Salary sacrifice

Salary sacrifice is an arrangement where your employer takes money out of your pre-tax salary to pay debts or loans, or to make additional voluntary contributions to your superannuation account. This arrangement can have substantial tax benefits as it reduces your taxable income.

One common form of salary sacrifice in Australia is used by employees to buy a car using their pre-tax salary, which is known as novated car leasing. Under this arrangement, the employee agrees to lease a car with a third-party financing company for a set period and their employer deducts the car lease costs (including vehicle maintenance and servicing) from the employee’s pre-tax salary. The employee then purchases the car at the conclusion of their lease term.

Salary sacrificing to buy a car means that no GST is paid on the price of the car, and additional savings are made by reducing the amount of income tax paid.

Child support payments

Employees who are separated and are required to pay child support to their spouse can have their child support payments deducted from their net pay (if they have not made other private arrangements to pay their child support).

Such deductions are paid by the employer to Services Australia, which is the Federal government department that manages child support payments.

The Medicare Levy

What is the Medicare Levy?

The Medicare Levy is set at 2% of your taxable income and is paid in addition to income tax. It helps fund Australia’s public health system and provide free or subsidised health care for all residents. This levy is taken out of your pay by your employer at the same time as income tax.

If you’re entitled to a Medicare Levy rebate or reduction, you’re able to claim these when you submit your tax return.

What is the Medicare Levy Surcharge (MLS)?

The Medicare Levy Surcharge is an additional medical levy you are required to pay if you earn over a set amount and don’t have the appropriate level of private health insurance. It aims to encourage those who can afford it to take out private health insurance. The levy is based on income and is between 1% and 1.5% of MLS taxable income.

In the 2021-2022 financial year the earning threshold under which you don’t have to pay the MLS is:

$90,000 for singles
$180,000 (plus $1,500 for each dependent child after the first one) for families

What are the Medicare Levy Surcharge income brackets?

This is how much MLS you will pay according to your income:

Threshold	Base tier	Tier 1	Tier 2	Tier 3
Single threshold	$90,000 or less	$90,001 – $105,000	$105,001 – $140,000	$140,001 or more
Family threshold	$180,000 or less	$180,001 – $210,000	$210,001 – $280,000	$280,001 or more
Medicare levy surcharge	0%	1%	1.25%	1.5%

The family income threshold is increased by $1,500 for each MLS dependent child after the first child.

Tax Deductions

Allowable tax deductions

The Australian Taxation Office (ATO) allows you to claim as tax deductions certain expenses you’ve incurred in order to earn your income. These expenses must fulfil the following criteria:

You must have spent the money yourself and have not been reimbursed
The expenses must directly relate to earning your income
You must have a receipt to prove it

There are several categories of expenses you’re entitled to claim as a tax deduction. These include:

Motor vehicle and car expenses (if you use your own vehicle to earn your income)
Travel expenses (if you are required to travel away from home overnight for work)
Clothing, laundry and dry-cleaning expenses (for occupation-specific clothing, protective clothing and uniforms)
Self-education expenses (if the education relates directly to your current employment activities, and is over $250)
Other work-related expenses (such as working from home, tools and equipment and union subscriptions or memberships)
Other non-work-related expenses (such as charity donations, the cost of preparing your tax return and income protection insurance)

Capital Gains Tax (CGT)

If you buy property, shares or any other assets and sell them for a profit, you’ll be liable to pay Capital Gains Tax (CGT). The amount of capital gain you make will be added on to your usual income and you’ll have to pay tax on that amount at your nominal tax rate. If your investment makes a loss, you are able to claim the capital loss as a tax deduction, and carry this loss forward in future years.

Capital gain is also time dependant. If you’ve owned the asset for more than 12 months, you’re entitled to a 50% reduction in the capital gain, meaning you only have to pay tax on 50% of the gain, rather than 100% of it.

Frequently asked questions on income tax in Australia

How long will it take to get my tax refund back?

That will depend on when you file your tax return. If you file it very shortly after the financial year ends on 30^th June, you can expect a delay of up to 2-3 weeks. Tax returns submitted after the busiest time of year may be confirmed within a week. However, these can vary widely, so you may find it takes less or more time overall. You have until the 31^st October each year to complete your tax return.

Who is exempt from paying the Medicare Levy?

You do not pay the Medicare Levy if your income is equal to or less than $22,801. If your income is between $22,802 and $28,501 (or $45,069 if entitled to the seniors and pensioners tax offset) you qualify for a reduced rate. In addition, if you’re a single parent or are entitled to an invalid carer tax offset, you will also pay a reduced Medicare Levy.

How will Fringe Benefits Tax (FBT) affect my income tax?

FBT is paid by employers on certain benefits they provide to their employees, so it won’t affect you if you’re an employee. FBT is separate to income tax and is calculated on the taxable value of the fringe benefit provided. Examples of fringe benefits include a company allowing an employee to use a company vehicle for personal use or various salary sacrifice arrangements where an employer provides a benefit to the employee (such as a novated car lease).

What is the Seniors and Pensioners Tax Offset (SAPTO)?

The Seniors and Pensioners Tax Offset (SAPTO) is a tax reduction which is available for senior Australians who are eligible for the government age or service pension, and who earn less than less than $50,119 (for a single person) or $83,580 for a couple (2021-2022 figures).

Who is eligible for SAPTO?

You have to be 66 years old or older on June 30 to receive the government aged pension, and 60 years old or older for a pension, allowance or benefit from Veterans' Affairs.

How do Centrelink payments affect the income tax I have to pay?

Centrelink payments you receive are treated in the same way as any other income you receive for taxation purposes, so you have to declare it on your tax return and, if appropriate, pay income tax on it.

Can I ask my employer not to deduct the Medicare Levy?

No – everyone must pay the Medicare Levy, but if you’re eligible for a reduction or a rebate, you can claim it back from the tax office at the end of the financial year when you submit your tax return.

When I apply for a loan, do lenders look at my gross income or my net income?

Lenders are most interested in how much ‘disposable income’ you have available, which is defined as money you have available to spend after income tax has been paid. If you have other debts such as car or personal loans, this will reduce your disposable income as far as lenders are concerned.