Start with the salary figure your employer actually quoted

An Australian job offer can describe the same remuneration in two very different ways. “$85,000 plus super” normally means the whole $85,000 is salary and the employer contributes compulsory super separately. “$85,000 package including super” means the super contribution comes out of that headline figure. The second offer therefore produces a lower taxable salary and lower cash pay, even though both advertisements feature the same number. Use the selector above before comparing roles or negotiating a raise.

Salary plus super

When super is on top, the calculator treats the amount entered as taxable employment salary. At the general 12% super guarantee rate for 2026–27, an $85,000 salary produces an indicative $10,200 employer contribution, making the combined salary-and-super value $95,200. The cash estimate subtracts income tax and the Medicare levy from $85,000; it does not subtract the employer contribution because that money is paid to super rather than taken from the salary.

Total package including super

For a package that includes compulsory super, the tool divides the package by 1.12 to estimate the salary component and assigns the balance to super. A $112,000 package therefore separates into approximately $100,000 salary and $12,000 employer super. Real contracts may include bonuses, allowances, insurance, parking or other benefits inside the package, so read the remuneration schedule rather than assuming every dollar outside salary is super.

Super timing changed from 1 July 2026. The estimate displays the annual contribution at 12%. It does not predict the date on which each contribution reaches your fund, and it does not apply an award rate above the statutory minimum or the maximum contribution base. Ordinary employment earnings and the amount used for super can also differ when overtime, bonuses or allowances are involved.

How 2026–27 tax turns gross salary into take-home pay

The income tax estimate uses the legislated resident rates for the Australian financial year from 1 July 2026 to 30 June 2027. The first $18,200 is tax free. The part from $18,201 to $45,000 is taxed at 15%, the part from $45,001 to $135,000 at 30%, the part from $135,001 to $190,000 at 37%, and any amount over $190,000 at 45%. These are marginal bands: moving into a higher band never causes all earlier income to be taxed at the higher percentage.

Low Income Tax Offset

The tool applies the Low Income Tax Offset to resident taxable income. The maximum $700 offset applies up to $37,500. It then falls by 5 cents for every dollar from $37,501 to $45,000, and from $45,001 it falls from $325 by 1.5 cents per dollar until it reaches zero at $66,667. LITO can reduce income tax to zero but cannot create a cash payment by itself. That distinction matters when checking a low-income estimate.

Medicare levy used here

For the standard individual option, no levy is applied at or below $28,011. Between $28,011 and $35,013, it phases in at 10 cents for each dollar above the lower threshold. At $35,013 or more, the estimate uses 2% of taxable income. These are the ordinary individual parameters in the 2026 withholding instrument. A spouse, dependent children, Seniors and Pensioners Tax Offset eligibility, partial-year residency or a partial Medicare exemption can change the amount, which is why the calculator also offers a full-exemption switch but does not pretend to resolve every family threshold.

Use the pay-cycle figures to judge an offer or pay rise

Annual net pay is useful for long-term planning, but rent, mortgage payments and groceries arrive on shorter cycles. The calculator divides annual take-home pay by 12, 26 and 52 without rounding the annual calculation first. An employer’s PAYG withholding can differ by a few dollars because payroll tables work with each payment, round withholding amounts and later reconcile the total through the tax return.

Example: $85,000 salary plus super

For an Australian resident using the standard individual Medicare settings, the tax before offsets is $16,020 and LITO is no longer available at this income. The Medicare levy is $1,700, leaving estimated annual take-home pay of $67,280. That corresponds to about $5,606.67 per month, $2,587.69 per fortnight or $1,293.85 per week. The separate 12% employer super estimate is $10,200. A payroll deposit may vary because this example has no HELP debt, salary sacrifice, deductions, allowances, overtime or Medicare levy surcharge.

Example: $42,000 salary plus super

The first tax band produces $3,570 before offsets. LITO is $475 at this income, so estimated income tax falls to $3,095. The full 2% Medicare levy is $840 because taxable income is above the ordinary phase-in ceiling. Estimated take-home pay is therefore $38,065 a year, or about $732.02 a week. This example shows why simply multiplying the whole salary by a headline tax rate gives the wrong answer: the tax-free threshold and offset materially change the outcome.

Compare the net increase, not just the headline raise

If salary rises from $85,000 to $90,000, the extra $5,000 sits in the 30% marginal band and also attracts the 2% Medicare levy under the assumptions used here. The approximate cash increase is therefore $3,400 a year before any other consequences, not the full $5,000. That is still a real gain. It simply means the better budgeting number is about $130.77 extra per fortnight. If the new offer is a total package, first check whether the old and new figures use the same super basis.

What to check before treating the estimate as a payslip forecast

This page estimates annual resident income tax, ordinary individual Medicare levy and LITO from one salary figure. It does not calculate the Medicare Levy Surcharge, HELP or other study-loan repayments, reportable fringe benefits, child support deductions, salary-sacrificed super, union fees, novated lease deductions, tax-deductible work expenses, foreign income or offsets other than LITO. Enter taxable salary rather than household income, turnover or an amount after deductions.

PAYG withholding is a prepayment collected through payroll, while annual income tax is settled after the financial year. A worker with two jobs may have too little withheld if the tax-free threshold is claimed twice, or more withheld than the final assessment if payroll settings are conservative. Bonuses and irregular payments can also use separate withholding schedules. The annual estimate is therefore best used to understand the likely destination, then compared with the year-to-date figures on the income statement.

Salary packaging can change both cash flow and the income measures used for other systems. A pre-tax deduction may reduce taxable salary but still be reportable for Medicare levy surcharge, HELP, family assistance or child support purposes. Likewise, the employer’s super obligation is based on qualifying earnings rather than every payment that appears on a payslip. If an employment contract contains commissions, restricted shares, living-away-from-home allowances or fringe benefits, separate those items before relying on a single salary number.