Income Tax Calculator Australia
Estimate Australian income tax for 2026–27 and see how much of your taxable income falls into each marginal band. Resident, foreign resident and working holiday maker scales are kept separate so the result does not quietly apply the tax-free threshold to the wrong status.
Choose the tax scale
The tax bands and effective rate will appear below.
| Band used | Income in band | Rate | Tax |
|---|---|---|---|
| Calculate to populate the band breakdown. | |||
Taxable income is the number the rate table acts on
Australian income tax is not normally calculated from the amount deposited into a bank account. It starts with assessable income and then subtracts allowable deductions to reach taxable income. Salary and wages, bank interest, net business income, rent and investment distributions can all contribute to assessable income. Deductions depend on what produced that income and must satisfy their own rules. Entering turnover, a property’s gross rent or salary after payroll withholding will produce a misleading estimate.
Residency changes the first dollar of tax
An Australian resident for tax purposes can use the $18,200 tax-free threshold and the resident marginal bands. A foreign resident generally pays 30% from the first dollar up to $135,000 under the scale used here and does not pay the Medicare levy. A working holiday maker uses a separate 15% rate on working holiday taxable income up to $45,000, then the higher bands. Visa type, nationality and the tax residency tests can interact, so choose the status that applies to the income being assessed rather than the label that feels closest.
Annual liability and PAYG withholding answer different questions
This calculator estimates the liability created by taxable income. PAYG withholding is money collected during the year and credited against that liability. A refund occurs only when credits and refundable amounts exceed the final assessment; tax may be payable when withholding is short. Because this page has no withholding field, a figure of $12,920 means estimated tax and levy for the year, not an expected refund or an amount that must be paid again.
The 2026–27 resident bands tax slices, not the whole income
From 1 July 2026, the lowest resident rate is 15%. Income from $45,001 to $135,000 is taxed at 30%, income from $135,001 to $190,000 at 37%, and income above $190,000 at 45%. The row breakdown in the result area exposes the slice inside each band. It prevents the common mistake of multiplying the full income by the highest rate reached.
Resident tax before offsets = sum of each taxable band slice × that band’s rate.
Example: a resident with $70,000 taxable income
The first $18,200 contributes no income tax. The next $26,800, which fills the band to $45,000, contributes $4,020 at 15%. The final $25,000 contributes $7,500 at 30%. Basic income tax is therefore $11,520. This income is above the LITO ceiling, and the standard Medicare levy is $1,400, producing a combined estimate of $12,920. The effective tax-and-levy rate is about 18.46%, well below the 30% marginal rate because the earlier slices are taxed more lightly.
Example: a resident with $40,000 taxable income
The 15% band produces $3,270 before offsets. LITO is $575 because income is $2,500 above $37,500 and the offset reduces by 5 cents for each of those dollars. Income tax after LITO becomes $2,695. At the ordinary individual Medicare settings, taxable income is above the phase-in ceiling and the levy is $800. The combined estimate is $3,495, leaving $36,505 before any other liabilities or credits. A flat 15% calculation would overstate the tax because it would ignore both the tax-free threshold and LITO.
Offsets and Medicare are applied after the band calculation
For residents, the Low Income Tax Offset can reduce basic income tax but cannot make that component negative. It is $700 when taxable income does not exceed $37,500. It reduces to $325 across the next income range and then tapers to zero at $66,667. The result table shows tax generated by bands; the headline income-tax metric shows the amount after LITO. Keeping those views separate makes the offset visible without pretending it changed the marginal rate table.
Ordinary individual Medicare thresholds
The standard option follows the 2026 withholding instrument’s ordinary individual parameters: no levy at or below $28,011, a 10% phase-in on the excess until $35,013, then 2% of taxable income. The calculator does not apply a family reduction, additional-child amount, Seniors and Pensioners Tax Offset threshold or half exemption. Use the full-exemption option only when the underlying eligibility has already been established.
Items deliberately kept outside this estimate
The Medicare Levy Surcharge is different from the ordinary levy and depends on income for surcharge purposes, family circumstances and appropriate private hospital cover. Study and training support loan repayments use repayment income and separate annual schedules. Capital gains may receive concessions or have cost-base adjustments before they enter taxable income. Franked dividends involve gross-up and franking credits. Foreign income may bring a foreign income tax offset. These items should be calculated from their own inputs rather than hidden behind a general tax percentage.
Use the breakdown to find the assumption that needs checking
If the estimate differs from an accountant’s projection or an ATO assessment, compare the input definition first. Check whether deductions have already been subtracted, whether a taxable capital gain or reportable distribution is missing, and whether the chosen residency scale covers the full year. Next compare offsets, Medicare circumstances and credits. Re-running the same gross income through another generic calculator will not resolve a difference caused by an omitted rule.
For budgeting, the after-tax income shown by the blue share is more useful than the marginal rate alone. For planning a deduction, calculate the change in liability between two complete taxable-income scenarios; do not assume a $1,000 deduction creates a $1,000 refund. At a 30% marginal income-tax rate it may reduce basic income tax by about $300, subject to offsets, Medicare interactions and whether the expense is actually deductible.
For a foreign resident or working holiday maker, confirm that the income belongs under the selected scale and whether a treaty or residency outcome changes the treatment. The working holiday maker scale is specifically about working holiday taxable income. Other Australian-sourced income can require different handling. When residency changes during the year, the tax-free threshold can be apportioned and a single full-year selector is not enough.
Keep the income year and rounding method attached to the number
A tax estimate is meaningful only with its financial year. The 2026–27 scale applies to income from 1 July 2026 through 30 June 2027; it should not be substituted into an earlier return simply because that return is lodged during 2026. This page keeps cents through the annual calculation and formats the final amounts to cents. Payroll withholding works from payment-period schedules and usually rounds the amount withheld, so the sum shown on an income statement can differ slightly from an annual model even when both use the right rules. The assessment reconciles credits, offsets and the final taxable income rather than forcing every payslip to reproduce the annual result exactly.
Australian income tax questions
Will earning one dollar over $45,000 make all my income taxable at 30%?
No. Only the slice above $45,000 enters the 30% band. The tax-free slice and the 15% slice keep their original treatment. The band table in the calculator shows the small additional slice and its tax separately.
Do I subtract work deductions before entering income?
Enter taxable income after allowable deductions when you are estimating the final annual liability. Do not subtract an expense merely because you paid it; it must meet the relevant deduction rule and any substantiation requirement. If eligibility is uncertain, compare a no-deduction scenario with a supported-deduction scenario.
Why does the foreign resident result show no Medicare levy?
Foreign residents generally do not pay the Medicare levy, so this estimator applies none to that scale. That does not decide tax residency or entitlement to Medicare services. If residency changed during the year, a full tax-return calculation is needed.
Can unused LITO increase my refund beyond the tax I owed?
LITO is non-refundable. It can reduce basic income tax to zero, but an unused portion does not become a separate payment. A refund can still arise from PAYG credits or refundable items, which this liability calculator does not collect.
Is the Medicare Levy Surcharge included in the orange tax share?
No. The orange share includes income tax after LITO and the ordinary Medicare levy selected here. MLS needs private hospital cover, income for surcharge purposes and family-threshold inputs, so it is intentionally excluded instead of being guessed from taxable income alone.