Take-Home Pay in Australia
|Salary Before Tax|
|Salary After Tax||Enter salary|
Simply enter your annual or monthly income into the tax calculator above to find out how Australian taxes affect your income. You'll then get a breakdown of your total tax liability and take-home pay.
- Salary Before Tax
- your total earnings before any taxes have been deducted. Also known as Gross Income.
- Salary After Tax
- the money you take home after all taxes and contributions have been deducted. Also known as Net Income.
Income Tax Breakdown
|Low Income Tax Offset|
|Low and Middle Income Tax Offset|
|Total Tax Due||Enter salary|
- Total Tax Due
- the sum of all taxes and contributions that will be deducted from your gross salary.
The deductions used in the calculator assume you are not married and have no dependants. You may pay less if tax credits or other deductions apply.
Taxes in Australia
Our simple tax calculator estimates your take-home pay after deductions have been made from your total salary. This includes income tax and Medicare Levy payments. See the tables below to find out the Australian tax rates for the current year.
income tax is paid on all forms of personal income, including wages, business profits, and returns made from investments. Australia has a progressive tax system which means that you pay more tax as your income increases. This means you don't pay a flat rate of tax for all your earnings. Firstly, everyone can earn a certain amount of tax-free income known as a "tax-free threshold". For the 2020-2021 tax year, the first $18,200 you earn is tax-free. You'll then pay 19% on earnings between $18,201 and $45,000, 32.5% on earnings between $45,001 and $120,000, and 37% on earnings between $120,001 and $180,000. Anything you earn above $180,001 is taxed at 45%.
the Medicare levy is charged at 2% of your taxable income, and contributes to the costs of Australia's public health system (known as Medicare). This charge is applied in addition to any income tax you pay, although you may be entitled to a reduction or discount depending on your circumstances. You may also have to pay the Medicare levy surcharge (MLS) if your income is high enough and you, your spouse, or your dependent children aren't covered by an appropriate level of private patient hospital cover. You will not be liable to pay the MLS if you earn less than $90,000 per year (or $180,000 for families).
Superannuation (or just "super") is a compulsory system that requires Australians to put a minimum percentage of their income into a fund to support them through retirement. The money paid into your super is invested and the pot may grow over time. Most people will pay into their super via the Superannuation Guarantee ("SG"). This is an automatic salary deduction made by an employer, at the current rate of 9.5% of your annual salary.
tax offsets (also known as rebates) can reduce the amount of tax you pay on your taxable income. Two of the most common rebates are the low income tax offset (LITO) and the low and middle income tax offset (LMITO — casually known as the "Lamington"). These are worked out by the Australian Taxation Office after you lodge your tax return. Offsets can reduce the amount of tax you pay, but any surplus amount cannot be refunded to you. You'll usually be eligible for at least a partial offset if your taxable income totals $126,000 or less.
Student Loan Repayments
student loan repayments apply differently depending on which scheme you used to finance your education. Compulsory repayments begin for the Higher Education Loan Program (HELP) and other schemes once your income exceeds the minimum repayment threshold. Repayment income is calculated based on your taxable income, any reported fringe benefits, and superannuation contributions amongst other things.
Australia Tax Rates for 2020 – 2021
|Australian Income Tax|
|Taxable Income||Rate Applied||Tax Payable|
|$0 to $18,200||0%||$0|
|$18,201 to $45,000||19%||19 cents for each $1 over $18,200|
|$45,001 to $120,000||32.5%||$5,092 plus 32.5 cents for each $1 over $45,000|
|$120,001 to $180,000||37%||$29,467 plus 37 cents for each $1 over $120,000|
|$180,000 or more||45%||$51,667 plus 45 cents for each $1 over $180,000|
|Australian Medicare Levy|
|Taxable Income||Rate Applied|
|$0 to $22,801||0%|
|$22,802 to $28,500||10% with potential for part reduction|
|$28,501 or more||2%|
|Low Income Tax Offset (LITO)|
|Taxable Income||Reduction Available|
|$37,500 or less||$700|
|$37,501 to $45,000||$700 minus 5 cents for every $1 above $37,500|
|$45,001 to $66,667||$325 minus 1.5 cents for every $1 above $45,000|
|$66,668 or more||$0|
|Low and Middle Income Tax Offset (LMITO)|
|Taxable Income||Reduction Available|
|$37,000 or less||$255|
|$37,001 to $48,000||$255 plus 7.5 cents for every dollar above $37,000 up to a maximum of $1,080|
|$48,001 to $90,000||$1,080|
|$90,001 to $126,000||$1,080 minus 3 cents for every dollar of the amount above $90,000|
These are the tax rates for Australian residents and do not apply to other taxpayers in the country (including working holiday makers). The rates and reductions that apply to you will depend on your circumstances. For the sake of simplicity, our Australia tax calculator assumes that you are a single Australian resident with no dependents.
How to Manage Your Tax in Australia
How your tax payments are handled will depend on your employment status. The below sections explain how tax is managed and collected for most Australians.
Australian Tax Return
taxpayers can lodge their return with the Australian Tax Office (ATO) any time after 30 June and must do so by no later than the self-lodgement deadline of 31 October. You will need to lodge a tax return if you have had tax withheld from any payments made to you during the income year, are an Australian resident with a taxable income of more than $18,200, or if you wish to claim any tax deductions. You do not need to lodge an Australian tax return if you are a working holiday maker with an annual taxable income of less than $45,001.
Pay-As-You-Go (PAYG) Tax
while Australian taxation is based on a self-assessment model, the pay-as-you-go (PAYG) withholding tax regime means that many employers deduct an amount from their employees' salary payments in lieu of tax liabilities. The amount withheld will roughly equate to each employee's tax liability, and should be remitted to the ATO.
The Australian tax year runs from 1 July to 30 June, and individuals must usually lodge their tax return by 31 October. You can submit your Australian tax return by filing a paper form or lodging online using myTax.
What is the Average Income in Australia?
The median monthly household income in Australia is $7,391.25 before tax and other deductions. This works out to a salary of $88,695 per year — although it's important to remember that this counts for households, not individuals. 50% of people also earn less than this figure, and the statistics only include those people who earn enough to pay income tax.
Most taxpayers tend to be paid an annual salary, and all employees should earn a minimum wage that's set based on their industry or occupation. The current Australian National Minimum Wage is $19.84 per hour. Full-time workers usually work 38 hours or more per week. This means that a full-time worker on minimum wage could expect their pre-tax earnings to total $753.80 per week, $3,266.46 per month, or $39,197.60 per year.
These figures put Australia 3rd in the International Labour Organisation's 2018 ranking of the highest minimum wage by country.
Australia is a large country with six states and a diverse workforce. While its immigration system can be hard to navigate, the country attracts many so-called working holiday makers. Australia's capital city of Canberra has a thriving construction sector with many jobs also available in the Australian Defence Force. The famous city of Sydney is also a popular destination for workers, and it only ranks as the 66th most expensive global city to live in according to the Mercer 2020 Cost of Living Survey.
With a well-renowned trades industry and new opportunities in sectors such as professional services and renewable energy, residents of Australia enjoy a good quality of life which ranks consistently highly in polls.