What are the current Australian tax brackets?

For 2024-25 (residents): $0-$18,200 = 0%, $18,201-$45,000 = 16%, $45,001-$135,000 = 30%, $135,001-$190,000 = 37%, $190,001+ = 45%. These reflect the Stage 3 tax cuts effective from 1 July 2024.

What's the difference between marginal and effective tax rate?

Your marginal rate is the tax rate on your LAST dollar earned (determines the bracket you're in). Your effective rate is total tax divided by total income — the average rate across all brackets. Someone earning $100,000 has a 30% marginal rate but only ~24% effective rate.

How do tax deductions work?

Deductions reduce your taxable income, not your tax dollar-for-dollar. A $1,000 deduction saves you $1,000 × your marginal rate. At the 30% bracket, a $1,000 deduction saves $300 in tax. Always claim legitimate work-related expenses.

Income Tax Calculator

Calculator

Calculate your Australian income tax for 2024-25 and 2025-26. See your tax bracket, Medicare levy, and take-home pay.

Free to useNo data storedAI insightsUpdated: February 2026

Understanding how much tax you owe is essential for financial planning. Australia uses a progressive tax system — you pay different rates on different portions of your income, not a single flat rate on all of it. The Stage 3 tax cuts (modified) took effect from 1 July 2024, reducing tax for most Australians. This calculator gives you a complete breakdown of your income tax, Medicare levy, HECS repayments, and actual take-home pay.

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Real-World Examples

Average Australian Salary

Alex earns $92,000/year (2024-25), is an Australian resident, has Medicare and no HECS debt.

Tax on $92,000: $4,288 (16% on $18,201-$45,000) + $14,100 (30% on $45,001-$92,000) = $18,388. Medicare levy: $1,840 (2%). Total tax: $20,228. Take-home: $71,772/year or $2,761/fortnight.

High Income Earner

Priya earns $180,000/year (2024-25), has Medicare, private health, and a HECS debt of $25,000.

Tax: $4,288 + $27,000 + $16,650 = $47,938. Medicare: $3,600. HECS (7.5%): $13,500. Total deductions: $65,038. Take-home: $114,962/year or $4,422/fortnight. Her effective tax rate is 36.1%.

Frequently Asked Questions

Glossary

Progressive Tax System

A tax system where higher income is taxed at higher rates. Australia has multiple tax brackets, and you only pay the higher rate on income within each bracket, not on your entire income.

Tax-Free Threshold

The first $18,200 of income for Australian residents that is not subject to tax. Non-residents do not receive this threshold.

Marginal Tax Rate

The tax rate applied to your last dollar of income. Determines how much tax you save from deductions and how much tax you pay on additional income.

Medicare Levy

A compulsory 2% levy on taxable income for Australian residents to fund the public healthcare system. Low-income earners may qualify for a reduction or exemption.

Related Tools

Tax Refund Estimator

Estimate how much you'll get back (or owe) at tax time.

Medicare Levy Calculator

Calculate your exact Medicare levy and surcharge obligations.

PAYG Withholding Calculator

Check if your employer is withholding the right amount of tax.

How to Use

1Enter your total annual taxable income (before tax, after deductions).
2Select the financial year you're calculating for.
3Choose your residency status — this affects your tax rates.
4Indicate whether you're subject to the Medicare levy.
5Select whether you have a HECS-HELP debt.
6Get a full breakdown of tax owed, Medicare levy, and net income.

Key Information

The tax-free threshold for Australian residents is $18,200 — you pay no tax on the first $18,200.
Stage 3 tax cuts (2024-25): 16% on $18,201-$45,000, 30% on $45,001-$135,000, 37% on $135,001-$190,000, 45% on $190,001+.
The Medicare levy is 2% of taxable income. The Medicare Levy Surcharge (1-1.5%) applies to high earners without private hospital cover.
LMITO (Low and Middle Income Tax Offset) ended after 2021-22. LITO (Low Income Tax Offset) of $700 still applies for incomes up to $66,667.

Pro Tips

Salary sacrifice into super to reduce your taxable income — contributions are taxed at 15% inside super vs your marginal rate.
Claim all eligible deductions: work from home expenses ($0.67/hour fixed rate), car expenses, professional subscriptions, tools/equipment.
If you earn under $37,000, consider making a $1,000 after-tax super contribution to get the $500 government co-contribution.
Prepay deductible expenses (income protection insurance, investment interest) before 30 June to bring deductions forward.

Avoid These Mistakes

Thinking you pay your marginal rate on ALL income — you only pay each rate on the portion within that bracket.
Forgetting to include investment income, rental income, and capital gains in your taxable income.
Not claiming the Low Income Tax Offset (LITO) — it applies automatically but many people don't know it exists.
Confusing gross income with taxable income — deductions reduce taxable income, which reduces tax.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026