Understanding how much tax you'll pay is the first step to knowing your real take-home pay. Australia's tax system is progressive — the more you earn, the higher your marginal rate. But it's not as simple as applying one percentage to your entire salary. The 2026–27 financial year brings slightly adjusted brackets, and there are several offsets, levies, and repayment obligations that affect your final number.
For Australian residents, the tax-free threshold remains at $18,200. From there:
These are marginal rates — you only pay each rate on the portion of your income in that bracket. Someone earning $95,000 doesn't pay 30% on the whole amount. They pay 0% on the first $18,200, 15% on the next $26,800, and 30% on the remaining $50,000. The resulting income tax is $19,020 before any applicable offsets.
Most Australian taxpayers pay a 2% Medicare levy on their taxable income to help fund the public health system. For a single taxpayer in 2026–27, no levy is payable at or below $28,011; it shades in at 10 cents per dollar above that amount until the ordinary 2% levy applies from $35,013. Some individuals — such as those not eligible for Medicare — can apply for a full or half exemption certificate from Services Australia.
If you have a HECS-HELP debt, compulsory repayments start when your repayment income exceeds $69,528 in 2026–27. The marginal system charges 15 cents per dollar above $69,528, plus 17 cents per dollar above $129,717, capped at 10% of total repayment income. HELP repayments are calculated on your repayment income, which can include reportable fringe benefits and investment losses added back — so your actual repayment may differ from a taxable-income-only estimate.
The Low Income Tax Offset (LITO) provides up to $700 of tax relief. The full $700 applies up to $37,500, reduces by 5 cents per dollar to $325 at $45,000, then reduces by 1.5 cents per dollar and reaches zero at $66,667. The old Low and Middle Income Tax Offset (LMITO) ended on 30 June 2022 and no longer applies.
Non-residents for tax purposes face different rates: 30% from the first dollar up to $135,000, 37% from $135,001 to $190,000, and 45% above. There is no tax-free threshold and no LITO. Non-residents generally do not pay the Medicare levy.
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