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Summary
The Australian take-home pay calculator converts a gross annual salary into net pay after all statutory deductions: income tax (with Low Income Tax Offset), Medicare Levy, Medicare Levy Surcharge (if no private hospital cover), and HECS-HELP student debt repayments. The Super Guarantee (12% in 2025-26) is shown as informational context - it is paid by your employer on top of your salary, not deducted from it.
How it works
Australian take-home pay is calculated as:
Gross salary − Income Tax (net of LITO) − Medicare Levy − Medicare Levy Surcharge − HECS-HELP repayment = Net pay
Step 1: Income Tax
Income tax uses a progressive band system for the 2025-26 financial year (1 July 2025 – 30 June 2026):
| Taxable income | Rate |
|---|---|
| $0 – $18,200 | 0% (tax-free threshold) |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
Each rate applies only to income within that band, not the entire salary.
Step 2: Low Income Tax Offset (LITO)
The LITO reduces income tax payable (it is an offset, not a deduction from income):
| Taxable income | LITO |
|---|---|
| $0 – $37,500 | $700 (full offset) |
| $37,501 – $45,000 | $700 − (income − $37,500) × 0.05 |
| $45,001 – $66,667 | $325 − (income − $45,000) × 0.015 |
| $66,668+ | $0 |
Net income tax = max(0, income tax − LITO). The LITO ensures workers earning below ~$24,000 pay no income tax.
Step 3: Medicare Levy
A 2% levy funds Australia’s public health system (Medicare). A low-income exemption applies:
- Income ≤ $27,222: no Medicare Levy
- $27,222 – $34,027: phase-in at 10¢ per $1 above threshold
- $34,027+: full 2% of taxable income
Step 4: Medicare Levy Surcharge (MLS)
Singles without adequate private hospital cover pay an additional surcharge on their entire income:
| Income | MLS rate |
|---|---|
| ≤ $97,000 | 0% |
| $97,001 – $113,000 | 1.0% |
| $113,001 – $151,000 | 1.25% |
| $151,001+ | 1.5% |
Unlike income tax bands, the MLS rate applies to the entire income once you cross a threshold.
Step 5: HECS-HELP Repayment (from 1 July 2025)
From 1 July 2025, HECS-HELP repayments use a new marginal system - rates apply only to income above each threshold, not the whole income:
| Band | Rate |
|---|---|
| $0 – $67,000 | 0% |
| $67,001 – $70,000 | 1% of income in this band |
| $70,001 – $80,000 | 2% |
| $80,001 – $90,000 | 3% |
| $90,001 – $100,000 | 3.5% |
| $100,001 – $115,000 | 5% |
| $115,001 – $130,000 | 6% |
| $130,001 – $145,000 | 7% |
| $145,001 – $160,000 | 8.5% |
| $160,001 – $180,000 | 9% |
| $180,001+ | 10% |
Step 6: Super Guarantee (informational)
Your employer must contribute 12% (from 1 July 2025) of your ordinary time earnings into your superannuation fund. This is paid on top of your salary and does not reduce your take-home pay. It is shown as context to help you understand your total compensation.
The formula
Where
Worked examples
$80,000 salary, no HECS, no private hospital cover
Income tax (brackets)
= $14,788
LITO (income > $66,667)
= $0
Net income tax
= $14,788
Medicare Levy (2%)
= $1,600
MLS (no private cover, ≤ $97,000)
= $0
Net annual pay
= $63,612 ($5,301/month)
Result
Take-home pay = $63,612/year = $5,301/month. Super: $9,600 (12%) paid by employer.
$120,000 salary, HECS debt, no private hospital cover
Income tax (brackets)
= $26,788
LITO
= $0
Medicare Levy
= $2,400
MLS (Tier 2: $113,001–$151,000)
= $1,500
HECS repayment (marginal on bands above $67k)
= $30 + $200 + $300 + $350 + $750 + $300 = $1,930
Net annual pay
= $87,382 ($7,282/month)
Result
Take-home pay = $87,382/year. HECS repayment $1,930/year. Super: $14,400 (12%) on top.
Verification
| Gross | Private cover | HECS | Expected net | Verified |
|---|---|---|---|---|
| $20,000 | N/A | No | $20,000 | Manual (LITO eliminates tax) |
| $50,000 | No | No | $43,462 | Manual (bracket calc) |
| $100,000 | No | No | $76,212 | Manual (MLS tier 1) |
| $200,000 | No | No | $136,862 | Manual (MLS tier 3) |
Accounting identity (verified in unit tests for all scenarios):
gross = net + netIncomeTax + medicareLevy + MLS + hecsRepayment
Assumptions & limitations
- Assumes PAYE employment with no other income
- Uses a single taxpayer (no family thresholds for Medicare Levy)
- HECS-HELP repayment uses the new marginal system from 1 July 2025 (not the old whole-income rate)
- Salary packaging reduces taxable income; the benefit (fringe benefit) is not modelled
- Super Guarantee is informational only - it is paid by your employer on top of your salary
- MLS applies to the entire income once a tier threshold is crossed (not marginal)
- Does not model: SAPTO (Senior and Pensioners Tax Offset), LMITO (discontinued), LAMITO, dependent tax offsets, tax file number withholding