Australian Income Tax 2025-26 rates

This calculator uses the current FY2025-26 tax brackets, Medicare levy, Low Income Tax Offset (LITO), and optional HECS/HELP compulsory repayments.

How income tax is calculated

Australia uses a progressive tax system. Tax is applied in layers:

Example — $90,000 salary: $4,288 (16% band) + $13,500 (30% on $45,001–$90,000) = $17,788 base tax. After LITO (nil at this income) and before Medicare levy.

Medicare levy

Most residents pay 2% of taxable income. The levy phases in for incomes between $26,000 and $32,500 to avoid a "tax cliff" at the threshold. At $90,000 the full levy applies: $90,000 × 2% = $1,800.

Low Income Tax Offset (LITO)

LITO directly reduces the tax you owe — up to $700 for incomes at or below $37,500. It phases out at 5c per dollar from $37,500 to $45,000, then at 1.5c per dollar up to $66,667. Above $66,667, LITO is zero.

Example — $40,000 income: $700 − (($40,000 − $37,500) × 0.05) = $700 − $125 = $575 offset.

HECS/HELP compulsory repayments

If you have a HELP debt, you make compulsory repayments to the ATO once your income exceeds $54,435. The repayment rate starts at 1% and increases gradually to 10% above $148,791. These repayments reduce your HELP balance but are separate from income tax.

Total package vs gross salary (SGC)

When "income includes super" is checked, the calculator extracts your salary using the current Superannuation Guarantee rate (12% in FY2025-26). For example, a $110,000 total package implies a $98,214 salary — the rest is your super contribution.

Effective vs marginal rate

Your effective rate is total tax ÷ gross income — your average burden across all income. Your marginal rateis the rate on your next dollar of income. For most people earning $45,001–$135,000, the marginal rate is 30% but the effective rate is substantially lower because lower bands are taxed at 0% and 16%.

Based on ATO FY2025-26 schedules. Excludes seniors tax offsets, private health insurance surcharge, and state or territory levies. Not financial advice.