How much income tax should you be paying? Compare gross income versus net income.
This calculator helps you:
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Work out how much income tax you should be paying, updated with 2026-27 tax cuts
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Calculate gross pay versus net pay - per annum, and per week
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The 2% Medicare levy
How Australia's tax system works
Australia has a progressive tax system which means the higher your income, the greater amount of tax you pay.
It works by dividing your income in tiers or 'tax brackets' with each tier taxed at a different marginal tax rate.
This means you pay higher amounts of tax only on the portion of income that falls into a higher tax bracket, not on your whole income.
In effect, it means everyone gets the first $18,200 of their income tax-free with the following rates applying after that.
2026-27 tax rates
$0 to $18,200: Nil
$18,201 to $45,000: 15c for each $1 over $18,200
$45,001 to $135,000: $4,020 plus 30c for each $1 over $45,000
$135,001 to $190,000: $31,020 plus 37c for each $1 over $135,000
$190,001+: $51,370 plus 45c for each $1 over $190,000
These rates don't encompass the Medicare Levy or any surcharges.
It's also worth noting the federal government is scheduled to drop the lowest marginal tax rate (applying to income $18,201 to $45,000) from 15% to 14% from 1 July 2027.
Medicare Levy threshold raised in-line with inflation
As of 1 July 2026, singles earning below $28,011 do not need to pay any Medicare Levy surcharge.
Only those earning above $35,013 pay the full 2% levy. Seniors and pensioners have different thresholds. (Full details are available via the ATO website.)
For families, those earning $47,238 or less are exempt from paying the Medicare levy but this threshold also increases for each dependent child. (See full details on the ATO website.)
Medicare Levy and Medicare Levy Surcharge Explained
The Medicare Levy, and the Medicare Levy Surcharge (MLS), are often confused - and it’s easy to see why. Most income tax payers, barring those on low incomes, pay the standard 2% Medicare Levy as part of their regular tax on their pay.
The MLS on the other hand is a surcharge for those on higher incomes. It is an extra 1%, 1.25% or 1.5% if you earn above a certain income threshold and do not have an appropriate level of private health cover.
Basically you don't pay the surcharge unless you're earning over $101,000 a year as an individual, or $202,000 as a family unit (plus $1,500 for each dependent child after the first one).
To avoid this extra tax, you will need to take out an appropriate private health policy. However, you will also need to work out what’s more cost effective - a private health policy, or paying extra tax - taking into account any extra benefits associated with private health cover.
Bank Savings Account Base Interest Rate Max Interest Rate Total Interest Earned Introductory Term Minimum Amount Maximum Amount Linked Account Required Minimum Monthly Deposit Minimum Opening Deposit Account Keeping Fee ATM Access Joint Application Tags Features Link Compare Promoted Product Disclosure
then 2.10% p.a.
Rate varies on savings amount.
Rate varies on savings amount.
