Income Tax Calculator Australia

Q: What are the income tax brackets for 2023-24?

Taxable income Tax on this income 0 – $18,200 Nil $18,201 – $45,000 19c for each $1 over $18,200 $45,001 – $120,000 $5,092 plus 32.5c for each $1 over $45,000 $120,001 – $180,000 $29,467 plus 37c for each $1 over $120,000 $180,001 and over $51,667 plus 45c for each $1 over $180,000 These rates do not include the 2% Medicare Levy, and are for residents of Australia.

Q: How is income tax calculated?

Income tax in Australia is a progressive system, meaning those who earn more pay a higher proportion of their income towards income tax, while those who earn less pay less. The marginal rate is your top tax bracket, while the effective rate is your overall tax liability as a percentage of your income. Remember that when calculating tax, only the income between each bracket is taxed at that level - not your overall income. Deposit interest is also classed as taxable income, such as from savings accounts or term deposits. If you earned $70,000 in a financial year and earned $2,000 in deposit interest, you will be taxed as if you earned $72,000.

Q: How can I estimate my tax return?

There are plenty of calculators out there - even the Australian Tax Office has one. While calculators make the job easy, it's still possible to do it yourself. You will need to find out how much of your income sits between each income tax bracket, and do the sums from there. After you find out how much tax you'd owe, you will have to find out how much you've been taxed through the year via your payslips. If it's higher, then you might expect a refund. For a more complete picture, you can use the MyGov ATO portal, which will usually have pre-filled income information and a tax refund estimator. Don't forget to include any other income too, such as savings interest income. If you have work expenses or deductions, you will have to factor those in too.

Q: My income tax bill is way higher than it should be - why?

One of the most common culprits for paying much more tax than you need in each payslip is because you haven't ticked the 'Income Tax Free Threshold' box on the Tax File Number Declaration Form when you signed up to a new job. If you haven't ticked this, none of your income is exempt from tax. If you ticked it, $18,200 would have been exempt. Relax though, because you will likely get back what's owed to you at the end of financial year in your tax return and refund via the ATO. If you have more than one job, it's generally advised you tick the exemption box for one job - usually the higher paying of the two. If you tick it for each job, you might have a tax bill, which could be an unexpected surprise at tax time.

How much income tax should you be paying? Compare gross income versus net income.

This calculator helps you:

Work out how much income tax you should be paying, updated with 2024-25 tax cuts
Calculate gross pay versus net pay - per annum, and per week
The 2% Medicare levy

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2024-25 Stage 3 Tax Cuts Explained

Despite promises of no changes under an Albanese Government, on 25 January 2024 the Prime Minister announced changes to the stage 3 tax cuts.

Essentially the 37c bracket was retained but the threshold raised; the tax-free threshold stayed the same; the 19c bracket was lowered to 16c; and the 45c bracket now kicks in at $190,000 instead of $200,000 like originally planned.

$0 to $18,200: Nil
$18,200 to $45,000: 16c
$45,000 to $135,000: 30c
$135,000 to $190,000: 37c
$190,000+: 45c

These calculations don't encompass the Medicare Levy or any surcharges.

Never mind if brackets were indexed to inflation, the tax-free threshold (left unchanged since 2012-13) would be $24,217, and the top threshold (left unchanged since 2008-9) would be $263,722.

$50,000 Income

Someone earning $50,000 will be $929 better off than 2023-4, and $802 better off than the original stage 3 plan.

$95,000 Income

Someone earning the average (mean) full-time salary of $95,000 will be $2,054 better off than 2023-4, and $804 better off than the original stage 3 plan.

$150,000 Income

Someone earning $150,000 in income would be $3,729 better off than 2023-4, but $246 WORSE off than under the original stage 3 plan.

$250,000 Income

About $4,529 better off than 2023-4, much lower than the legislated $9,075 under the original stage 3 plan.

Medicare Levy threshold raised in-line with inflation

Currently, singles earning below $24,276 do not need to pay any Medicare Levy surcharge.

Only those earning above $30,345 pay the full 2% levy.

Now those thresholds have been raised by 7.1% - in-line with inflation - to $26,000 and $32,500 respectively.

Under the proposal, someone earning $30,000 would be $172.40 better off under the proposal.

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 paycheques.

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 $97,000 a year as an individual, or $194,000 as a family unit; the thresholds were raised in-line with inflation for 2024-25.

2024-25 MLS Brackets	Single Income	Family Income
Tier 1 - 1%	$97,001 - $113,000	$194,001 - $226,000
Tier 2 - 1.25%	$113,001 - $151,000	$226,001 - $302,000
Tier 3 - 1.5%	$151,001 or more	$302,001 or more

There are no particular MLS benefits for pooled family income, except after one child, where the threshold is raised by $1,500 for every dependent after the first.

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 - plus any extra benefits associated with private health cover.

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Bank	Savings Account	Base Interest Rate	Max Interest Rate	Total Interest Earned	Introductory Term	Minimum Amount	Maximum Amount	Minimum Monthly Deposit	Minimum Opening Deposit	Account Keeping Fee	Link	Compare
Rabobank Australia	Rabobank Australia High Interest Savings Account (< $250k)	4.40% p.a.	5.75% p.a. Intro rate for 4 months then 4.40% p.a.	$980	4 months	$0	$250,000	$0	$0	$0	More details	Compare
ME Bank	ME Bank HomeME Savings Account ($0 - $100,000)	0.55% p.a. Bonus rate of 5.00% Conditions apply.	5.55% p.a.	$1,139	–	$0	$100,000	$2,000	$0	$0	More details	Compare
BOQ	BOQ Future Saver Account ( < $50k)	0.05% p.a. Bonus rate of 5.45% Conditions apply.	5.50% p.a.	$1,128	–	$0	$50,000	$1,000	$0	$0	More details	Compare
MOVE Bank	MOVE Bank Growth Saver ($1 - $25k)	0.10% p.a. Bonus rate of 5.40% Conditions apply.	5.50% p.a.	$1,128	–	$1	$25,000	$200	$1	$0	More details	Compare
ING	ING Savings Maximiser (<$100k)	0.55% p.a. Bonus rate of 4.95% Conditions apply.	5.50% p.a.	$1,128	–	$0	$100,000	$1,000	$0	$0	More details	Compare
AMP Bank	AMP Bank Saver Account (<$250k)	1.20% p.a. Bonus rate of 4.20% Conditions apply.	5.40% p.a.	$1,107	–	$0	$250,000	$1,000	$0	$0	More details	Compare

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Frequently Asked Questions

What are the income tax brackets for 2023-24?

Taxable income	Tax on this income
0 – $18,200	Nil
$18,201 – $45,000	19c for each $1 over $18,200
$45,001 – $120,000	$5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000	$29,467 plus 37c for each $1 over $120,000
$180,001 and over	$51,667 plus 45c for each $1 over $180,000

These rates do not include the 2% Medicare Levy, and are for residents of Australia.

How is income tax calculated?

Income tax in Australia is a progressive system, meaning those who earn more pay a higher proportion of their income towards income tax, while those who earn less pay less.

The marginal rate is your top tax bracket, while the effective rate is your overall tax liability as a percentage of your income. Remember that when calculating tax, only the income between each bracket is taxed at that level - not your overall income.

Deposit interest is also classed as taxable income, such as from savings accounts or term deposits. If you earned $70,000 in a financial year and earned $2,000 in deposit interest, you will be taxed as if you earned $72,000.

How can I estimate my tax return?

There are plenty of calculators out there - even the Australian Tax Office has one. While calculators make the job easy, it's still possible to do it yourself. You will need to find out how much of your income sits between each income tax bracket, and do the sums from there.

After you find out how much tax you'd owe, you will have to find out how much you've been taxed through the year via your payslips. If it's higher, then you might expect a refund.

For a more complete picture, you can use the MyGov ATO portal, which will usually have pre-filled income information and a tax refund estimator.

Don't forget to include any other income too, such as savings interest income. If you have work expenses or deductions, you will have to factor those in too.

My income tax bill is way higher than it should be - why?

One of the most common culprits for paying much more tax than you need in each payslip is because you haven't ticked the 'Income Tax Free Threshold' box on the Tax File Number Declaration Form when you signed up to a new job.

If you haven't ticked this, none of your income is exempt from tax. If you ticked it, $18,200 would have been exempt.

Relax though, because you will likely get back what's owed to you at the end of financial year in your tax return and refund via the ATO.

If you have more than one job, it's generally advised you tick the exemption box for one job - usually the higher paying of the two. If you tick it for each job, you might have a tax bill, which could be an unexpected surprise at tax time.

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