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 2024-25 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
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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