Why use this calculator
Understanding your Australian tax liability is essential for financial planning, salary negotiations, and budgeting. This calculator uses the current 2024-25 ATO tax brackets (which include the Stage 3 tax cuts) to show exactly how much tax you will pay, your effective tax rate, and your take-home pay. Knowing the difference between your marginal and effective tax rate helps you make smarter decisions about deductions, salary sacrifice, and additional income.
How to use it
Enter your total taxable income for the financial year and select whether to include the 2% Medicare levy. The calculator applies the current ATO tax brackets to determine your income tax, Medicare levy, total tax liability, and take-home pay at annual, monthly, and fortnightly levels.
The formula
2024-25 Tax Brackets: $0-$18,200 = Nil. $18,201-$45,000 = 16c per $1 over $18,200. $45,001-$135,000 = $4,288 + 30c per $1 over $45,000. $135,001-$190,000 = $31,288 + 37c per $1 over $135,000. $190,001+ = $51,638 + 45c per $1 over $190,000. Medicare Levy = 2% of taxable income.
Worked examples
$85,000 taxable income including Medicare levy
Income tax of $16,288, Medicare levy of $1,700, total tax of $17,988, take-home of $67,012
$150,000 taxable income including Medicare levy
Income tax of $36,838, Medicare levy of $3,000, total tax of $39,838, take-home of $110,162
When people use it
- Calculating take-home pay from a new job offer
- Understanding the tax impact of a pay rise
- Planning deductions to minimise tax liability
- Comparing before-tax and after-tax salary figures
Tips
- Your marginal rate only applies to income in that bracket, not your entire income
- The 2024-25 Stage 3 tax cuts reduced the 32.5% bracket to 30% and extended it to $135,000
- Salary sacrifice into super can reduce your taxable income and overall tax
- Low-income earners may be eligible for the Low Income Tax Offset (LITO) which further reduces tax
Questions people ask
- What is the difference between marginal and effective tax rate?
- Your marginal tax rate is the rate you pay on your last dollar of income. Your effective tax rate is your total tax divided by total income, which is always lower than your marginal rate because the first $18,200 is tax-free and lower brackets are taxed at lower rates.
- What changed with the Stage 3 tax cuts?
- From 1 July 2024, the 19% bracket was reduced to 16%, the 32.5% bracket was reduced to 30%, and the threshold for the 37% bracket was raised from $120,000 to $135,000. The 45% top rate now applies from $190,000 instead of $180,000.
- Who pays the Medicare levy?
- Most Australian taxpayers pay the 2% Medicare levy on their taxable income. Low-income earners may be eligible for a reduction or exemption. The Medicare Levy Surcharge (additional 1-1.5%) applies to higher-income earners who do not have private hospital cover.