How is income tax calculated in Australia?

Australia uses progressive tax brackets. Most residents also pay a 2% Medicare Levy.

What is the tax-free threshold?

The first $18,200 of your income is tax-free for Australian residents.

Salary After Tax Calculator by Country

How Salary After Tax is Calculated in Australia

Australia has a progressive income tax system administered by the Australian Taxation Office (ATO). Your take-home pay is calculated by deducting income tax and the Medicare Levy from your gross salary.

Tax-Free Threshold

Most residents can earn up to a certain amount per year without paying any income tax. This tax-free threshold ensures that low-income earners pay little to no tax. If you earn below this amount, you only pay the Medicare Levy.

Income Tax Brackets

Australia has several tax brackets. These rates apply progressively to different portions of your income.

Medicare Levy

The Medicare Levy is 2% of your taxable income and helps fund Australia's public healthcare system. Most Australian residents pay this levy, though low-income earners may qualify for a reduction or exemption.

Financial Year

The Australian financial year runs from July 1st to June 30th. Tax returns are typically due by October 31st, though using a registered tax agent can extend this deadline. Planning around the financial year can help optimize your tax position.