PAYG Calculator

Receiving your first payslip with a smaller number than expected often raises an immediate question about where the deductions went. In Australia, employers deduct Pay As You Go (PAYG) withholding to cover your annual income tax liability before you ever see the money. A payg calculator instantly translates your gross salary into a clear breakdown of tax, Medicare levy, and actual take-home pay. Use the tool below to estimate your exact net earnings for the 2025–2026 financial year.

Your Details Enter your total annual gross salary before tax.
Select if you qualify for a reduced rate or exemption.
2025–2026 Tax brackets & HELP repayment rates
Resident tax rates (tax-free threshold claimed)
Income rangeTax rate
$0 – $18,2000%
$18,201 – $45,00016%
$45,001 – $135,00030%
$135,001 – $190,00037%
$190,001+45%
Resident tax rates (tax-free threshold not claimed)
Income rangeTax rate
$0 – $45,00016%
$45,001 – $135,00030%
$135,001 – $190,00037%
$190,001+45%
HELP repayment rates 2025–26
Repayment incomeRate
$0 – $54,435Nil
$54,436 – $62,8501%
$62,851 – $66,6662%
$66,667 – $70,6012.5%
$70,602 – $74,8373%
$74,838 – $79,3633.5%
$79,364 – $84,1334%
$84,134 – $89,1504.5%
$89,151 – $94,4405%
$94,441 – $100,1135.5%
$100,114 – $106,1586%
$106,159 – $112,5926.5%
$112,593 – $119,4257%
$119,426 – $126,6797.5%
$126,680 – $134,3728%
$134,373 – $142,5498.5%
$142,550 – $151,2319%
$151,232 – $160,4549.5%
$160,455+10%

How the payg calculator processes your income

The tool applies the Australian Taxation Office withholding tables to your gross income figure. It factors in residency status, the tax-free threshold claim, and Medicare levy adjustments. The calculation follows a straightforward sequence:

  • Gross annual salary serves as the baseline.
  • The applicable marginal tax rate is applied to income bands.
  • A 2% Medicare levy is added, unless exemptions or reductions apply.
  • Study loans (HELP/SSL/TSL) trigger an additional withholding rate if your income exceeds the repayment threshold.
  • The total annual liability is divided by 12 for monthly estimates, 26 for fortnightly, or 52 for weekly pay cycles.

2025–2026 PAYG tax brackets & rates

The Stage 3 tax modifications, effective from July 2024, reshaped the withholding landscape for employees and contractors. The current brackets for Australian residents declaring a tax-free threshold are:

  • $0 – $18,200: 0% (Tax-free threshold)
  • $18,201 – $45,000: 16%
  • $45,001 – $135,000: 30%
  • $135,001 – $190,000: 37%
  • $190,001+: 45%

These rates exclude the Medicare levy and potential surcharges. The calculator above automatically distributes your income across these tiers to produce an accurate annual forecast.

Withholding tables are designed to match your projected tax bill. Employers consult Schedule 5 to determine the exact dollar amount per pay period. For example, an employee earning $85,000 falls into the 30% bracket for the portion exceeding $45,000. The system deducts tax incrementally: nothing on the first $18,200, 16% on the next $26,800, and 30% on the remaining $40,000.

What variables change your actual take-home pay?

Several factors directly alter the percentage withheld from each paycheck:

  • Tax File Number (TFN) Declaration: Failing to submit a valid TFN declaration forces employers to withhold at the top marginal rate (47% combined tax and Medicare levy) by default.
  • Medicare Levy Reduction: Individuals with partial-year residency, dependents, or specific medical conditions qualify for a reduced 2% levy or full exemption.
  • Higher Education Loans: Earning above the annual threshold triggers automatic study loan repayment withholding. The repayment rate starts at 1% and scales up to 10% based on income progression.
  • Medicare Levy Surcharge (MLS): Singles earning above $93,000 or families above $186,000 without private hospital cover face an additional surcharge ranging from 1% to 1.5%.
  • Working Holiday Maker Rates: Visa holders on subclass 417 or 462 face a flat 15% rate on income up to $45,000, then 30% thereafter.

Why does your payg calculator estimate differ from the tax return?

A standard estimate assumes full-year employment and no additional income streams. Your actual annual tax return incorporates variables that standard withholding cannot predict:

  • Claimable work-related deductions for uniforms, home office expenses, and vehicle costs
  • Franking credit offsets from share investments
  • Private health insurance rebate eligibility
  • Spouse income adjustments affecting Medicare levy surcharge calculations
  • Reportable fringe benefits altering HELP repayment obligations

If your deductions exceed the standard withholding estimate, the ATO issues a refund. Secondary jobs or unreported freelance income commonly result in a tax debt upon filing. Always verify your withholding schedule if your financial situation changes mid-year.

Financial information provided here is educational. Consult a registered tax agent or the Australian Taxation Office for advice specific to your circumstances.

Frequently Asked Questions

How is PAYG calculated in Australia?
The system applies marginal tax rates to your gross income across predefined thresholds. Employers consult official ATO withholding schedules, which translate your annual salary into weekly, fortnightly, or monthly deductions. The calculation automatically accounts for the tax-free threshold, Medicare levy, and any declared study loan obligations.
Do I pay PAYG on all income types?
Standard payroll deductions cover wages, salaries, allowances, bonuses, and director fees. The withholding mechanism does not apply to passive investments, rental property profits, or capital gains. Those revenue streams fall under pay-as-you-earn quarterly installments or direct assessments when filing your annual income tax return.
What happens if my employer withholds too much tax?
Excess deductions simply flow into your annual assessment as a credit balance. You recover the overpayment by lodging an income tax return, after which the tax office issues a direct refund to your nominated bank account. This typically occurs when employment begins mid-year or significant deductions are claimed.
Does the Medicare levy affect PAYG amounts?
Yes, the calculation adds a standard 2% charge to your total projected liability. Employers deduct this automatically unless you qualify for a reduction or exemption based on partial-year residency, dependent status, or eligible medical conditions. You must submit specific declarations to your payroll department to adjust this rate.
How often does the ATO update PAYG tables?
The Australian tax office revises withholding schedules annually to reflect indexation, threshold adjustments, and legislative changes. Major revisions occur on July 1 to align with the new financial year. Employers receive updated software patches or manual table publications before the first pay period to ensure compliance.
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