Quick answer: Use the calculator below to work out your Australian income tax and take-home pay for 2026-27. It applies the current resident tax brackets that started on 1 July 2026, including the legislated cut of the second bracket from 16 to 15 percent, plus the 2 percent Medicare levy and the Low Income Tax Offset.
Australia income tax calculator 2026-27
Uses the current 2026-27 resident tax brackets (in effect from 1 July 2026, including the legislated cut of the second bracket from 16 to 15 percent), the 2 percent Medicare levy and the Low Income Tax Offset.
Estimate for Australian tax residents claiming the tax-free threshold. Excludes HELP repayments, Medicare levy reductions and surcharge, salary sacrifice, other offsets and deductions. Actual PAYG withholding by your employer follows ATO tax tables and differs slightly from the annual calculation. Verify with the ATO or a registered tax agent.
TLDR: On a salary of $85,000 in 2026-27 you pay $16,020 income tax plus $1,700 Medicare levy, leaving take-home pay of $67,280, or roughly $1,294 a week. The only bracket change this year is the second bracket dropping to 15 percent, worth $268 for anyone earning above $45,000, and a further cut to 14 percent is already legislated for 1 July 2027.
Table of contents
The 2026-27 tax brackets
Australia taxes residents progressively: each slice of income is taxed at its own rate, so moving into a higher bracket never reduces your take-home pay. For the financial year that began on 1 July 2026, the first $18,200 is tax free, income to $45,000 is taxed at 15 percent, income to $135,000 at 30 percent, income to $190,000 at 37 percent, and anything above that at 45 percent. The Medicare levy of 2 percent applies on top for most residents.
Tax at common salaries
| Taxable income | Income tax | Medicare levy | Take-home |
|---|---|---|---|
| $45,000 | $4,020 | $900 | $40,080 |
| $65,000 | $10,020 | $1,300 | $53,680 |
| $85,000 | $16,020 | $1,700 | $67,280 |
| $100,000 | $20,520 | $2,000 | $77,480 |
| $135,000 | $31,020 | $2,700 | $101,280 |
| $190,000 | $51,370 | $3,800 | $134,830 |
These figures exclude offsets, HELP repayments and deductions, so treat them as the baseline. The calculator above applies the Low Income Tax Offset automatically where it applies.
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The Low Income Tax Offset
LITO reduces the tax bill of lower earners by up to $700. The full amount applies to taxable incomes up to $37,500, then it tapers away and reaches zero at $66,667. Combined with the tax-free threshold, LITO means a low income earner can earn several thousand dollars above $18,200 before paying any income tax. It is applied automatically when you lodge your return, so there is nothing to claim.
Common questions
Why is my payslip withholding different from this calculator?
Employers withhold tax using ATO fortnightly or monthly tables, which approximate the annual result. Small differences wash out when you lodge your return: withhold too much across the year and you receive a refund, too little and you owe the balance.
Does everyone pay the Medicare levy?
Most residents pay the flat 2 percent, but low income earners below the levy threshold pay a reduced amount or nothing, and higher earners without private hospital cover can pay an additional Medicare Levy Surcharge. The calculator applies the standard 2 percent only.
What changes next year?
The second bracket rate is already legislated to fall again, from 15 to 14 percent, on 1 July 2027. That is worth up to another $268 a year. No other bracket changes are currently legislated.
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