How We Calculate Australian Taxes

A simple explanation of how Australian tax calculations work

Income Tax

In Australia, income tax works on a progressive system. This means the more you earn, the higher percentage you pay on portions of your income.

Income Range	Tax Rate
$0 - $18,200	0%
$18,201 - $45,000	19¢ for each $1 over $18,200
$45,001 - $120,000	$5,092 plus 32.5¢ for each $1 over $45,000
$120,001 - $180,000	$29,467 plus 37¢ for each $1 over $120,000
$180,001 and over	$51,667 plus 45¢ for each $1 over $180,000

Example:

If you earn $60,000 per year:

First $18,200: No tax (tax-free threshold)
$18,201 to $45,000 ($26,800): 19% = $5,092
$45,001 to $60,000 ($15,000): 32.5% = $4,875
Total tax: $9,967

Medicare Levy

The Medicare Levy is an additional 2% tax on your total taxable income that helps fund Australia's public health system.

Example:

If your taxable income is $60,000, your Medicare Levy would be:
$60,000 × 2% = $1,200

HECS/HELP Repayments

If you have a student loan through the Higher Education Contribution Scheme (HECS) or Higher Education Loan Program (HELP), you'll need to make repayments once your income reaches a certain threshold.

Income Range	Repayment Rate
Below $51,850	0%
$51,851 - $59,737	1%
$59,738 - $68,489	2%
$68,490 - $82,338	4%
$82,339 - $91,091	5%
$91,092 - $100,240	6%

Example:

If your income is $65,000 and you have a HECS/HELP debt:
Your repayment rate would be 2%
$65,000 × 2% = $1,300 per year in HECS/HELP repayments

Putting It All Together

To calculate your take-home pay:

Start with your gross (pre-tax) income
Subtract your income tax
Subtract the Medicare Levy (if applicable)
Subtract HECS/HELP repayments (if applicable)
The result is your annual take-home pay

Full Example:

For someone earning $65,000 with HECS/HELP debt:

Income Tax: ~$12,967
Medicare Levy: $1,300
HECS/HELP: $1,300
Total Deductions: $15,567
Take-home pay: $49,433 per year
Monthly: $4,119
Fortnightly: $1,901