Methodology

Full rate tables are on the tax brackets page.

Income tax

1. Your annual salary is split across the marginal brackets for your residency status and each slice is multiplied by its rate. This reproduces the ATO's “base amount plus cents per dollar” tables exactly.
2. For Australian residents the low income tax offset is subtracted: $700 for taxable incomes up to $37,500, reducing by 5 cents per dollar up to $45,000, then by 1.5 cents per dollar until it reaches nil at $66,667. The offset cannot reduce tax below zero.
3. Foreign residents are taxed from the first dollar with no tax-free threshold, no low income tax offset and no Medicare levy.
4. Working holiday makers are taxed at working holiday maker rates, assuming a registered employer. No low income tax offset or Medicare levy is applied.

Tax-free threshold option. For residents, the tax-free threshold always applies when annual tax is assessed. Choosing not to claim it changes how much an employer withholds from each pay, not the tax for the year. The calculators estimate annual tax, so switching this option off does not change the result; a note explains that your regular pay would be lower. Pay-by-pay PAYG withholding schedules are not modelled.

Medicare levy

The levy is 2% of taxable income for residents. The low-income reduction for a single person who is not entitled to the seniors and pensioners tax offset is applied: no levy at or below the lower threshold, and 10% of the excess over the lower threshold up to the upper threshold.

Not included: family income reductions, senior and pensioner thresholds, half exemptions and the Medicare levy surcharge.

HELP / HECS repayments

HELP rules are held separately from income tax rules. For 2025–26 onwards the marginal method is used: no repayment up to the minimum threshold, then cents per dollar above it, and 10% of total repayment income at the top of the scale. For 2024–25 a single percentage is applied to total repayment income, as the law then required.

The salary you enter is used as your repayment income. Actual repayment income also includes reportable fringe benefits, net investment losses, reportable super contributions and exempt foreign employment income. If you enter a loan balance, the repayment is capped at that balance.

Superannuation

Super is the super guarantee rate for the year multiplied by your salary, up to the maximum super contribution base. When you choose “included in salary”, the amount entered is treated as a package and the base salary is found by dividing by 1 plus the super rate. Contractors are shown without super guarantee. Salary sacrifice, the 15% contributions tax and Division 293 tax are not modelled.

Pay periods

Annual amounts are converted using 12 months, 26 fortnights and 52 weeks per year. Daily figures assume a five-day week. Hourly figures use the hours per week you enter, or 38 if none is given. Hourly pay is annualised as rate × hours per week × weeks per year.

Rounding

Each component is calculated to the cent and rounded to the nearest cent. Headline figures are displayed to the nearest dollar and the breakdown shows cents where they occur. The ATO rounds some amounts differently on a notice of assessment, and employers round withholding to whole dollars each pay, so small differences are normal.

Effective and marginal tax rates

The effective tax rate is income tax plus Medicare levy, divided by gross salary. HELP repayments are not included because they repay a loan. The marginal rate shown is the income tax rate on your next dollar; add 2% for the Medicare levy where it applies.

Testing

The tax engine has an automated test suite covering each side of every bracket threshold for every supported year, the Medicare shade-in range, each HELP threshold, super and package conversions, pay frequency conversions and invalid input. Expected values are worked by hand from the ATO tables, and include the ATO's own published worked examples for HELP repayments and the Medicare levy reduction.