Use our free Australian income tax calculator to estimate your tax return for the 2024-25 and 2025-26 financial years. Updated with the latest Stage 3 tax cut rates effective from 1 July 2024. Calculates income tax, Medicare levy, Medicare levy surcharge, Low Income Tax Offset (LITO), and HELP/HECS repayments.
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Take-Home Pay
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Effective rate: 0.0%
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Marginal Rate
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The Stage 3 tax cuts took effect from 1 July 2024, applying to both the 2024-25 and 2025-26 financial years. The key changes were: the 19% marginal rate was cut to 16%, the 32.5% rate was cut to 30%, and the threshold for the 37% bracket was raised from $120,000 to $135,000.
| Taxable Income | Tax Rate |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 + 37c for each $1 over $135,000 |
| $190,001+ | $51,638 + 45c for each $1 over $190,000 |
The plain-text formula is:
Total tax = (income tax on taxable income − LITO) + (2% × taxable income) + Medicare Levy Surcharge (if any) + HELP/HECS repayment (if any), and take-home pay = gross income − total tax.
Taxable income is your gross annual income minus allowable deductions. Income tax on that figure is read straight from the resident brackets above (each bracket adds a fixed base amount plus the marginal rate on the dollars within it).
For a resident earning $85,000 in FY 2025-26 with no deductions:
Enter your gross annual income and we calculate your income tax using the official ATO marginal rates. We then apply the Low Income Tax Offset (LITO) for eligible residents, add the 2% Medicare levy, check for Medicare Levy Surcharge if you don't have private health insurance, and include any HELP/HECS-HELP compulsory repayment. The result is your estimated take-home pay after all deductions.
For FY 2025-26, Australian residents pay: 0% on $0-$18,200, 16% on $18,201-$45,000, 30% on $45,001-$135,000, 37% on $135,001-$190,000, and 45% on income over $190,000. These rates reflect the Stage 3 tax cuts effective 1 July 2024.
The tax-free threshold for Australian residents is $18,200. With the Low Income Tax Offset (LITO), the effective tax-free threshold is approximately $22,575. Foreign residents and working holiday makers do not receive the tax-free threshold.
The Medicare levy is 2% of your taxable income. It funds Australia's public health system. Low-income earners may be eligible for a reduction or exemption. The Medicare Levy Surcharge (MLS) of 1-1.5% applies if you earn over $101,000 (2025-26) and don't have private hospital cover.
The Low Income Tax Offset (LITO) is a tax offset of up to $700 for individuals earning $37,500 or less. It phases out between $37,501 and $66,667. LITO reduces the amount of tax you pay but cannot create a refund.
HECS-HELP repayments are based on your repayment income, which includes taxable income plus any reportable fringe benefits, net investment losses, and exempt foreign employment income. The repayment rate ranges from 1% to 10% depending on your income level.
On $85,000 of taxable income (FY 2025-26, resident, no deductions): you fall in the 30% bracket, so income tax is $4,288 plus 30c for each $1 over $45,000 = $4,288 + ($40,000 × 30%) = $16,288. Add the 2% Medicare levy ($1,700) for total tax of about $17,988, leaving roughly $67,012 take-home pay. LITO does not apply because the income is above $66,667.
A sole trader's net business profit (income minus deductible business expenses) is added to any other personal income and taxed at the same individual marginal rates shown here — there is no separate sole-trader tax rate. The 2% Medicare levy and any HELP/HECS repayment also apply. Use your expected net profit as the income figure above to estimate your bill.
From 1 July 2024, the 19% rate was reduced to 16%, the 32.5% rate was reduced to 30%, and the $120,000 threshold was raised to $135,000. Every Australian earning over $18,200 received a tax cut, with the maximum benefit of $4,529 for incomes of $190,000 and above.
Sources & methodology
This calculator applies the ATO individual income tax marginal rates current for FY 2025-26 (and FY 2024-25) to your taxable income, then layers on the Low Income Tax Offset, the 2% Medicare levy, any Medicare Levy Surcharge, and compulsory HELP/HECS-HELP repayments. Everything is computed in your browser — nothing you enter is stored or sent to a server.
Authoritative sources
Reviewed by Bishal Shrestha — Founder of OneBookPlus, 10+ years building tools with Australian tax-agent and BAS-agent practices. Last reviewed and updated: May 2026.
Disclaimer: This calculator produces estimates only and is not tax advice. Tax outcomes depend on your individual circumstances. For decisions that affect your tax position, consult a registered tax agent or the ATO directly.
OneBookPlus handles invoicing, GST tracking, BAS prep, and ATO lodgement automatically.