Use our free Australian income tax calculator to estimate your tax for the 2025-26 financial year, with FY 2024-25 also available for prior-year comparisons. Calculates income tax, Medicare levy, Medicare levy surcharge, Low Income Tax Offset (LITO), and HELP/HECS repayments. From 1 July 2026 the 16% rate on income between $18,201 and $45,000 is legislated to drop to 15%; the calculator will add FY 2026-27 when those rates take effect.
Work-related expenses, donations, etc.
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For Australian businesses
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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 to $18,200 | Nil |
| $18,201 to $45,000 | 16c for each $1 over $18,200 |
| $45,001 to $135,000 | $4,288 + 30c for each $1 over $45,000 |
| $135,001 to $190,000 | $31,288 + 37c for each $1 over $135,000 |
| $190,001+ | $51,638 + 45c for each $1 over $190,000 |
Under the personal tax cuts legislated in March 2025, the 16% marginal rate falls to 15% from 1 July 2026 and to 14% from 1 July 2027. Bracket thresholds do not change, so the saving in FY 2026-27 is up to $268 a year (tax on the $18,201 to $45,000 band drops from $4,288 to $4,020). If you are completing your 2025-26 tax return now, the FY 2025-26 table above is the one that applies.
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.
To check the tax your employer should withhold each pay cycle, use the PAYG withholding calculator, or start from your full package with the salary and take-home pay calculator. Sole traders can estimate tax on business profit with the sole trader tax calculator, and if you expect money back the tax refund calculator compares tax payable against what was withheld. When it is time to lodge, see the ATO tax lodgement app.
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.
From 1 July 2026 the 16% marginal rate drops to 15% under the personal tax cuts legislated in March 2025, with a further drop to 14% from 1 July 2027. Bracket thresholds are unchanged. This calculator models FY 2024-25 and FY 2025-26, the year most people are lodging a return for right now.
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: June 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.
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