Australia Income Tax Calculator
Calculate your Australian income tax liability for the 2024-25 financial year, including the Medicare levy, effective tax rate, and take-home pay.
How to use this tool
- Enter taxable income in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your income tax and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Income tax is calculated using progressive brackets. For FY 2024-25:
$0 – $18,200: Nil$18,201 – $45,000: 19% on excess over $18,200$45,001 – $120,000: $5,092 + 32.5% on excess over $45,000$120,001 – $180,000: $29,467 + 37% on excess over $120,000$180,001+: $51,667 + 45% on excess over $180,000
Medicare Levy = Income × 2%
Effective Rate = Total Tax / Taxable Income × 100
How it works
The Australian Tax Office (ATO) uses a tiered progressive tax system where each dollar of income within a bracket is taxed at that bracket's marginal rate. The 2% Medicare Levy is applied on top of income tax to fund the public healthcare system. This calculator uses the 2024-25 resident tax rates and does not account for the Low Income Tax Offset (LITO) or other offsets.
Worked example
Salary of $80,000
- Income of $80,000 falls in the $45,001–$120,000 bracket.
- Income tax = $5,092 + ($80,000 − $45,000) × 32.5% = $5,092 + $11,375 = $16,467.
- Medicare Levy = $80,000 × 2% = $1,600.
- Total tax = $16,467 + $1,600 = $18,067; take-home = $80,000 − $18,067 = $61,933.
Income Tax: $16,467 | Medicare Levy: $1,600 | Total Tax: $18,067 | Effective Rate: 22.58%
Common mistakes to avoid
- Failing to add the Medicare Levy (2% of taxable income) on top of income tax, which understates total tax liability for most residents.
- Using the wrong financial year tax brackets: Australia's tax rates changed materially in FY2024-25 (Stage 3 tax cuts), and using prior-year brackets significantly overstates tax for incomes between $45,001 and $135,000.
- Ignoring the Low Income Tax Offset (LITO): this offset reduces tax for lower earners and not applying it overstates liability for incomes below $66,667.
Key terms
- What is the Medicare Levy?
- A 2% surcharge on taxable income levied on most Australian taxpayers to help fund the Medicare public health system.
- What is the tax-free threshold?
- The first $18,200 of income is tax-free for Australian residents in FY 2024-25.
- What is the marginal tax rate?
- The rate applied to each additional dollar of income within a given bracket, ranging from 0% to 45% in Australia.
- What is effective tax rate?
- Total tax paid divided by total taxable income, expressed as a percentage. It is always lower than the marginal rate.
Frequently asked questions
- What is the tax-free threshold in Australia for FY2024-25?
- Australian tax residents pay no income tax on the first $18,200 of taxable income. The effective tax-free threshold is higher when the Low Income Tax Offset (LITO) is applied, effectively bringing the zero-tax threshold to approximately $21,884.
- Do I pay Medicare Levy on my entire income?
- The standard Medicare Levy is 2% of taxable income for residents above the low-income threshold (approximately $26,000 for singles in FY2024-25). A Medicare Levy Surcharge of 1-1.5% applies additionally to higher earners who do not have private hospital cover.
- How does Australia's superannuation system interact with income tax?
- Employer super contributions (currently 11.5% in FY2024-25, rising to 12% in FY2025-26) are not included in taxable income and are taxed within the super fund at 15%, which is lower than most employees' marginal rates. Salary sacrifice contributions to super can also reduce taxable income.