Simple Tax Calculator in Australia
Income Tax Percentage: 0%
Medicare Levy Tax: 2%
Total Tax Payable: $0
Australian schools don’t teach you about taxes, unfortunately. That’s why many Australians struggle to understand how much tax they owe, especially with complex rules and multiple tax brackets.
To calculate your tax, you first need to know your total taxable income. Next, find your income within the different tax brackets: up to $18,200 is tax-free, the next portion is taxed at 19%, and higher portions are taxed at increasing rates. For a quick estimate, enter your income and residency status into our tax calculator Australia to see how much tax you owe in Australia. It’s a quick and easy way to figure out your taxes for the year. But we have given a guide and examples to help you understand how to calculate taxes in Australia on your own.
Quick and Easy Tax Calculation Australia in Under 5 Minutes
We’ve made calculating taxes in Australia simpler! We’ve also given a guide to explain terms in the Australian tax system. Let’s discuss the important aspects that can help you manage your budget.
Basics of Australian Tax System
In Australia, the tax system is progressive with a marginal tax rate. This means the more you earn, the higher the tax you pay. The system has five tax brackets, each with its own tax rate.
Your marginal tax rate is the tax rate you pay on the highest portion of your income. For example, if you earn more, you move into a higher tax bracket, and you pay a higher tax rate on the last dollar you earn.
By understanding these brackets, you can easily calculate your tax and see how your income affects the amount you owe. The current tax-free limit for residents is $18,200, and the top tax rate for individuals is 45%. (See the calculation example to understand this clearly)
Australian Tax Rates 2020 to 2025
Note!
The rates below do not include the 2% Medicare levy (Don’t know about Medicare? Follow our guide on Medicare Levy)
2024-25 (Estimated)
| Taxable Income | Tax To Pay |
| 0 – $18,200 | 0 |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
2020-24
| Taxable Income | Tax To Pay |
| 0 – $18,200 | 0 |
| $18,201 – $45,000 | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37c for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45c for each $1 over $180,000 |
Using Simple Tax Calculator in Australia
Our tax calculator helps you calculate your taxable amount for all years. It's quick and easy to use. Just know that you get an estimate based on the details you enter. Type in your taxable income and residency status to get tax calculations in Australia. Don’t know about these? Let us help you out:
Taxes Terms to Know
Before you start learning about your tax and payment status in Australia, knowing these terms is crucial.
Taxable Income
This is the income you need to pay tax on after deducting allowable expenses. You declare your taxable income in your annual tax return. The pay-as-you-go (PAYG) system collects this tax from your salary or wages in Australia.
It’s calculated as Assessable Income - Allowable Deductions = Taxable Income. Use our calculator to calculate that.
Residency Status for Tax Purposes
Your residency status affects how you are taxed. Here are some common situations:
How To Use Our Simple Tax Calculator
Follow these steps:
Example of Calculation
Here’s an example to understand how to calculate tax in Australia.
Let’s see how much tax Jules, a project manager earning $22,000 per year, would need to pay using Australia's tax brackets.
For First Bracket
For Second Bracket
Since James' income doesn't exceed the second bracket, we don't need to consider the higher brackets for his basic income tax calculation.
Note!
In Australia, residents pay a Medicare Levy of 2% on their taxable income in addition to income tax. For James, with a taxable income of $22,000, the Medicare Levy amounts to $440 (Use our Medicare Levy to find out yours). When combined with his income tax of $722, his total tax payable is $1,162.
Examples Of Other Brackets
In Australia, the tax system is divided into brackets. The first bracket has a 0% tax rate for income up to $18,200. The second bracket, for income from $18,201 to $45,000, is taxed at 19%. The third bracket applies to income from $45,001 to $120,000, taxed at 32.5%. The fourth bracket covers income from $120,001 to $180,000 at a 37% rate, while the fifth bracket taxes income above $180,001 at 45%.
For example, if James earns $75,000, his tax would be calculated across multiple brackets: he pays no tax on the first $18,200, 19% on the next $26,800 (which totals $5,092), and 32.5% on the remaining $30,000 (adding $9,750).
This results in a total income tax of $14,842 (excluding Medicare Levy).
Limitations
Our Simple Tax Calculator has some limits. It gives you an estimate of the tax on your taxable income, but it doesn’t include:
Read This To Know How Taxes Work in Australia
In Australia, you need to pay taxes when you earn money from various sources like jobs, pensions, government payments, investments, and income from abroad. How much you pay depends on your earnings and any deductions or offsets you qualify for. Most people need to file a tax return with the ATO at the end of each financial year. You can do this through the ATO online services or your myGov account.
Understanding Tax Rates
Your tax rate depends on your income and your residency status. Foreign residents pay higher rates and cannot claim the tax-free threshold. Part-year residents can claim a partial tax-free threshold. Working holidaymakers should use our Income Tax Estimator to figure out their taxes.
Tax-Free Threshold
The tax-free threshold is $18,200. This means you don’t pay tax on the first $18,200 of your income. If you’re an Australian resident, you can claim this threshold to reduce the tax withheld from your pay.
For part-year residents, the tax-free threshold is a flat amount of $13,464 plus an additional amount based on the months you were in Australia. Non-residents cannot claim this threshold and must pay tax on all their Australian income.
Taxable income
Assessable income includes wages, pensions, and other types of income. Examples of assessable income include:
Medicare Levy and Surcharge
Most people pay a Medicare levy of 2% of their taxable income. If you earn a lower income, your levy might be reduced or you may not have to pay it. For more details, check our guide on Medicare levy and Medicare levy surcharge.
Just use our simple tax calculator to estimate your taxes more easily. Make sure to check your income details, know your deductions, and keep up with tax laws for accurate finance management.
