How We Calculate
Last verified: September 2026, for the 2025-26 and 2026-27 financial years.
This page explains exactly where our numbers come from, the formulas each calculator uses, and how often we check them. If you want to know whether you can trust a figure on this site, this is the page that shows the working.
Where the data comes from
Every rate, threshold and formula used on this site comes from a small set of official Australian sources, not from estimates or third-party aggregators.
- Income tax rates, the tax-free threshold and the Low Income Tax Offset: Australian Taxation Office
- Medicare levy and Medicare Levy Surcharge thresholds: Australian Taxation Office
- Superannuation Guarantee rate: Australian Taxation Office
- HECS and HELP repayment thresholds and rates: Australian Taxation Office
- Minimum wage and casual loading: Fair Work Ombudsman and the Fair Work Commission’s Annual Wage Review
- Average and median earnings figures used for context: Australian Bureau of Statistics
We link to the specific ATO and Fair Work pages in the Sources section of each calculator, rather than only linking to the homepage of each organisation.
How income tax is calculated
Income tax is worked out using Australia’s marginal tax brackets, which apply progressively rather than as one flat rate on your whole income. For the 2026-27 financial year, the resident rates are 0 percent up to $18,200, 15 percent from $18,201 to $45,000, 30 percent from $45,001 to $135,000, 37 percent from $135,001 to $190,000, and 45 percent above $190,000.
Foreign residents and working holiday makers are taxed on different scales, which our calculators apply automatically once you select your residency.
How the Low Income Tax Offset is applied
The Low Income Tax Offset, or LITO, reduces the income tax payable rather than adding to a refund directly. Our calculators apply it as follows: the full offset of $700 applies up to $37,500 of taxable income, it then reduces by 5 cents for every dollar earned between $37,500 and $45,000, and above $45,000 it reduces by a further 1.5 cents per dollar until it reaches zero at $66,667. This is the same phase-out structure published by the ATO.
How the Medicare levy is calculated
Most Australian residents pay a Medicare levy of 2 percent of taxable income. Our calculators apply a shade-in for lower incomes: no levy is charged below the low-income threshold, a partial levy applies in a band above that at 10 cents per dollar, and the full 2 percent applies once income clears the upper threshold. Foreign residents and working holiday makers do not pay the Medicare levy, and our calculators reflect this automatically.
How the Medicare Levy Surcharge is calculated
The surcharge is a separate charge that applies only to residents above a base income threshold who do not hold private hospital cover. It is tiered: no surcharge below the base threshold, then 1 percent, 1.25 percent and 1.5 percent in successive income bands. Ticking “private cover” in our calculators removes the surcharge, in line with how the ATO applies it.
How superannuation is calculated
The Superannuation Guarantee rate is 12 percent for both the 2025-26 and 2026-27 financial years. Our calculators show super as an amount paid by an employer on top of your salary, not as a deduction from your take-home pay. If you tell a calculator that your figure already includes super, it works backward to separate your base salary from the super component, using the same 12 percent rate, before calculating your tax.
How HECS and HELP repayments are calculated
From the 2025-26 year onward, compulsory HECS and HELP repayments use a marginal system, similar to income tax. This means you only repay a percentage of the income above each threshold, not a percentage of your whole income. Our calculators apply the current repayment thresholds and rates published by the ATO for the relevant financial year, including the higher flat rate that applies once income passes the top threshold.
Assumptions our calculators make
To keep results useful and easy to understand, our calculators assume a single person with no dependants, standard full-time or part-time hours as entered by you, and no unusual deductions, tax offsets beyond LITO, or salary packaging arrangements unless a calculator specifically asks about them. Where a calculator includes an after-tax view, such as the hourly to salary converter, it applies the resident scale by default and does not include HECS, HELP or the Medicare Levy Surcharge unless you use a calculator built to include them.
These assumptions mean our figures are estimates for planning purposes, not a substitute for your payslip, your notice of assessment, or advice from a registered tax agent.
How accurate is it?
Our calculators are built to match the ATO’s own formulas as closely as possible, and we test them against real, published examples before publishing. For a full year at a steady income, with no unusual deductions, our results are generally very close to what the ATO’s own tools would produce. Where results can differ, such as because of payroll rounding, employer-specific PAYG withholding settings, overtime, or a mid-year change in income, we explain this on the relevant page. See our Disclaimer for the full detail on what our calculators are, and are not, designed to do.
When was this last updated?
We review every rate and threshold at the start of each financial year, from 1 July, when the ATO and Fair Work typically update their figures. We also update sooner if the government announces a mid-year change, such as a legislated tax cut. Each calculator on this site shows its own “last verified” note, and this page was last checked in September 2026 against the sources listed above.
Independent review
The tax rules and 2026-27 figures used across our calculators have been reviewed by James Wilson, CPA and registered Tax Agent with the Tax Practitioners Board, and Director of Australian Tax Advisors on the Gold Coast, Queensland. The review covered the income tax brackets, the Medicare levy, superannuation and HECS or HELP repayment logic against current ATO rates. You can see James on LinkedIn.
Found something that looks wrong?
If a figure does not look right, or you think a rate is out of date, please let us know through our Contact page with the calculator name and the numbers you entered. We check every report against the official sources above.
This page explains our general calculation methodology. It is not personal financial or tax advice. See our Disclaimer and Terms of Use for more.