Australia Tax Calculator (2026)

Australia Income Tax Brackets (2025/26)

Medicare Levy

How much income tax do I pay in Australia if I earn AUD 50,000 per year?

If you earn AUD 50,000, you won't pay tax on the first AUD 18,200 (the tax-free threshold). On the remaining AUD 31,800, you'll pay 16% as a lower income earner, which equals AUD 5,088 in income tax. You'll also pay a 2% Medicare levy on your taxable income, adding AUD 1,000, bringing your total tax and levies to approximately AUD 6,088 before the Low Income Tax Offset (LITO) of AUD 700 is applied, resulting in a net tax of around AUD 5,388.

What is the Low Income Tax Offset (LITO) and who qualifies?

The LITO is a tax credit of up to AUD 700 that reduces your income tax bill if you earn below a certain threshold. If your taxable income is AUD 37,500 or less, you receive the full AUD 700 offset; if you earn between AUD 37,500 and AUD 66,667, the offset phases out gradually until it reaches zero. This is a non-refundable credit, meaning it can reduce your tax liability but won't result in a refund if your tax is less than AUD 700.

Do I need to pay superannuation contributions as an employee?

No, superannuation contributions are not deducted from your paycheck as an employee. Your employer is required to contribute 12% of your salary into your superannuation account on your behalf (as of July 2025), and this amount is not included in your taxable income or take-home pay calculation. You can choose to make additional voluntary contributions to superannuation if you wish, but the mandatory employer contribution is handled separately.

What is the Medicare levy and how does it work?

The Medicare levy is a 2% surcharge applied to your taxable income to fund Australia's public healthcare system (Medicare). This is a mandatory tax for most residents and is calculated on top of your income tax; for example, on a taxable income of AUD 50,000, the Medicare levy would be AUD 1,000. There is no threshold or exemption unless you have eligible private health insurance or meet specific exemption criteria.

What are Australia's income tax brackets for 2025?

Australia has five income tax brackets: income up to AUD 18,200 is tax-free; AUD 18,200 to AUD 45,000 is taxed at 16%; AUD 45,000 to AUD 135,000 is taxed at 30%; AUD 135,000 to AUD 190,000 is taxed at 37%; and income above AUD 190,000 is taxed at 45%. These brackets apply to resident individuals only; non-residents have different tax rules that are not covered in this calculator.

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