Use our free Australian income tax calculator to estimate your tax liability for the 2025-26 financial year. Calculate your refund, understand tax brackets, Medicare levy, and discover potential deductions—all in one place.
Annual Income
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Total Tax Payable
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Income Tax
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Medicare Levy
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Effective Tax Rate
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* This calculator provides an estimate only. Actual tax liability may vary. Consult a qualified accountant for accurate advice.
Our free Australian income tax calculator is designed to help you estimate your tax obligations for the 2025-26 financial year. Whether you're an employee, contractor, or business owner, understanding your tax position can help you plan more effectively and avoid surprises at tax time.
Simply enter your annual taxable income and any tax already withheld by your employer throughout the year. Our calculator will then provide a detailed breakdown including:
Important Disclaimer
This calculator provides an estimate only. Actual tax liabilities may vary based on your specific circumstances, additional income, deductions, and other factors. For accurate advice tailored to your situation, consult with a qualified tax accountant.
Australia uses a progressive tax system, meaning you pay higher rates only on the portion of income that exceeds each threshold. This section explains how the 2025-26 tax brackets work and what they mean for your tax calculation.
The following tax rates apply to Australian residents for the 2025-26 financial year (1 July 2025 to 30 June 2026):
| Taxable Income | Tax Rate | Tax on Income | |
|---|---|---|---|
| $0 – $18,200 | $0 | Nil | |
| $18,201 – $45,000 | 16 cents per $1 | $0 | |
| $45,001 – $135,000 | 30 cents per $1 | $4,288 | |
| $135,001 – $190,000 | 37 cents per $1 | $31,288 | |
| $190,001 and over | 45 cents per $1 | $51,638 |
One common misconception is that if you earn above a threshold, all your income is taxed at that higher rate. This is not how it works!
Australia's tax system is marginal, meaning each portion of income is taxed at progressively higher rates. For example, if you earn $80,000:
The Medicare Levy is a tax that funds Australia's public healthcare system. Most Australian residents pay the standard 2% Medicare Levy on their taxable income, but there are thresholds and exemptions you should be aware of.
Single individuals earning $26,000 or less
Income between $26,000 and $32,500 (shading in applies)
Income above $32,500 pays full 2% Medicare Levy
Families with children get higher thresholds ($43,069 + $4,495 per child)
The Medicare Levy is a tax that funds Australia's public healthcare system. Most Australian residents pay this levy as part of their overall tax obligation, but there are exemptions and reductions available for certain groups.
The standard Medicare Levy rate is 2% of your taxable income. However, this applies differently based on your income level:
If your taxable income is $26,000 or less, you may be exempt from the Medicare Levy entirely.
If income is between $26,001 and $32,500, you'll pay a reduced levy on a sliding scale.
If income exceeds $32,500, you'll pay the full 2% Medicare Levy.
Families with children may qualify for a higher threshold. Contact the ATO for details.
Seniors, pensioners, and veterans may be eligible for exemptions or reductions. Check with a tax professional to ensure you're not overpaying.
Maximising your tax deductions is one of the most effective ways to reduce your tax liability. Here are the most common deductions Australians can claim:
Uniforms, protective clothing, tools, and equipment needed for your job
Business travel, commuting between workplaces (not home to work)
Electricity, internet, phone, and equipment for working from home
Courses, seminars, and conferences directly related to your current job
Must have a direct connection to your income-producing activities
Donations of $2 or more to registered deductible gift recipients
Important: You must keep receipts for all deductions and ensure they directly relate to your work. The ATO can request documentation during an audit.
One of the best ways to reduce your tax bill is by claiming legitimate deductions. The Australian tax system allows you to deduct expenses that are directly related to earning your income. Here's a comprehensive guide to the most common deductions.
Business travel, car expenses for work duties, parking, and public transport costs related to work.
Equipment, furniture, electricity, and internet costs for working from home. Use the fixed rate method (67 cents per hour) or actual cost method.
Courses, conferences, and seminars that maintain or improve your work skills. Must be related to your current occupation.
Compulsory work uniforms, protective clothing, and occupation-specific attire with a logo.
The ATO requires you to keep records to substantiate your deductions. This includes:
Important: No Receipt Needed Rule
For expenses under $82.50 where no receipt is available, you can still claim if you have a bank statement showing the expense. However, you cannot claim for meals under this rule.
Tax offsets (also known as tax rebates) directly reduce the amount of tax you owe. Unlike deductions that reduce your taxable income, offsets reduce your tax bill dollar-for-dollar.
Reduces tax for low to middle income earners
For eligible seniors and pensioners
For supporting a spouse who doesn't work
Avoided by having appropriate private health insurance
Pro Tip: Having private health insurance can help you avoid the Medicare Levy Surcharge (1-1.5% on top of the 2% Medicare Levy) if you earn above the threshold.
Tax offsets (formerly known as tax rebates) directly reduce the amount of tax you owe. Unlike deductions that reduce your income, offsets reduce your tax liability dollar-for-dollar. Here are the most common offsets you may be eligible for.
The LITO provides tax relief for low and middle-income earners. For the 2025-26 financial year:
For seniors and pensioners with taxable income below certain thresholds.
Rebate on private health insurance premiums based on income and age.
For residents of remote areas of Australia (subject to eligibility).
Did You Know?
Tax offsets are applied after your income tax is calculated, making them more valuable than deductions for most taxpayers. A $1,000 offset reduces your tax by $1,000 regardless of your marginal tax rate.
Our award-winning team of tax accountants are here to help you maximise your deductions and minimize your tax liability. Get expert advice tailored to your unique situation.
Call us on 1300 133 244 for immediate assistance
While our free tax calculator provides a great estimate of your tax obligations, every individual's situation is unique. Working with a qualified tax accountant can help you:
Accountants Point is an award-winning accounting firm based in Sydney, serving clients across Australia since 2004. Our team of qualified accountants specializes in tax planning, business advisory, and financial planning. We're committed to helping our clients achieve their financial goals through expert advice and personalized service.
If you studied at university using the Higher Education Loan Program (HELP) or the former HECS-HELP, you'll need to repay your debt through the tax system once your income reaches a certain threshold.
Your HELP debt is repaid through the tax system based on your income. The ATO automatically withholds repayments from your salary if you're an employee, or you make voluntary repayments when lodging your tax return.
| Annual Income | Repayment Rate |
|---|---|
| Below $54,434 | 0% (No repayment) |
| $54,435 – $62,850 | 1% of income |
| $62,851 – $66,619 | 2% of income |
| $66,620 – $70,617 | 2.5% of income |
| $70,618 – $74,855 | 3% of income |
| $74,856 – $79,346 | 3.5% of income |
| $79,347 – $84,106 | 4% of income |
| $84,107 – $89,154 | 4.5% of income |
| $89,155 – $94,509 | 5% of income |
| $94,510 – $100,192 | 5.5% of income |
| $100,193 – $106,227 | 6% of income |
| $106,228 – $112,635 | 6.5% of income |
| $112,636 – $119,441 | 7% of income |
| $119,442 – $126,671 | 7.5% of income |
| $126,672 and over | 8% of income |
You can make voluntary repayments to your HELP debt at any time, regardless of your income. Making voluntary repayments can help you become debt-free faster and may save you money on accumulated interest (indexation).