Making use of a simple Income Tax Calculator will help you get the most out of your return this year. Before you head to the account or try and file your own tax return, take the time to assess where your finances are and where things are headed leading into the end of financial year. Using this online tax calculator, you can calculate your weekly, fortnightly, monthly and annual salary after PAYG tax deductions for the Australian Taxation Office (ATO).
How to Use the Income Tax Calculator
To use the Australian tax calculator:
- Enter your salary into the “Annual Salary” field.
- If your salary includes Superannuation, click the relevant box to say “Yes”.
- If you are repaying HELP/HECS debt, click the relevant box to say “Yes”.
- If you are a non-resident for tax purposes in Australia, click the relevant box to say “Yes”.
- Click “Calculate“.
The Tax Calculator uses exact ATO formulas when calculating your salary after income tax. An important thing to note is that certain ATO tax tables round your income and taxes to the nearest dollar (as per the tax tables provided by the Australian Tax Office) and hence there may be some slight discrepancies with your actual payslip. But here you have a correct and accurate calculation of your tax.
IMPORTANT NOTE: This calculator does not include any Medicare Levy Surcharges and assumes you have private health insurance.
The correct calculation of your assessable income is of utmost importance when it comes to income tax. If you have lots of different sources of income or other tax deductions to consider, it’s best to consult a tax advisor to avoid mistakes.
What is the Taxable Income?
Taxable income is the part of your assessable income that is taxed. This is a broader calculation than the simple calculator above. The correct calculation of your assessable income is very important when it comes to your income tax. If you have lots of different sources of income, it is best to consult an accountant or tax advisor to avoid any mistakes.
To calculate your assessable income, it mostly includes:
- Salary and wages;
- Bonuses and awards;
- Tips; and
- Other sources of income such as Parental leave pay, Annuities, interest and dividends etc.
It’s also important to note that not all assessable income is taxed. You may be eligible for tax deductions which reduce the amount of income that can be taxed. Examples of deductions may include:
- Work-related vehicle expenses;
- Home office expenses;
- Work-related Internet & phone expenses;
- Work-related Clothing, laundry or tools/equipment expenses, etc.; or
- Charitable donations.
Again, it’s always best to consult a tax advisor or accountant on this and the official ATO website.
What are the ATO Tax Rates for 2020-21 and 2021-22?
These rates apply to individuals who are Australian residents for tax purposes. The following resident tax rates apply for 2021-22 and 2022-22:
| Taxable income | Tax on this income |
|---|---|
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 19 cents for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
IMPORTANT NOTE: the above ATO tax rates do not include the Medicare levy which increased from 1.5% to 2% from July 1, 2014.
What is the Medicare Levy Surcharge (MLS)?
If your income is above the threshold of $90,000 for singles or $180,000 for couples, if you do not have private health insurance, you will need to pay the Medicare Levy Surcharge (MLS). The MLS is calculated as 1%-1.5% of your income. This is in addition to the Medicare Levy of 2% which is paid by most Australian taxpayers.
General FAQs
For taxable income between $18,201 – $45,000 you pay 19 cents for each $1 over $18,200, for taxable income between $45,001 – $120,000 you pay $5,092 plus 32.5 cents for each $1 over $45,000, for taxable income between $120,001 – $180,000 you pay $29,467 plus 37 cents for each $1 over $120,000, for taxable income between $180,001 and over you pay $51,667 plus 45 cents for each $1 over $180,000
If your taxable income is $60,000 in Australia, you will be taxed $11,167. Your average tax rate is 18.6% and your marginal tax rate is 34.5%. Your net pay will be $48,833 per annum, or $4,069 per month.
