Methodology

How we calculate Australian income tax, Medicare levy, HECS/HELP, and superannuation for 2026-27.

All rates, thresholds, and offsets below are sourced from the ATO and Australian Treasury as legislated for the 2026-27 financial year (1 July 2026 – 30 June 2027). Estimated figures are clearly marked.

Primary sources

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Resident income tax rates: ATO — Tax rates for Australian residents

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Non-resident income tax rates: ATO — Tax rates for foreign residents

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Working holiday maker rates: ATO — Tax rates for working holiday makers (Schedule 15)

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Low Income Tax Offset (LITO): ATO — Low Income Tax Offset

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Medicare Levy: ATO — Medicare Levy

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Medicare Levy Surcharge: ATO — Medicare Levy Surcharge

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HECS/HELP repayment rates: ATO — Higher Education Loan Program (HELP)

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Superannuation Guarantee rate: ATO — How much super to pay

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Stage 3 tax cuts (2026-27 15% bracket): Treasury — Personal income tax cuts

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Average full-time earnings (salary page comparison): ABS — Average Weekly Earnings, Australia, May 2026 (full-time adult ordinary time earnings: $2,083.70 a week, about $108,352 a year; a mean, not a median)

Calculation steps

Step 1 — Taxable income

Taxable income = Gross salary − Work deductions − Salary sacrifice

Salary sacrifice reduces both taxable income and the gross salary base from which super is calculated (salary sacrifice contributions go into super separately).

Step 2 — Income tax (before offsets)

Australian residents (2026-27):

$0 – $18,200: Nil

$18,201 – $45,000: 15% × (income − $18,200)

$45,001 – $135,000: $4,020 + 30% × (income − $45,000)

$135,001 – $190,000: $31,020 + 37% × (income − $135,000)

$190,001+: $51,370 + 45% × (income − $190,000)

Non-residents (2026-27):

$0 – $135,000: 30% (no tax-free threshold)

$135,001 – $190,000: $40,500 + 37% × (income − $135,000)

$190,001+: $60,850 + 45% × (income − $190,000)

Working holiday makers (visa 417 & 462):

$0 – $45,000: 15% (flat, no tax-free threshold)

$45,001 – $135,000: $6,750 + 30% × (income − $45,000)

$135,001 – $190,000: $33,750 + 37% × (income − $135,000)

$190,001+: $54,100 + 45% × (income − $190,000)

Step 3 — Low Income Tax Offset (LITO)

Applies to Australian residents only. Not available to non-residents or working holiday makers.

≤ $37,500: LITO = $700

$37,501 – $45,000: LITO = $700 − (income − $37,500) × 5%

$45,001 – $66,667: LITO = $325 − (income − $45,000) × 1.5%

> $66,667: LITO = Nil

Net income tax = max(0, income tax − LITO)

Step 4 — Medicare Levy

Applies to Australian residents only. Working holiday makers and non-residents do not pay the Medicare Levy.

≤ $28,011: Nil

$28,012 – $35,014: (income − $28,011) × 10% (shade-in)

> $35,014: income × 2%

Shade-in thresholds are 2026-27 estimates. The Medicare Levy Surcharge (1–1.5%) applies separately to residents earning above $105,000 without private hospital cover.

Step 5 — HECS/HELP repayment

From 1 July 2025, HECS/HELP compulsory repayments use a marginal system. You repay a percentage only of the income above the first threshold — not a flat percentage of your whole income as under the old system. The top band is the exception: it is a flat 10% of total repayment income. For 2026-27:

$0 – $69,528: Nil

$69,529 – $129,717: 15% × (income − $69,528)

$129,718 – $186,050: $9,028 + 17% × (income − $129,717)

$186,051+: 10% × total repayment income

The repayment is assessed on your repayment income, which is your taxable income plus reportable super contributions (such as salary sacrifice), reportable fringe benefits, net investment losses and exempt foreign income. Because reportable super is added back, salary sacrificing into super does not reduce your HECS repayment.

Source: ATO — Study and training support loans: rates and repayment thresholds (2026-27). See our dedicated HECS-HELP repayment calculator for a full breakdown.

Step 6 — Employer superannuation

The Superannuation Guarantee rate is 12% from 1 July 2025, applying to ordinary time earnings.

Employer super = gross salary × 12%

Salary sacrifice amounts are shown as additional super contributions (not included in the employer super calculation, but shown in total super).

Step 7 — Take-home pay

Take-home pay = Gross salary − Net income tax − Medicare Levy − MLS − HECS repayment − Salary sacrifice

Super is paid on top of salary and is not deducted from take-home pay.

What changed for 2026-27

The most significant change for 2026-27 is the Stage 3 tax cuts, which came into effect from 1 July 2026:

The 19% resident rate on income $18,201–$45,000 was reduced to 15%.
Working holiday maker rates for 2026-27 are 15% up to $45,000, then 30% to $135,000, 37% to $190,000 and 45% above that (the 30% rate has applied since 2024-25, down from 32.5%), as set out in ATO Schedule 15.
The Superannuation Guarantee is 12% (it rose from 11.5% on 1 July 2025).

Corrections policy

Every figure on this page is checked against the ATO source linked next to it, but tax law changes and mistakes happen. If you believe a rate, threshold, or formula above is wrong, please get in touch with the specific issue and, where possible, the ATO page you are comparing it against.

I review correction requests myself and aim to respond within 5 business days. A verified correction is applied to the site immediately and recorded in the changelog with the date it was fixed — nothing is corrected silently.

Methodology last reviewed: October 2026