Tax Savings Optimiser
Enter your income and situation to get personalised, actionable strategies to reduce your Australian income tax — for FY 2025-26 and FY 2024-25.
Your Situation
Work from home
Tools, uniforms, self-education, union fees, etc.
We found 4 strategies that could save you
$3,867/year
Current tax: $21,188 (22.3% effective rate) on $95,000 income
You are in the $45,001–$135,000 bracket (30%). Marginal rate: 30.0%.
Recommended Strategies
Before vs After Optimisation
Not Applicable
Important Disclaimer
These are general strategies for educational purposes only. Savings shown are estimates based on the information you've provided. Your actual tax savings may differ. This is not personal financial advice — consult a registered tax agent or financial adviser before implementing any strategy. Tax laws and thresholds change regularly.
Tax Savings Optimiser: Reduce Your Australian Income Tax
How it works
This optimiser analyses your income, current deductions, and personal situation to identify legitimate strategies that could reduce your tax bill. It runs multiple tax calculations behind the scenes — one for your current situation, and then variations with each strategy applied — to calculate the exact dollar impact of each recommendation.
Every strategy suggested is based on current ATO rules and thresholds. The optimiser considers seven key areas: salary sacrifice into super, work-from-home deductions, private health insurance vs the Medicare Levy Surcharge, government super co-contributions, unclaimed work-related expenses, spouse super contributions, and negative gearing (informational only).
Strategies are ranked by annual saving and categorised by risk level. "No risk" strategies (like claiming legitimate deductions) have zero downside. "Low risk" strategies require some record-keeping or upfront cost. "Medium risk" strategies (like negative gearing) involve significant financial decisions and should only be considered with professional advice.
When to use this calculator
- You want to know if you're paying more tax than necessary on your current salary
- You're considering salary sacrificing into super but aren't sure of the benefit
- You want to check whether private health insurance would save you money vs paying the MLS
- You work from home and aren't sure if you're claiming the deduction correctly
- You're on a lower income and want to check if you're eligible for the government co-contribution
- You want to see the combined effect of multiple tax-saving strategies applied together
- You're preparing your tax return and want to make sure you're not missing deductions
Key concepts
- Marginal vs effective tax rate
- Your marginal rate is the tax on your last dollar of income — it determines how much each deduction saves you. Your effective rate is the overall percentage of your income that goes to tax. A $1,000 deduction at a 37% marginal rate saves $370 in tax, regardless of your effective rate. This is why deductions are more valuable for higher-income earners.
- Concessional contributions cap
- The maximum amount that can go into your super at the concessional (15%) tax rate each year. For FY 2025-26, the cap is $30,000, which includes both your employer's super guarantee (SG) contributions and any salary sacrifice. If your employer pays 12% SG on a $100,000 salary, that's $12,000 already used — leaving $18,000 of cap for salary sacrifice.
- Medicare Levy Surcharge (MLS)
- An additional 1%–1.5% tax on your entire taxable income if you earn above the threshold ($101,000 for singles in FY 2025-26) and don't have a complying private hospital insurance policy. Unlike the standard 2% Medicare levy which everyone pays, the MLS is entirely avoidable by taking out hospital cover. For a $120,000 income, the MLS costs $1,200/year — often more than basic hospital cover.
- Government co-contribution
- A free super top-up from the government for lower-income earners. If you make a personal (after-tax) contribution to your super, the government matches it at 50 cents per dollar, up to $500. You need to earn less than $60,400 (FY 2025-26) and at least 10% from employment. It's calculated and paid automatically when you lodge your tax return.
Example: Sarah, $95,000 salary, no current optimisation
Sarah earns $95,000/year, has no private health insurance, doesn't salary sacrifice, and works from home 2 days a week. She hasn't claimed any deductions. Here's what the optimiser finds:
1. Salary sacrifice: $4,536/year saving Her employer pays 12% SG = $11,400. The concessional cap is $30,000, leaving $18,600 of room. Capping at 30% of salary ($28,500), the optimiser suggests sacrificing $18,600. At her 30% marginal rate, this saves $18,600 × (30% - 15%) = $2,790, plus reduced Medicare levy.
2. Work-from-home deduction: $154/year saving Working 16 hours/week from home for 48 weeks = 768 hours × $0.67 = $515 deduction. At her 30% marginal rate, that saves ~$154 in tax.
3. Private health insurance: save ~$0 (below MLS threshold) At $95,000 taxable income (before salary sacrifice), she's below the $101,000 MLS threshold — no surcharge applies.
Combined: Sarah could save approximately $4,690/year by salary sacrificing into super and claiming her WFH deduction. Her effective tax rate drops from 24.3% to 19.6%.
Tax Savings Optimiser FAQ
Related Calculators
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Income Tax Calculator
Calculate your full income tax breakdown including Medicare, HECS, and offsets.
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Enter your desired take-home pay and find the gross salary you need to earn.
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Salary Sacrifice Calculator
Model different salary sacrifice amounts and see the impact on your take-home pay and super balance.
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MLS Calculator
Calculate your Medicare Levy Surcharge and compare the cost of private health insurance.