Calculation Methodology
How we calculate your income tax, Medicare levy, HECS/HELP repayments, and more.
Overview
Our calculator follows the same methodology used by the Australian Taxation Office (ATO) for calculating PAYG withholding amounts. All rates, thresholds, and formulas are sourced directly from official ATO publications.
Calculation Pipeline
1. Parse Inputs — Normalise salary to annual amount based on pay frequency. If “includes super”, extract base salary.
2. Calculate Taxable Income — Gross salary minus salary sacrifice and work-related deductions (floor at $0).
3. Calculate Income Tax — Apply progressive bracket rates based on financial year, residency status, and tax-free threshold status.
4. Apply Tax Offsets — Reduce tax by LITO and SAPTO (non-refundable, floor at $0).
5. Medicare Levy — 2% for residents, with low-income reduction. Exempt for non-residents and WHMs.
6. Medicare Levy Surcharge — Applied if no private health insurance and income exceeds threshold.
7. HECS/HELP — Flat rate (FY 2024-25) or marginal rate (FY 2025-26) based on repayment income.
8. Superannuation — Employer SG at legislated rate, plus salary sacrifice. Concessional cap check.
9. Aggregate — Total tax, net take-home pay, effective and marginal rates.
Data Sources
- ATO — Individual income tax rates (residents)
- ATO — Foreign resident tax rates
- ATO — Medicare levy
- ATO — Medicare Levy Surcharge
- ATO — Study and training support loans
- ATO — Tax offsets
Limitations
This calculator provides estimates only. It does not account for: reportable fringe benefits, net investment losses, foreign income, capital gains, private health insurance rebate adjustments, or family-based Medicare thresholds. Individual circumstances may vary — consult a registered tax agent for personalised advice.