What's My Salary? How to Calculate Your Take-Home Pay After Tax and Medicare

What's My Salary? Understanding Your Take-Home Pay

When you ask "what's my salary?", you probably want to know the amount that actually lands in your bank account after tax and the Medicare levy. For Australian residents, your take-home pay depends on your gross income, the tax rates for the 2026–27 income year, and a few adjustments like tax offsets. This guide walks you through the calculation using official sources.

Start with Your Gross Salary

Your gross salary is the amount before any deductions. If your employment contract says "$80,000 plus super", that $80,000 is your gross salary. Superannuation (at 12% from 1 July 2026) is paid on top by your employer and does not reduce your take-home pay. If your salary is quoted as a package including super, you need to separate the super component first. For example, a $90,000 package with 12% super means your gross salary is about $80,357 and super is $9,643.

Apply the Income Tax Rates

The Australian Taxation Office publishes the resident tax rates for 2026–27. As shown on , the rates are:

• $0 – $18,200: Nil
• $18,201 – $45,000: 15c for each $1 over $18,200
• $45,001 – $135,000: $4,020 plus 30c for each $1 over $45,000
• $135,001 – $190,000: $31,020 plus 37c for each $1 over $135,000
• $190,001 and over: $51,370 plus 45c for each $1 over $190,000

These rates do not include the Medicare levy. To calculate your tax, find the bracket your taxable income falls into and apply the formula. For example, on a $60,000 salary:

• First $18,200: $0 tax
• Next $26,800 (up to $45,000): 15c = $4,020
• Remaining $15,000 (from $45,001 to $60,000): 30c = $4,500
• Total income tax: $8,520

Add the Medicare Levy

Most residents pay the Medicare levy of 2% of their taxable income. The guide confirms this. However, if you earn below certain thresholds, the levy is reduced or waived. For a single person, the latest published thresholds are $28,011 and $35,013. If your taxable income is under $28,011, you pay no Medicare levy. Between $28,011 and $35,013, you pay 10c per $1 over the lower threshold. Above $35,013, you pay the full 2% on your entire income.

For the $60,000 example, the Medicare levy is 2% of $60,000 = $1,200. So total tax plus Medicare is $8,520 + $1,200 = $9,720.

Claim Tax Offsets Like LITO

The Low Income Tax Offset (LITO) can reduce your tax. For 2026–27, the maximum offset is $700 for taxable incomes up to $37,500. It then phases out by 5c per $1 until $45,000, and then by 1.5c per $1 from $45,001 to $66,667. LITO can only reduce your tax to zero. For the $60,000 example, the offset is $325 minus 1.5c per $1 over $45,000 ($15,000 × 1.5c = $225), so $325 – $225 = $100. Your final tax after LITO is $8,520 – $100 = $8,420. Add Medicare levy of $1,200 gives total deductions of $9,620. Your annual take-home pay is $60,000 – $9,620 = $50,380, or about $1,938 per fortnight.

Use Benchmarks for Context

To see how your salary compares, check the Average pay benchmarks. The national minimum wage from 1 July 2026 is $26.44 per hour and $1,004.90 per week, which annualises to $52,255. The average full-time adult ordinary time earnings (excluding overtime and employer super) is $2,083.70 per week, or $108,352 per year. These figures come from Fair Work and the ABS.

What About Salary Packaging?

If you salary sacrifice (e.g., for a car or extra super), your taxable income reduces, which lowers your tax and Medicare levy. However, the items you sacrifice cannot also be claimed as a deduction. Use the Salary packaging guide to understand the impact.

Important Reminders

• This estimate is for residents only. It excludes HELP/HECS repayments, the Medicare levy surcharge (if you don't have private health insurance and earn over a threshold), and payroll tax-table rounding.
• Super is not deducted from your take-home pay if your salary is quoted as "plus super".
• The tax rates and thresholds are for the 2026–27 income year. Always check the ATO website for updates.

For a personalised calculation, use the Take-home pay calculator or the Clearance tool to see how different salaries stack up after tax and Medicare.