Tax & Pay Calculator

Expecting a pay rise soon? How much of that will remain in your own pocket and how much will be diverted to the tax office? Try our income tax calculator to find out. Simply enter your gross (before tax) income to find out how much net cash in hand it will equate to.

The income tax calculator calculates the tax payable on gross wages paid in equal weekly amounts. The rates are obtained from the Australian Tax Office. No allowance is made for tax deductions, Medicare or other levies &/or payments.

How is income tax calculated and what is the rate of income tax?

We love to hate it, but taxes keep our public services alive. The government hopes to collect tens of billions in taxation revenue each year  – although the 2015 federal budget has reduced the expected revenue over the next few years; overall, tax receipts as a per cent of GDP are expected to be 22.3 per cent in 2015/16. This represents total taxation receipts of around $370 billion.

How much of that will you be contributing?  For individual taxpayers who are Australian residents for tax, the following rates apply for the 2015/16 financial year.

Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000

Source: ato.gov.au

How much do you have to earn to pay tax?

You have to pay income tax on every dollar over $18,200 that you earn; earnings below that are tax-free.

In addition to the rates in the table above, most taxpayers are also charged a Medicare levy of 2%, as well as a Temporary Budget Repair Levy; this levy is payable at a rate of 2% for taxable incomes over $180,000.

Children under 18 who earn “unearned income” (that is, income that does not relate to employment, compensation or the proceeds of an estate – click here for a full definition of unearned income) are subject to a higher tax rate of up to 66%. Please discuss this issue with your registered tax adviser if you have a child who may be in this situation.

 

What is taxable income?

Income tax is applied to “taxable income”. So: what is your taxable income?  The ATO defines taxable income as follows:

Your taxable income is the income you have to pay tax on. It is the term used for the amount left after you have deducted all the expenses you are allowed to claim from your assessable income. Assessable income – allowable deductions = taxable income.

Following on from that, the ATO offers the following examples of assessable income:

  • salary and wages
  • interest from bank accounts
  • dividends and other income from investments
  • bonuses and overtime an employee receives
  • commission a salesperson receives
  • government payments such as the age pension, newstart allowance and youth allowance
  • rent

Some income streams, such as some allocated pensions, some government pensions and some education payments are not assessable income.

Don’t begrudge the ATO your income tax contributions; according to the recent federal budget projections they will need approximately $450 billion next year to keep our country ticking along. Every dollar counts!

Please note that the information on this page and site is general information only and should not be used as the basis for any tax-related decision making. Please discuss your personal situation with a registered tax agent or other qualified tax adviser.