Canstar’s Income Tax Calculator calculates the tax payable on gross wages paid in equal weekly amounts. The rates are obtained from the Australian Taxation Office (ATO). No allowance is made for tax deductions, Medicare or other levies and/or payments.

What is income tax?

Income tax is a type of tax you pay to the Australian Government on income you’ve earned from a job or your investments, such as shares and Exchange Traded Funds (ETFs). Income tax is worked out based on what you earn during a financial year – from 1 July one year to 30 June the next year – and any tax deductions or tax offsets you can claim during that time.

How is income tax calculated?

Income tax in Australia is calculated based on your total taxable income and the relevant tax rate that applies to you based on factors such as your residency status. Australia’s progressive tax system means that if you earn more, you’ll usually need to pay more in income tax.

If you’re an Australian resident for tax purposes, you’ll be taxed on your worldwide income (from Australian and overseas) on income that includes salary and wages, tips and gratuities, bonuses, commissions, pensions, rent, overtime payments, work allowances and interest from bank accounts each financial year.

How do I calculate my income tax?

Canstar has an income tax calculator (above) that can help you to work out your approximate income tax for the current financial year. The income tax calculator calculates the tax payable on gross wages paid in equal weekly amounts. The rates are obtained from the Australian Taxation Office (ATO). No allowance is made for tax deductions, Medicare or other levies and/or payments.

What are the income tax rates?

These are the income tax rates and brackets for the 2022/23 financial year for Australian residents, according to the ATO.

Australian income tax rates 2022–2023

Total taxable income Tax rate
$0 – $18,200 No tax
$18,201 – $45,000 19c for each $1
over $18,200
$45,001 – $120,000 $5,092 plus 32.5c
for each $1 over $45,000
$120,001 – $180,000 $29,467 plus 37c
for each $1 over $120,000
$180,001 and over $51,667 plus 45c
for each $1 over $180,000

Source: ATO, April 2023. Note: The rates in the above tables do not include the Medicare levy of 2%.

What is taxable income?

The ATO says your taxable income is the amount left after you claim a deduction for all the expenses you can from your assessable income. Any deductions that you apply reduce the amount of income you pay tax on.

How much do I have to earn to pay income tax?

The ATO says you have to pay income tax on every dollar you earn over $18,200, known as your tax-free threshold. 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%.

Visit our Tax Hub

How much income tax do I need to pay?

How much income tax you need pay depends on your personal situation such as your residency status, taxable income, and the tax rate and bracket that apply to you. When you complete a tax return, this will help the ATO tell you if you’ve paid too much or too little in tax.

What is a tax return?

A tax return is a form you can complete online or by paper that details things such as your income, any tax you may have already paid and any deductions you are claiming for the financial year. The form is submitted to the ATO so it can use the information to determine how much tax you should have paid. Your tax return can help make sure you get a refund if you’ve paid too much tax during the year, or if you owe any extra tax to the ATO.

Do I need to do a tax return?

The ATO says there are several reasons why you may need to do a tax return. For example, if you’ve earned more than the tax free threshold and had any tax taken deducted from any income, had $1 or more of foreign income, pay or receive child support, or had business or investment income. You should seek some professional tax advice if you’re not sure whether you should lodge a return, or you can use the ATO’s online tool: Do I need to lodge a tax return?.

How do I do a tax return?

There are a number of ways you can lodge a tax return. You can lodge a tax return online with the ATO or through a tax agent. It’s also possible to lodge a return via a paper form but this process may take longer. The ATO generally prefers to deliver refunds electronically and will only make payments into Australian bank accounts.

How much tax will I get back?

You may or may not get some money back after completing and lodging your tax return. Your income tax bracket and rate applicable for the financial year, as well as any tax deductions – including those without a receipt plus work-related tax deductions – are considered as part of your tax assessment, and whether or not you are eligible for a tax refund.

What can I do to boost my tax return?

There are a number of ways you may be able to claim a tax deduction to help boost your tax return. Plus, you may be eligible for tax offsets, such as the Low and Middle Income Tax Offset. You may want to seek some specialised tax advice to help with your tax return.

What tax deadlines apply?

Different due dates apply for tax returns in Australia, and these can vary depending on whether you do your own tax return or use a registered tax agent. Registered tax agents generally have special lodgement schedules that apply. There are due dates for paying the ATO if you owe money as part of your tax assessment.

Generally if you submit on or before lodgement due dates, any tax you owe needs to be paid to the ATO on the later of 21 days after the relevant lodgement date, or when the notice of assessment is received. Tax due dates apply for businesses too, including for business activity statements (BAS) and fringe benefits tax annual returns.

How can I keep track of tax due dates?

If you’re an individual taxpayer, small business owner or even a trustee of a self-managed super fund (SMSF) trustee, you may consider downloading the ATO app. It features a key dates tool. You can also use the Canstar App (powered by Frollo) that enables you to track tax-deductible expenses, as do various other budgeting and savings apps.

Where can I find more tax information?

The ATO has plenty of information about tax. Thinking about your tax return? As well as our pay calculator, Canstar has a Tax Hub with expert insights and feature articles on topics for this tax time. You can find out about a variety of tax-related topics, such as:

Content updated 6 April 2023

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.


About the author

Michael LundMichael Lund is a Senior Finance Journalist with Canstar. He is an award-winning journalist with more than three decades of experience and has written articles covering superannuation, savings, wealth, life insurance and home loans. His work’s been referenced by a number of other finance publications, including Yahoo Finance and The Motley Fool.

Michael’s worked as a reporter and producer for the BBC and ABC, including for Australian Story. He’s also worked as a feature writer for The Courier-Mail and as a science and technology editor and commissioning editor at The Conversation.

Michael’s professional awards include a Queensland Media Award and a highly commended in the Walkleys. In 2021 he was part of a team that was a finalist in the Australian Museum Eureka Prize for Science Journalism. He holds a Bachelor of Science in mathematics and applied physics (Manchester Metropolitan University) and a Masters of Science in pure mathematics (Liverpool University).

You can connect with Michael on LinkedIn.

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This page has been reviewed by our Digital Editor Amanda Horswill as part of our fact-checking process.


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