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) that includes salary and wages, tips and gratuities, bonuses, commissions, pensions, rent from investment properties, 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 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 2025/26 financial year for Australian residents, according to the ATO.

Australian income tax rates 2025–2026

Total
taxable income		 Tax
rate
$0 – $18,200 No tax
$18,201 – $45,000 16c for each $1
over $18,200
$45,001 – $135,000 $4,288 plus 30c
for each $1 over $45,000
$135,001 – $190,000 $31,288 plus 37c
for each $1 over $135,000
$190,001 and over $51,638 plus 45c
for each $1 over $190,000

Source: ATO, February 2026. Note: The rates in the above tables do not include the Medicare levy.

What is taxable income?

Your taxable income is the amount left after you claim a deduction for all the expenses you’re eligible for from your assessable, total income. Any deductions that you apply for can help reduce the amount of income you pay tax on.

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

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%.

How much income tax do I need to pay?

This will depend on factors 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’re 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 let you know 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 tax deducted from any of your income, had $1 or more of foreign income, pay or receive child support, or had business or investment income. Seek 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 one online with the ATO via the myGov portal 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 for apply for, are considered as part of your tax assessment, and whether or not you’re 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, such as claiming for eligible work-related expenses, gifts or donations made to eligible charities, union and professional membership fees and income protection insurance premiums. Plus, you may be eligible for tax offsets, such as the Low Income Tax Offset (LITO) or Seniors and Pensioners Tax Offset (SAPTO). You may also want to seek professional tax advice to help with your tax return.

What tax deadlines apply?

Tax return deadlines are usually determined by your filing method. Individuals who manage their own tax returns typically follow a standard annual deadline (e.g., 31 October 2025 for the 24-25 financial year), while those who use a registered tax agent may be eligible for extended lodgement schedules.

If a tax debt is owed, the payment deadline is generally linked to the date the return was lodged or the date the formal Notice of Assessment is issued by the ATO. Similar structures apply to business obligations, including Business Activity Statements (BAS) and Fringe Benefits Tax (FBT), where specific reporting cycles dictate when payments must be finalised.

To avoid potential interest charges, it’s important to confirm the exact due dates applicable to your specific circumstances via the ATO or a qualified tax professional.

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), you may consider visiting the ATO website or downloading the ATO app—as it features a key dates tool.

Content updated 6 February 2026

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

Nick-Whiting 200x200pxNick is Canstar’s Insurances Writer, providing assistance to Canstar’s Editorial Team in its mission to empower consumers to take control of their finances. He has written hundreds of articles for Canstar across all key finance topics.

Coming from a screenwriting background, Nick completed a Bachelor of Film, Television and New Media Production from Queensland University of Technology. Nick has also completed RG 146 (Tier 1), making him compliant to provide general advice for general insurance products like car, home, travel and health insurance, as well as giving him knowledge of investment options such as shares, derivatives, futures, managed investments, currencies and commodities.

Nick’s role at Canstar allows him to combine his love of the written word with his interest in finance, having learned the art of share trading from his late grandfather. Nick strives to deliver clear and straightforward content that helps the everyday consumer navigating the world of finance. Nick is also working on a TV series in his spare time. You can connect with Nick on LinkedIn.

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This page has been reviewed by our Finance Editor Jessica Pridmore as part of our fact-checking process.