Tax & Pay Calculator 2021
- How is income tax calculated and what is the rate of income tax?
- How much do you have to earn to pay tax?
- What is taxable income?
- How much tax do I need to pay?
- Where can I find more tax information?
How is income tax calculated and what is the rate of income tax?
How much tax will you be contributing? For individual taxpayers who are Australian residents for tax purposes, the following rates apply for the 2020/21 financial year.
|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|
→Related article: Income Tax Brackets and Rates in Australia: 2020/2021
How much do you have to earn to pay tax?
The ATO advises you will 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%. You can find out more about the tax-free threshold.
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.’
How much tax do I need to pay?
How much tax you need to pay will depend on your personal circumstances. For Australian residents for tax purposes, the income you earn worldwide (from Australia and overseas) from this list that exceeds the tax-free threshold of $18,200 can be taxed. This applies whether it’s paid in cash, cheque or electronically.
- Salary and wages
- Tips and gratuities
- Interest from bank accounts
- Work allowances, such as for travel, clothing, laundry and your vehicle
- Dividends and capital gains from your investments
- Overtime payments
Where can I find more tax information?
The Australian Taxation Office (ATO) website has information for Australians about tax. Thinking about your tax return? As well as our pay calculator, Canstar has a new 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:
- how to lodge a tax return
- work-from-home tax deductions
- private health insurance and tax
- capital gains tax
- what investing in shares and ETFs may mean for your tax
- second incomes and tax
- the luxury car tax
- transferring a UK pension to your Australian super fund
- Australia’s marginal tax rates
- life insurance premiums and tax
- getting your tax refund each pay day
- CGT when selling a property
- CGT on deceased estate property
- 5 smart ways to spend your tax refund
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.