Income tax
How is it calculated?
On a marginal basis: each band of income is taxed at its own rate, so a pay rise is taxed at your top rate rather than the average one.
CALCULATOR
What actually lands in your account?
Lenders assess what you earn. Your budget runs on what you keep.
RUN THE NUMBERS
Estimate your take-home pay
Income tax, the Medicare levy, the low income tax offset and compulsory study loan repayments, on the ATO scale. Two income years are included so you can see the difference between them.
Salary or wages before tax, not including employer superannuation.
Work-related expenses and other deductions, for the year.
What else applies
HECS-HELP and the other study loans. The compulsory repayment is worked out from your income, not your balance.
Turn this off only if you hold a Medicare levy exemption.
Take-home pay
$84,280
a year
$7,023 a month · $3,242 a fortnight · $1,621 a week
- Total tax and levies
- $25,720
- Effective rate
- 23.4%
- Marginal rate
- 32%on your next dollar
- Taxable income
- $110,000
- Gross income
- $110,000
- Income tax
- $23,520
- Medicare levy
- $2,200
- Take-home
- $84,280
- Take-home$84,280
- Income tax$23,520
- Medicare levy$2,200
Not included: the Medicare levy surcharge, family and seniors levy thresholds, offsets other than the low income tax offset, and anything to do with business, trust or capital gains income. We are mortgage brokers, not tax agents — this is here to help you sanity-check a payslip, not to prepare a return.
Talk to us about what this supportsWhat this calculation assumes
- Australian resident for tax purposes, for a full income year. Part-year residents and working holiday makers are taxed on different scales entirely.
- The Medicare levy uses the single low-income thresholds. Family thresholds, the increase for each dependent child, and the seniors and pensioners thresholds are not applied.
- The Medicare levy surcharge is not calculated. It applies above an income threshold to people without an appropriate level of private hospital cover.
- The low income tax offset is the only offset applied. The seniors and pensioners offset, the private health insurance rebate and the zone and overseas forces offsets are not.
- Employer superannuation is not part of the income figure and is not taxed here. Salary sacrifice, reportable fringe benefits and reportable super contributions are not modelled, and they can change both the levy and a study loan repayment.
- Business, trust, partnership and capital gains income are outside what this calculates. We are mortgage brokers, not tax agents — for anything beyond a payslip, talk to one.
Rates and thresholds: 2026-27 income year, from Australian Taxation Office. Checked 27 August 2026. Verify against the source before you rely on them.
WHAT IT TELLS YOU
Net income is the figure your household budget actually runs on
Gross salary is what a lender starts with. What matters for whether you can comfortably meet a repayment is what remains after income tax, the Medicare levy and any compulsory study loan repayment.
The gap between the two is substantial, and it widens as income rises through the marginal rate bands. Budgeting from a gross figure is one of the more common ways households overcommit.
For anyone with a HECS or HELP balance, the compulsory repayment is worth understanding specifically — it reduces take-home pay and it reduces assessed borrowing capacity.
WHAT MOVES THE NUMBER
What comes out
Medicare levy
What else is withheld?
A levy applied to most taxpayers, with reductions or exemptions at lower incomes, and a surcharge for higher earners without appropriate private hospital cover.
Study loan repayments
How does HECS affect you?
Compulsory repayments begin once income passes a threshold, rising in steps as income increases. They reduce both take-home pay and borrowing capacity.
READING THE RESULT
An estimate is a starting point, not an answer
What the calculation covers
- An estimate of tax payable — on the income figure you enter.
- Net take-home pay — which is the number your budget should use.
- The effect of a study loan — where the calculation includes it.
What a lender does differently
- Deductions are not included — work expenses and offsets change the final position.
- Rates and thresholds change — tax settings are revised between financial years.
- Other income is not captured — investments, rent and side income all affect the outcome.
- Salary packaging changes things — as does income from a business structure.
COMMON QUESTIONS
Questions about this calculation
Is this the same figure the ATO will assess?
No. A calculator produces an estimate from a single salary figure. Your actual position depends on deductions, offsets, other income and your full circumstances.
For anything beyond a rough guide, speak to your accountant or use the ATO's own tools.
How does HECS or HELP debt affect a home loan?
The compulsory repayment reduces your net income, and lenders treat it as an ongoing commitment when assessing serviceability, which reduces borrowing capacity.
Lenders differ in how they treat balances close to being paid out, which occasionally makes a practical difference.
Should I use gross or net income for budgeting?
Net, always. Gross income overstates what you have available by a significant margin, particularly at higher income levels.
Lenders work from gross with their own assessment overlay, which is a different exercise from your household budget.
Does salary packaging help my borrowing capacity?
It can, but lenders treat packaged benefits inconsistently — some add them back, some discount them, some disregard them entirely.
If a meaningful part of your remuneration is packaged, it is worth choosing a lender whose policy handles it well.
OTHER CALCULATORS
Other numbers worth running
GET IN TOUCH
Want your real position assessed the way a lender will?
Would rather talk it through?
(02) 9659 1694Important information
This page explains a calculation. Any figures you produce from it are estimates based on the assumptions described, not a quote, an offer of credit, or an indication that finance will be approved.
The information on this page is general in nature. It has been prepared without taking your objectives, financial situation or needs into account, so it is not personal advice and you should consider whether it is appropriate for you before acting on it.
Any rates, figures or examples shown are indicative only. Lending is subject to approval, and lender eligibility criteria, terms, conditions, fees and charges apply. Talk to us about what your own circumstances allow.