Income Tax Calculator – Simplify Your Tax Estimates

To calculate your income tax, apply the ATO’s resident tax rates to your taxable income (gross income minus deductions). For 2024-25, the tax-free threshold is $18,200, with progressive rates above that.

Tax Rates 2024-25 (Residents):

• $0 – $18,200: 0%
• $18,201 – $45,000: 19% on amount over $18,200
• $45,001 – $120,000: $5,092 + 32.5% on amount over $45,000
• $120,001 – $180,000: $29,467 + 37% on amount over $120,000
• $180,001+: $51,667 + 45% on amount over $180,000

Example Calculation:

Given:

• Taxable income = $60,000
  Step 1: $0 – $18,200 = $0 tax
  Step 2: $18,201 – $45,000 = $26,799 × 19% = $5,091.81
  Step 3: $45,001 – $60,000 = $15,000 × 32.5% = $4,875
  Total tax = $5,091.81 + $4,875 = $9,966.81

Your income tax is approximately $9,967 for 2024-25.

Key Insights:

• Tax is calculated only on income above $18,200.
• Higher income pushes you into higher tax brackets.
• This excludes the Medicare Levy (typically 2%).

The Medicare Levy (2% of taxable income) funds healthcare and is added to your income tax, with exemptions or reductions based on income thresholds.

Example Calculation:

Given:

• Taxable income = $60,000
• Income tax = $9,966.81 (from FAQ 1)
  Medicare Levy = $60,000 × 2% = $1,200
  Total tax = $9,966.81 + $1,200 = $11,166.81

Results:

• Without Levy: $9,966.81
• With Levy: $11,166.81

Key Insights:

• The Levy adds a flat 2% unless you’re below $24,276 (single, 2024-25) or qualify for reductions.
• Private health insurance may reduce the Medicare Levy Surcharge (MLS), not the base Levy.
• Check ATO thresholds annually for exemptions.

Gross income is your total earnings (salary, investments, etc.), while taxable income is gross income minus allowable deductions (e.g., work expenses, donations).

Example Calculation:

Given:

• Gross income = $70,000
• Deductions = $5,000 (e.g., work-related costs)
  Taxable income = $70,000 – $5,000 = $65,000
  Tax on $65,000:
• $5,092 + ($65,000 – $45,000) × 32.5% = $5,092 + $6,500 = $11,592

Results:

• Gross income tax (no deductions): $12,842
• Taxable income tax: $11,592 (saves $1,250)

Key Insights:

• Deductions lower your tax bill by reducing taxable income.
• Keep receipts—only legitimate deductions count.
• Common deductions include uniforms, training, and charity.

Tax offsets (e.g., Low Income Tax Offset, LITO) directly reduce your tax payable, not your taxable income, up to a maximum amount.

Example Calculation:

Given:

• Taxable income = $40,000
• Tax = $4,142 ($18,201 – $40,000 × 19%)
• LITO 2024-25: $700 (full amount if income ≤ $37,500, tapers to $0 at $66,667)
  Adjusted LITO = $700 – [($40,000 – $37,500) × 5%] = $700 – $125 = $575
  Tax after offset = $4,142 – $575 = $3,567

Results:

• Without offset: $4,142
• With LITO: $3,567

Key Insights:

• Off “

sets can’t reduce tax below $0.

• LITO helps low earners; other offsets (e.g., seniors) may apply.
• Check eligibility—offsets phase out with higher income.

Overtime increases your taxable income, potentially pushing you into a higher tax bracket, increasing your overall tax rate.

Example Calculation:

Given:

• Base salary = $50,000 (tax = $7,717)
• Overtime = $10,000
  Total income = $60,000
  Tax = $9,966.81 (from FAQ 1)
  Extra tax = $9,966.81 – $7,717 = $2,249.81

Results:

• Base tax: $7,717
• With overtime: $9,966.81

Key Insights:

• Overtime is taxed at your marginal rate (e.g., 32.5% here).
• More income doesn’t tax your whole salary at the higher rate—just the excess.
• Plan for a bigger tax bill or adjust withholdings.

Investment income (e.g., dividends, rental income) is added to your taxable income and taxed at your marginal rate.

Example Calculation:

Given:

• Salary = $50,000 (tax = $7,717)
• Rental income = $15,000
  Total income = $65,000
  Tax = $11,592 (from FAQ 3)
  Tax on investment = $11,592 – $7,717 = $3,875

Results:

• Salary only: $7,717
• With investment: $11,592

Key Insights:

• Investment income can bump you into a higher bracket.
• Deductions (e.g., rental repairs) can offset this.
• Franked dividends may include tax credits (franking credits).

A salary increase raises your taxable income, increasing tax at your marginal rate and possibly shifting brackets.

Example Calculation:

Given:

• Current salary = $45,000 (tax = $5,092)
• Increase = $10,000
  New salary = $55,000
  Tax = $8,967 ($5,092 + $10,000 × 32.5%)

Results:

• Old tax: $5,092
• New tax: $8,967 (extra $3,875)

Key Insights:

• Net gain after tax = $10,000 – $3,875 = $6,125.
• Higher brackets don’t retroactively tax lower income.
• Adjust PAYG withholdings to avoid a tax bill.

The MLS (1%-1.5% of income) applies if you earn above $97,000 (single, 2024-25) without private hospital cover.

Example Calculation:

Given:

• Income = $100,000
• Tax = $22,967
• MLS threshold = $97,000
  MLS = ($100,000 – $97,000) × 1% + $97,000 × 1% = $30 + $970 = $1,000
  Total = $22,967 + $1,000 = $23,967

Results:

• Without MLS: $22,967
• With MLS: $23,967

Key Insights:

• MLS rises to 1.25% at $114,000, 1.5% at $144,000.
• Private cover can exempt you—compare costs.
• Applies to total income, not just salary.

Deductions reduce taxable income, lowering tax at your marginal rate.

Example Calculation:

Given:

• Income = $60,000 (tax = $9,966.81)
• Deductions = $2,000
  New taxable income = $58,000
  Tax = $9,317 ($5,092 + $13,000 × 32.5%)
  Savings = $9,966.81 – $9,317 = $649.81

Results:

• Without deductions: $9,966.81
• With deductions: $9,317

Key Insights:

• $2,000 saves $650 (32.5% rate)—higher rates save more.
• Must be work-related and substantiated.
• Over-claiming risks ATO audits.

Non-residents pay tax on Australian-sourced income with no tax-free threshold, starting at 32.5%.

Example Calculation:

Given:

• Income = $60,000
  Resident tax = $9,966.81
  Non-resident tax = $60,000 × 32.5% = $19,500

Results:

• Resident: $9,966.81
• Non-resident: $19,500

Key Insights:

• Non-residents pay ~double at this income.
• No Medicare Levy for non-residents.
• Residency status hinges on time in Australia (183+ days).

A bonus is added to taxable income and taxed at your marginal rate.

Example Calculation:

Given:

• Salary = $50,000 (tax = $7,717)
• Bonus = $5,000
  Total = $55,000
  Tax = $8,967
  Bonus tax = $8,967 – $7,717 = $1,250

Results:

• Without bonus: $7,717
• With bonus: $8,967

Key Insights:

• Bonus tax = $5,000 × 32.5% here.
• PAYG may over-withhold—claim back at tax time.
• Spread bonuses across years if possible to lower rates.

Negative gearing (rental losses) reduces taxable income, lowering your tax bill.

Example Calculation:

Given:

• Salary = $60,000 (tax = $9,966.81)
• Rental income = $10,000, expenses = $15,000
  Loss = $5,000
  New taxable income = $60,000 – $5,000 = $55,000
  Tax = $8,967
  Savings = $9,966.81 – $8,967 = $999.81

Results:

• Without loss: $9,966.81
• With loss: $8,967

Key Insights:

• $5,000 loss saves ~$1,000 at 32.5%.
• Only applies to investment properties.
• Future capital gains may offset these benefits.