How to Calculate Salary After Tax: Compare Job Offers by Take-Home Pay

Why take-home pay matters when comparing job offers

When you receive a job offer, the headline salary can be misleading. What really matters is the amount that lands in your bank account each pay period – your take-home pay after income tax and the Medicare levy. This guide shows you how to calculate salary after tax so you can compare offers fairly.

How to calculate salary after tax using ATO rates

The Australian Taxation Office publishes resident tax rates for each income year. For 2026–27, the rates are:

• $0 – $18,200: Nil
• $18,201 – $45,000: 15c for each $1 over $18,200
• $45,001 – $135,000: $4,020 plus 30c for each $1 over $45,000
• $135,001 – $190,000: $31,020 plus 37c for each $1 over $135,000
• $190,001 and over: $51,370 plus 45c for each $1 over $190,000

These rates do not include the Medicare levy of 2%. Tax and Medicare explains how both work together.

Step 1: Know your gross annual salary

Your gross salary is the amount before any deductions. If you are paid hourly, multiply by your weekly hours (usually 38) and by 52 weeks. For example, the national minimum wage is $26.44 per hour and $1,004.90 per week, giving an annual gross of $52,255.

Step 2: Apply the 2026–27 resident tax rates

Using the ATO rates, calculate the tax on your taxable income. For $52,255:

• First $18,200: $0 tax
• Next $26,800 (up to $45,000): $4,020 tax
• Remaining $7,255: $2,176.50 tax
• Total tax before offsets: $6,196.50

Step 3: Subtract the Medicare levy

The Medicare levy is 2% of taxable income for most people. For $52,255, that is $1,045.10. If your income is below $28,011 (single), you pay no levy. Between $28,011 and $35,013, the levy is reduced. Full-time salaries almost always exceed $35,013, so you pay the full 2%.

Step 4: Consider the Low Income Tax Offset (LITO)

LITO reduces your tax bill. For 2026–27, the maximum offset is $700 for taxable incomes up to $37,500. It then phases out. At $52,255, you receive about $216, reducing your tax to $5,980.33. After adding the Medicare levy, total deductions are about $7,025.43, leaving take-home pay of approximately $45,229.57.

Step 5: Remember super is separate

Superannuation is not deducted from your take-home pay. The employer pays 12% on top of your salary (up to $270,830). When comparing offers, check if the salary is 'plus super' or 'including super'. Take-home pay has more on this.

Using the Moneysmart income tax calculator

The income tax calculator is a free tool that does the maths for you. Enter your taxable income, and it shows your income tax, Medicare levy, and after-tax amount. It uses the same ATO rates and Medicare thresholds. The calculator is updated for the latest tax year. provides a quick estimate, but remember it does not include tax offsets like LITO automatically – you need to factor those in separately.

Example: minimum wage take-home

For the national minimum wage of $26.44 per hour ($1,004.90 per week), annual gross is $52,255. After tax and Medicare (including LITO), your take-home is roughly $45,230 per year, or about $1,739 per fortnight. This is an estimate only – your actual pay may vary due to rounding, HELP repayments, or other factors.

How to compare job offers

When you have two offers, calculate salary after tax for each. Use the ATO tax rates or the Moneysmart calculator. Also consider:

• Super guarantee (12% from 1 July 2026)
• Salary packaging options (e.g., novated leases)
• Medicare levy surcharge if you earn over $90,000 and don't have private hospital cover
• Study and training loan repayments (HELP, etc.)

Minimum wage and Average pay can give you benchmarks for your industry.