How to calculate your OTE salary after tax in Australia

Understanding your take-home pay

When you receive a job offer or check your payslip, the figure that matters most is what actually reaches your bank account. In Australia, your gross salary is reduced by income tax and the Medicare levy. This guide explains how to estimate your after-tax salary for the 2026–27 tax year.

The key components

Your take-home pay depends on your taxable income, which is your gross salary minus any deductions (such as salary sacrifice or work-related expenses). From that, the Australian Taxation Office (ATO) applies:

• Income tax using the progressive tax rates.
• Medicare levy at 2% (with low-income exemptions).
• Low Income Tax Offset (LITO) which reduces your tax if you earn below $66,667.

Your employer also contributes superannuation at 12% (from 1 July 2026) on top of your salary, but this does not come out of your pay unless you salary sacrifice.

How to estimate your after-tax pay

Start with your annual gross salary. For example, if your OTE salary is $80,000, you can calculate:

1. Taxable income: Assume no deductions, so $80,000.
2. Income tax: Using the 2026–27 rates:

• $0–$18,200: nil
• $18,201–$45,000: 15c per $1 over $18,200 = ($45,000-$18,200)*0.15 = $4,020
• $45,001–$80,000: 30c per $1 over $45,000 = ($80,000-$45,000)*0.30 = $10,500
• Total tax before offsets = $4,020 + $10,500 = $14,520

3. LITO: For $80,000, LITO is $325 minus 1.5c per $1 over $45,000. Over $45,000 by $35,000, so reduction = $35,000*0.015 = $525. $325 - $525 = -$200, so no LITO. (LITO phases out completely at $66,667.)
4. Medicare levy: 2% of $80,000 = $1,600 (full rate, as above $35,013).
5. Total deductions: $14,520 + $1,600 = $16,120.
6. Take-home pay: $80,000 - $16,120 = $63,880 per year, or about $2,456 per fortnight.

This is an estimate only. Your actual tax may vary due to rounding, HELP/HECS repayments, or the Medicare levy surcharge.

The Medicare levy thresholds

For single people, the latest published thresholds are $28,011 and $35,013. If your taxable income is below $28,011, you pay no Medicare levy. Between $28,011 and $35,013, you pay 10c per $1 over the lower threshold. Above $35,013, you pay the full 2%.

The Low Income Tax Offset (LITO)

The LITO for 2026–27 provides a maximum offset of $700 for taxable incomes up to $37,500. It then reduces by 5c per $1 until $45,000, and then by 1.5c per $1 until $66,667. The offset cannot reduce your tax below zero.

Superannuation and your take-home pay

If your salary is advertised as "plus super", the super guarantee is not deducted from your pay. Your employer pays it on top. However, if you choose to salary sacrifice additional super, that reduces your taxable income and therefore your take-home pay. The standard super guarantee rate is 12% from 1 July 2026, up to a maximum contribution base of $270,830.

Benchmark figures

Fair Work Ombudsman sets the national minimum wage at $26.44 per hour and $1,004.90 per week (from 1 July 2026). The ABS reports average weekly total earnings for all employees at $1,579.20, and full-time adult ordinary time earnings at $2,083.70 per week (May 2026, seasonally adjusted). These benchmarks help you compare your OTE salary to the broader market.

Important notes

This guide is for resident employees only. It excludes HELP/HECS repayments, the Medicare levy surcharge, salary sacrifice arrangements, and payroll tax-table rounding. Always use the Clearance tool for a personalised estimate, and refer to the Tax and Medicare page for official rates.