How to Compare Job Offers Using Take-Home Pay and Salary Continuance Insurance
Pay varies by role and industry; the national minimum wage is $26.44 per hour ($1,004.90 per week), but most full-time roles pay above this.
How to Compare Job Offers Using Take-Home Pay and Salary Continuance Insurance
When you receive a job offer, the headline salary is only part of the picture. What matters most is the amount that reaches your bank account each fortnight after income tax and the Medicare levy. This is your take-home pay. Understanding how to calculate it—and factoring in benefits like salary continuance insurance—helps you compare offers accurately.
Start with the gross annual salary
Your employer may quote a figure as ‘plus super’ or ‘including super’. Superannuation is paid on top of your salary at 12% from 1 July 2026, up to a maximum contribution base of $270,830. If the offer says ‘$90,000 plus super’, your gross salary is $90,000 and super is extra. If it says ‘$90,000 including super’, your gross salary is about $80,357 and super makes up the rest. Always clarify which figure you are comparing.
Calculate tax and the Medicare levy
For the 2026–27 tax year, the tax-free threshold is $18,200. Above that, you pay:
- 15c for each dollar over $18,200 up to $45,000
- $4,020 plus 30c for each dollar over $45,000 up to $135,000
- $31,020 plus 37c for each dollar over $135,000 up to $190,000
- $51,370 plus 45c for each dollar over $190,000
You also pay the Medicare levy at 2% of your taxable income. The latest single-person Medicare thresholds are $28,011 and $35,013. If your income is between these amounts, you pay a reduced rate (10c per dollar over the lower threshold). Full-time salaries almost always pay the full 2%.
The Low Income Tax Offset (LITO) can reduce your tax by up to $700 if your taxable income is $37,500 or less, phasing out completely by $66,667. Use the Take-home pay calculator to see your exact after-tax amount.
Factor in salary continuance insurance
Salary continuance insurance (also called income protection) is a common workplace benefit. If you pay premiums from your after-tax income, you can claim a deduction for them. The Australian Taxation Office confirms that only the portion covering lost income is deductible—not cover for injury or trauma. For example, if you pay $250 a month and $175 is for income protection, you can deduct $175. This reduces your taxable income and boosts your take-home pay.
If your salary continuance insurance is through your super fund, premiums are deducted from your super balance. They are not deductible and do not affect your take-home pay. However, they reduce your retirement savings. The Moneysmart website explains that insurance through super can be cheaper and easier to get, but default cover may not suit your needs and cover can end if your account becomes inactive.
Compare offers on a like-for-like basis
To compare two job offers, convert each to an annual take-home amount. Include:
- Gross salary
- Less income tax (after LITO if applicable)
- Less Medicare levy (full 2% for most full-time workers)
- Plus any tax savings from deductible salary continuance insurance premiums
- Plus any other salary packaging benefits
Then divide by 26 to get your fortnightly take-home pay. This is the number that matters for your budget.
Use the benchmarks
The national minimum wage is $26.44 per hour and $1,004.90 per week (from 1 July 2026). The average full-time adult ordinary time earnings are $2,083.70 per week, according to the ABS. Use these as reference points when evaluating an offer.
Remember super is separate
Super is not part of your take-home pay. It is paid into your super fund and generally cannot be accessed until retirement. When comparing offers, look at the total remuneration package: salary plus super plus any insurance benefits. But for day-to-day living, focus on the after-tax amount.
Get professional advice if needed
Tax and insurance rules can be complex. If you have a HELP/HECS debt, a Medicare levy surcharge, or salary sacrifice arrangements, your take-home pay will differ. The Super guide and Tax and Medicare page provide more detail. For disputes about income protection claims through super, the Australian Financial Complaints Authority (AFCA) can help.
By focusing on take-home pay and understanding how salary continuance insurance affects your finances, you can make a confident decision between job offers.
Questions
What is salary continuance insurance?
Salary continuance insurance, also known as income protection insurance, pays you a regular income if you cannot work due to illness or injury. It typically replaces up to 75% of your pre-disability earnings for a set period, such as two years or until age 65. Premiums paid outside super are tax-deductible, but if the cover is through your super fund, premiums are deducted from your super balance and are not deductible.
How does salary continuance insurance affect my take-home pay?
If you pay premiums for salary continuance insurance from your after-tax income, you can claim a deduction for those premiums, which reduces your taxable income and increases your take-home pay. However, if the cover is through super, premiums reduce your super balance but do not affect your take-home pay directly. Any benefits you receive under the policy are assessable as income and must be included in your tax return.
Should I get salary continuance insurance through super or outside?
It depends on your circumstances. Insurance through super can be cheaper because funds buy cover in bulk, and premiums are paid from your super balance, not your take-home pay. However, it reduces your retirement savings and cover may end if your account becomes inactive. Outside super, premiums are tax-deductible and you have more control over the policy, but you pay from after-tax income. Compare the costs, benefits, and tax implications before deciding.