Australian Salary Guide: How to Work Out Your Take-Home Pay After Tax and Medicare

How to Estimate Your Take-Home Pay

When you see a salary figure in a job ad or contract, the amount that actually lands in your bank account each pay period is less than the headline number. Income tax and the Medicare levy are withheld by your employer under the PAYG system. This guide walks you through the key factors so you can work out your own take-home pay.

Start With Your Gross Annual Salary

Your gross salary is the amount before any deductions. For example, the national minimum wage set by Fair Work is $26.44 per hour or $1,004.90 per week, which works out to about $52,255 a year for a full-time worker (38 hours a week, 52 weeks). If you earn more, your gross salary is whatever your employment agreement says.

Apply the 2026–27 Income Tax 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. To estimate your income tax, subtract the tax-free threshold from your taxable income, then apply the marginal rate for each bracket. For a salary of $80,000, the tax would be $4,020 plus 30c on the $35,000 above $45,000, which equals $4,020 + $10,500 = $14,520.

Subtract the Medicare Levy

The Medicare levy is an additional 2% of your taxable income, unless you are on a low income. For the 2026–27 year, the latest single-person thresholds are $28,011 and $35,013. If you earn below $28,011, you pay no levy. Between $28,011 and $35,013, the levy is phased in at 10 cents per dollar over the lower threshold. Above $35,013, the full 2% applies. For a salary of $80,000, the Medicare levy is $1,600.

Claim the Low-Income Tax Offset (LITO)

The Low-Income Tax Offset reduces the tax you owe, but it cannot reduce your tax below zero. For 2026–27, the maximum offset is $700 for taxable incomes up to $37,500. It then reduces by 5 cents per dollar until $45,000, and further reduces until it phases out at $66,667. If your taxable income is $50,000, your LITO would be $325 minus 1.5c per dollar over $45,000, which is $325 – $75 = $250. So your tax bill of $14,520 would be reduced to $14,270.

Calculate Your Take-Home Pay

Take-home pay is your gross salary minus income tax (after offsets) minus the Medicare levy. Using the $80,000 example:

• Gross: $80,000
• Income tax: $14,520 – $250 LITO = $14,270
• Medicare levy: $1,600
• Total deductions: $15,870
• Annual take-home: $64,130

Divide by 26 fortnights to get your fortnightly pay: about $2,466. Your employer withholds these amounts using PAYG tax tables, so what you see in your bank account is after tax and Medicare.

Remember Super Is Separate

Employer super contributions (12% from 1 July 2026) are paid on top of your salary, not taken out of it. If a job ad says '$80,000 plus super', your take-home is based on $80,000. Super is not part of your take-home pay. For more on how super works, see our Super guide.

Use the Benchmarks

To compare your salary, check the latest benchmarks:

• National minimum wage: $26.44/hour, $1,004.90/week, about $52,255/year
• All employees average weekly total earnings: $1,579.20/week (about $82,118/year) – includes part-time
• Full-time adult ordinary time earnings: $2,083.70/week (about $108,352/year) – excludes overtime and employer super

These figures come from Fair Work and the Australian Bureau of Statistics. They help you see where your pay sits relative to the market.

Putting It All Together

This salary guide shows you how to estimate your take-home pay using the 2026–27 tax rates, Medicare thresholds, and offsets. For a quick estimate, use our Take-home pay calculator. Remember that this is an estimate only – your actual withholding may vary due to HELP/HECS debts, the Medicare levy surcharge, salary packaging, or payroll tax-table rounding. Always check your payslip and consult the Australian Taxation Office for your personal situation.