How to Compare Job Offers Using Take-Home Pay and Salary Sacrificing a Car
The national minimum wage is $26.44 per hour ($1,004.90 per week), but your take-home pay depends on your tax bracket and whether you salary sacrifice.
Compare Job Offers by What Reaches Your Bank Account
When you receive a job offer in Australia, the headline salary is only part of the story. What matters is the amount that lands in your bank account after tax, the Medicare levy, and any salary sacrifice arrangements. This guide helps you compare offers using take-home pay, not gross figures.
Start with the Gross Annual Salary
Your employer may quote a salary as "plus super" or "including super". Superannuation is 12% from 1 July 2026, but it is not deducted from your take-home pay if the ad says "plus super". For example, a $100,000 salary plus super means your employer pays $112,000 total, but you receive $100,000 gross. If the ad says "including super", your gross salary is the amount after super is taken out. Always clarify which figure you are comparing.
Apply the 2026–27 Tax Rates
The Australian Taxation Office shows these resident tax rates for 2026–27:
- Up to $18,200: nil
- $18,201 to $45,000: 15c per $1 over $18,200
- $45,001 to $135,000: $4,020 plus 30c per $1 over $45,000
- $135,001 to $190,000: $31,020 plus 37c per $1 over $135,000
- Over $190,000: $51,370 plus 45c per $1 over $190,000
You may also be eligible for the Low Income Tax Offset (LITO). The maximum LITO is $700 at taxable income up to $37,500, then reduces by 5c per $1 until $45,000, then by 1.5c per $1 until $66,667. LITO can only reduce your tax to zero.
Add the Medicare Levy
The Medicare levy is 2% of your taxable income, but with a shading-in for low earners. The latest published single-person thresholds are $28,011 and $35,013. If your taxable income is below $28,011, you pay no levy. Between $28,011 and $35,013, you pay 10c per $1 over the lower threshold. Above $35,013, you pay the full 2%.
For example, a full-time worker on the national minimum wage earns $52,255 per year (based on $26.44 per hour, 38 hours per week, 52 weeks). Their tax would be $4,020 plus 30c per $1 over $45,000 = $4,020 + ($7,255 × 0.30) = $6,196.50. Medicare levy at 2% = $1,045.10. Take-home pay = $52,255 - $6,196.50 - $1,045.10 = $45,013.40 annually, or about $1,731.28 per fortnight.
Factor in Salary Sacrificing a Car
One way to reduce your taxable income is by salary sacrificing a car. This arrangement lets you pay for a vehicle and its running costs from your pre-tax salary. The amount sacrificed is deducted from your gross pay before tax and Medicare are calculated. This lowers your tax bill, but also reduces the cash you receive. The net benefit depends on your marginal tax rate. For example, if you are in the 30% bracket, sacrificing $10,000 saves you $3,000 in tax plus $200 in Medicare levy, but you lose $10,000 from your take-home pay. However, you gain the car. Compare offers with and without salary packaging using the Take-home pay calculator.
Compare Offers Using Fortnightly Take-Home
Most Australians are paid fortnightly. To compare offers, calculate the net amount per fortnight after tax, Medicare, and any salary sacrifice. Use the Clearance tool to estimate your take-home pay. Remember that super is not part of your take-home pay, but it is part of your total compensation. A lower gross salary with a generous super contribution may still be attractive.
Watch for Other Deductions
This guide does not include HELP/HECS repayments, the Medicare levy surcharge, or payroll tax-table rounding. If you have a student loan, your employer will deduct repayments once your income exceeds the threshold. The Medicare levy surcharge applies if you do not have appropriate private hospital cover and your income is above a certain level. Always check your full situation.
Summary
To compare job offers, focus on the amount that reaches your bank account each fortnight. Use the tax rates, Medicare thresholds, and consider salary sacrificing a car if it suits your needs. The Method page explains how we calculate estimates. Remember, this is not a tax assessment – consult a professional for your specific circumstances.
Questions
How do I calculate my take-home pay from a job offer?
Start with your gross annual salary. Deduct income tax using the 2026–27 resident tax rates: nil on the first $18,200, then 15c per $1 up to $45,000, 30c per $1 up to $135,000, and so on. Apply the Medicare levy at 2% of taxable income (full rate if you earn over $35,013 as a single person). If your taxable income is between $28,011 and $35,013, the levy is reduced by 10c per $1 over the lower threshold. Also subtract any salary sacrifice amounts (like a car) before tax. The result is your annual take-home pay. Divide by 26 for a fortnightly amount.
What is the Medicare levy threshold for singles in 2026–27?
The latest published single-person Medicare 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, the levy is 10c per $1 over $28,011. Above $35,013, you pay the full 2% on your entire taxable income.
How does salary sacrificing a car affect my take-home pay?
Salary sacrificing a car means you agree to reduce your gross salary by the cost of the car lease and running costs. This lowers your taxable income, so you pay less income tax and Medicare levy. However, your take-home pay will be lower because the sacrificed amount goes to the car provider instead of your bank account. The net benefit depends on your tax bracket and the Fringe Benefits Tax treatment. Use the Salary packaging guide to estimate the effect.