A worked example
Meet Sarah, a graphic designer in Brisbane earning $75,000 a year. She works full-time for a creative agency and has no HELP debt. Here's how her fortnightly take-home pay breaks down for 2025-26.
Sarah's annual salary is $75,000, which works out to $2,884.62 per fortnight before tax. On $75,000, she falls into the 30% marginal tax bracket (for income between $45,001 and $135,000), but her effective tax rate is much lower because the first $18,200 is tax-free and income from $18,201 to $45,000 is taxed at 16%.
Annual tax: $4,288 on the $18,201-$45,000 slice (16% of $26,800) plus $9,000 on the $45,001-$75,000 slice (30% of $30,000), totalling $13,288. Medicare levy at 2% adds $1,500. Super guarantee of 12% ($9,000) is paid by her employer on top of salary.
Fortnightly: income tax $511.08, Medicare levy $57.69, super $346.15 (employer-paid, doesn't reduce take-home). Sarah's fortnightly take-home: $2,884.62 minus $511.08 minus $57.69 equals $2,315.85. Over the year, that's about $60,212 in her bank account, with another $9,000 going into her super fund.
State-by-state differences
Income tax, Medicare levy, and superannuation are federal, so your take-home pay from these deductions is identical whether you live in Sydney, Perth, or Hobart. The ATO doesn't care which state you call home.
- Payroll tax: This is paid by employers, not deducted from your pay. Each state sets its own threshold (around $700,000 to $1.2 million in annual wages depending on the state). You won't see it on your payslip.
- WorkCover and workers compensation: Varies by state but again, paid by employers. It affects business costs but not your net pay calculation.
- Public holidays: States and territories have different public holiday calendars. If you're paid fortnightly, Victorian workers get Melbourne Cup day off while NSW workers don't, which can affect annual leave calculations but not the tax maths.
- Award rates: Some industries have state-based awards (hospitality, retail, health). Your gross pay might differ based on state loading rates, penalty rates, or allowances, which then changes your tax bracket and take-home.
- No state income tax: Unlike the US, Australia has no state-level income tax anywhere. Tasmania and Queensland residents pay the same federal rate as those in NSW or WA.
Common mistakes people make
- Thinking super comes out of your salary: Many people believe the 12% superannuation guarantee reduces their take-home pay. It doesn't. Your employer pays super on top of your salary. If your contract says $70,000, that's what you get (minus tax and Medicare), plus your employer separately contributes $8,050 to your super fund.
- Forgetting the Medicare levy: People often calculate tax but overlook the 2% Medicare levy. On a $90,000 salary, that's an extra $1,800 a year ($69.23 per fortnight) on top of income tax. Low-income earners under $26,000 get reduced or no Medicare levy, but most workers pay the full 2%.
- Using last year's tax tables: Tax brackets and thresholds change. The Stage 3 tax cuts that started 1 July 2024 replaced the old 19% bracket with 16% (on $18,201-$45,000) and widened the next bracket to $45,001-$135,000 at 30%. Those same rates carry into 2025-26. Using old rates can throw your estimate off by hundreds of dollars per year.
- Ignoring HELP repayments: If you have a HELP, HECS, or other study/training loan, compulsory repayments start at 1% of income from $67,000 (2025-26). On $60,000, that's $600 a year extra tax. People forget this isn't optional and wonder why their take-home is less than expected.
What this calculator doesn't account for
This calculator provides a standard estimate for regular salary earners. It does not account for:
- Salary packaging or novated leases: Reduces your taxable income through pre-tax deductions for cars, super contributions, or other benefits. Common in health, charity, and government sectors.
- Bonuses, overtime, or commission: One-off payments can push you into a higher tax bracket for that pay period, affecting withholding. Your end-of-year tax return evens it out, but fortnightly take-home varies.
- Tax offsets and deductions: LITO (Low Income Tax Offset), SAPTO (Seniors), zone rebates for remote workers, or work-related deductions all affect your final tax but aren't withheld by employers during the year.
- Multiple jobs: If you work two jobs simultaneously, the second employer doesn't know about the first. You need to claim no tax-free threshold on the second job, or you'll underpay tax.
- Non-resident tax rates: Foreign residents and working holiday makers face different tax scales from the first dollar.
Edge cases and nuances
Some situations need extra care beyond the basic calculator:
- Division 293 tax: If your income plus employer super contributions exceed $250,000, you pay an additional 15% tax on the super contributions above that threshold. This doesn't show on your payslip but hits when you lodge your return.
- Medicare levy surcharge: Singles earning over $101,000 (or families over $202,000) without private hospital cover pay an extra 1-1.5% on top of the standard 2% Medicare levy. That's up to 3.5% total going to Medicare instead of 2%.
- Part-year employment or changing jobs: The tax-free threshold ($18,200) applies annually, not per job. If you start mid-year, your employer withholds tax as if you'll earn that rate all year. You'll likely get a refund at tax time.
- Trust distributions and investment income: If you receive income from a family trust, rental properties, or dividends with franking credits, your marginal rate calculation gets complicated. PAYG withholding from salary doesn't account for other income sources.
- Parental leave and government payments: Paid Parental Leave from Services Australia is taxable income but has no tax withheld. It affects your annual return even though it feels separate from your salary.
