Australian Tax Scales Explained Simply
Understanding how progressive tax rates work in Australia. Tax is calculated on each portion of your income at different rates, not as a flat percentage of your total income.
Enter Annual Salary
Enter ONE value only - either excluding or including Superannuation Guarantee (SG)
| Salary Type | Amount |
|---|---|
The minimum Superannuation Guarantee rate is 12%. You can adjust this up to 30% if your employer offers a higher contribution.
Simplified Example of a Tax Summary
| Gross Package (including SG) | - |
| Superannuation (SG) | - |
| Taxable Income | - |
| Total Tax Payable | - |
| Net Income (after tax, before SG) | - |
How Progressive Tax Works
Australia uses a progressive tax system. This means your income is divided into brackets, and each bracket is taxed at a different rate. You only pay the higher rate on the portion of income that falls within that bracket, not on your entire income.
Example: If you earn $50,000, you don't pay 32% tax on the entire amount. Instead:
- The first $18,200 is tax-free (0%)
- The next $26,800 (from $18,201 to $45,000) is taxed at 18% including Medicare Levy
- The remaining $5,000 (from $45,001 to $50,000) is taxed at 32% including Medicare Levy
All tax rates shown below include the 2% Medicare Levy.
Tax Breakdown by Bracket
See exactly how much tax is paid at each threshold
| Tax Bracket | Tax Rate (incl. Medicare Levy) |
Income in This Bracket | Tax on This Portion |
|---|---|---|---|
| $0 - $18,200 | 0% | - | - |
| $18,201 - $45,000 | 18% | - | - |
| $45,001 - $135,000 | 32% | - | - |
| $135,001 - $180,000 | 39% | - | - |
| $180,001+ | 47% | - | - |
| Total Tax Payable | - | ||
Simplified Tax Summary
The tax at each bracket level
| Tax Bracket | Tax Paid |
|---|---|
| $0 - $18,200 | - |
| $18,201 - $45,000 | - |
| $45,001 - $135,000 | - |
| $135,001 - $180,000 | - |
| $180,001+ | - |
| Total | - |
Common Misconception: Flat Rate Tax
This is NOT how Australian tax works! Some people mistakenly believe that earning more money pushes their entire income into a higher tax bracket. This is incorrect.
| Calculation Method | Amount |
|---|---|
| Correct: Progressive Tax (actual) Tax calculated on each portion at different rates |
- |
| Incorrect: Flat Rate (misconception) If highest tax rate was applied to entire income |
- |
| Difference How much more you'd pay under incorrect method |
- |
The progressive system means you will always take home more money if you earn more, even if part of your income is taxed at a higher rate. You never lose money by earning more.
Official Tax Information
For the most current and comprehensive tax information, visit the Australian Taxation Office:
Important Disclaimer
This calculator is for educational purposes only.
This calculator demonstrates how progressive tax brackets work in Australia using the 2024-2025 tax rates. It shows tax calculations based solely on taxable income thresholds.
What this calculator does NOT include:
- Tax offsets or rebates (Low Income Tax Offset, Seniors and Pensioners Tax Offset, etc.)
- Deductions (work-related expenses, donations, investment property expenses, etc.)
- Additional levies or surcharges (Medicare Levy Surcharge, Budget Repair Levy, etc.)
- HELP/HECS debt repayments
- Investment income, capital gains, or other income sources
- Family Tax Benefits or other government payments
- Different residency status calculations (foreign residents, working holiday makers, etc.)
Your actual tax payable will vary based on your individual circumstances, deductions, and offsets. This calculator is designed purely to help you understand how progressive tax brackets work - not to calculate your exact tax obligation.
This is not financial or taxation advice. For accurate tax calculations and advice specific to your situation, please consult:
- A registered tax agent
- A qualified accountant
- The Australian Taxation Office directly
Tax rates shown are for the 2025-2026 financial year and include the 2% Medicare Levy. All rates and thresholds are subject to change by legislation.