Income Tax & Take-Home Pay Calculator 2026-27
Income Tax & Take-Home Pay Calculator 2026-27
Knowing your take-home pay is the starting point for every decision a business owner makes, from setting your own wage to planning distributions. This income tax calculator estimates your 2026-27 income tax, the 2% Medicare levy and the Low Income Tax Offset for an Australian resident, then shows the pay you actually keep and your effective tax rate. It uses the rates that took effect on 1 July 2026, when the lowest marginal rate fell from 16% to 15%.
Enter your taxable income below to see your tax, Medicare levy and net pay in seconds. If you want to legally reduce the tax you pay across your business and personal income, book a tax planning review or speak with our team.
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2026-27 Resident Tax Rates
| Taxable income | Tax on this income (2026-27) | Tax on this income (2025-26) |
|---|---|---|
| 0 to $18,200 | Nil | Nil |
| $18,201 to $45,000 | 15c for each $1 over $18,200 | 16c for each $1 over $18,200 |
| $45,001 to $135,000 | $4,020 plus 30c for each $1 over $45,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 to $190,000 | $31,020 plus 37c for each $1 over $135,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,370 plus 45c for each $1 over $190,000 | $51,638 plus 45c for each $1 over $190,000 |
How This Income Tax Calculator Works
The calculator applies the 2026-27 resident tax rates published by the ATO. The first $18,200 of taxable income is tax free. Income between $18,201 and $45,000 is taxed at 15%, between $45,001 and $135,000 at 30%, between $135,001 and $190,000 at 37%, and anything above $190,000 at 45%. On top of the income tax, most residents pay the 2% Medicare levy. Low income earners may have the levy reduced or removed, and the Low Income Tax Offset of up to $700 reduces the tax payable for those earning up to $66,667.
Your take-home pay is simply your taxable income less the total tax payable. Your effective tax rate is the total tax as a percentage of your taxable income, which is always lower than your marginal rate because the lower brackets are taxed at lower rates. These figures are drawn from the ATO resident tax rates. The Medicare levy low-income thresholds used are the most recently published amounts and are indexed each year.
Worked Example
Take an Australian resident with a taxable income of $100,000 for 2026-27. Their income tax is $4,020 on the first $45,000 plus 30% of the $55,000 above $45,000, which is $16,500, giving $20,520 in income tax. They earn too much to receive the Low Income Tax Offset, so no offset applies. The Medicare levy is 2% of $100,000, which is $2,000. Total tax payable is $22,520, take-home pay is $77,480, and the effective tax rate is 22.5% even though the marginal rate is 32% including Medicare. On the same income in 2025-26 the total was $22,788, so the 1 July 2026 rate cut is worth $268 a year at this income level.
What to Do With Your Results
For a business owner, take-home pay is rarely just a salary question. How you draw money from your business, whether through wages, dividends, or trust distributions, and whether income is split across a spouse, a company, or a bucket company, can change the total tax paid on the same income substantially. The individual rates above are only one part of the picture. The right structure, planned before the income is earned, is what legally lowers the overall bill.
This calculator does not account for HELP or study loan repayments, the Medicare levy surcharge for higher earners without private hospital cover, salary sacrifice, or business income taxed through a company or trust. For a complete review of how you draw income and where tax is being lost, speak with a registered tax agent. The best outcomes come from planning across the whole structure, not just the personal return.
If the number above looks higher than you expected, the fix is almost never in the personal return itself. It sits in how the business pays you, which is the work we do inside business advisory in Melbourne rather than at lodgement. A tax planning review models your wage, dividends and distributions together and shows the total tax across the group, not just your own name, and a proactive business accountant in Melbourne should be setting that mix with you at the start of the year rather than reporting it at the end.
Frequently Asked Questions
How much tax do I pay on $100,000 in Australia for 2026-27?
An Australian resident with a taxable income of $100,000 pays $20,520 in income tax plus a $2,000 Medicare levy for the 2026-27 year, a total of $22,520. That leaves a take-home pay of $77,480 and an effective tax rate of about 22.5%. The figure assumes no HELP debt, no Medicare levy surcharge, and no offsets other than the standard rates. Business owners can often reduce this through the structure they use to draw income.
What are the 2026-27 income tax rates?
For Australian residents in 2026-27, income up to $18,200 is tax free. From $18,201 to $45,000 the rate is 15%, from $45,001 to $135,000 it is 30%, from $135,001 to $190,000 it is 37%, and above $190,000 it is 45%. These rates do not include the 2% Medicare levy, which applies on top for most residents. The lowest rate fell from 16% to 15% on 1 July 2026.
What is the difference between my marginal rate and my effective rate?
Your marginal rate is the rate applied to your next dollar of income, for example 32% including Medicare for income between $45,001 and $135,000. Your effective rate is the total tax you pay as a percentage of your whole taxable income, which is always lower because your first $18,200 is tax free and the earlier brackets are taxed at lower rates. Understanding both matters when you are deciding whether extra income is worth earning in your own name or another entity.
Does the calculator include HELP debt or the Medicare levy surcharge?
No. This calculator estimates income tax, the 2% Medicare levy and the Low Income Tax Offset for a resident individual. It does not include compulsory HELP or study loan repayments, the Medicare levy surcharge that applies to higher earners without private hospital cover, or offsets such as the seniors and pensioners offset. Your actual net pay may differ. For a precise figure across your full situation, speak with our team.
How can a business owner reduce the tax on their income?
The individual rates are fixed, but how you draw income is not. Splitting income legitimately across a spouse, using a company to cap the rate at 25% or 30%, distributing through a family trust, or retaining profits in a bucket company can all reduce the total tax on the same earnings. Each has strict rules and needs to be set up correctly and in advance. This is the core of proactive tax planning, and it is where advice pays for itself.
General Advice Disclaimer: This calculator provides general information only and does not constitute tax or financial advice. It applies standard 2026-27 resident tax rates, the 2% Medicare levy and the Low Income Tax Offset, and does not account for HELP debts, the Medicare levy surcharge, offsets or circumstances specific to you. Medicare levy low-income thresholds are indexed annually and the most recently published amounts are used. Your actual tax and take-home pay will depend on the full facts of your situation. Before acting, obtain advice from a registered tax adviser. Pinnacle Accounting & Advisory is a registered tax agent and CPA firm advising business owners across Australia.
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