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How the Australian Income Tax Calculator Works — ATO Rates, Medicare Levy, and LITO

Updated January 2026 · 6 min read

Australia's income tax system combines progressive ATO tax brackets with a Medicare Levy that funds public healthcare, plus several tax offsets that reduce the final amount owed. The 2024-25 tax year also introduced the Stage 3 tax cuts, restructuring the middle brackets significantly. This calculator applies all current ATO rates, the Medicare Levy, and the Low Income Tax Offset (LITO) to give you an accurate net income estimate.

$18,200

Tax-free threshold (2024-25)

2%

Medicare Levy rate

$700

Maximum Low Income Tax Offset (LITO)

45%

Top marginal rate (income over $190,000)

Australian tax brackets for 2024-25

  • $0–$18,200: 0% (tax-free threshold for residents)
  • $18,201–$45,000: 19 cents per dollar above $18,200
  • $45,001–$135,000: $5,092 + 32.5 cents per dollar above $45,000
  • $135,001–$190,000: $31,288 + 37 cents per dollar above $135,000
  • Over $190,000: $51,638 + 45 cents per dollar above $190,000

Medicare Levy and LITO

The Medicare Levy is 2% of taxable income for most taxpayers, funding Australia's public healthcare system. Low-income earners are exempt or pay a reduced levy. The Low Income Tax Offset (LITO) reduces your tax dollar-for-dollar: maximum $700 for incomes up to $37,500, phasing out to zero at $66,667.

How to use the Australian income tax calculator

  1. Enter your annual taxable income in Australian dollars
  2. Select the tax year (2024-25)
  3. Indicate residency status (residents get the tax-free threshold; non-residents don't)
  4. Review income tax by bracket, Medicare Levy, LITO reduction, and net income
  5. Toggle annual, monthly, fortnightly, or weekly breakdowns

ℹ️ Superannuation is separate from take-home pay

Employer superannuation contributions (11.5% for 2024-25, rising to 12% from 1 July 2025) are paid on top of your salary — they don't reduce your take-home pay but aren't part of it either. Compulsory super is taxed at 15% within the fund.

Common mistakes to avoid

  • Using last year's tax brackets after Stage 3 cuts restructured the 2024-25 rates
  • Forgetting the Medicare Levy in net income calculations
  • Assuming the tax-free threshold applies if you're a non-resident — it doesn't
  • Not claiming the LITO if your income falls within the eligibility range
  • Confusing taxable income with gross income — salary sacrifice and deductible expenses reduce taxable income first

Related calculators

For other international calculators, see the UK Income Tax Calculator for PAYE and National Insurance, the Ireland Income Tax Calculator for PAYE, USC, and PRSI, and the New Zealand Income Tax Calculator for PAYE and ACC levy calculations.

Ready to run the numbers?

Use our free Australia Income Tax Calculator to get an instant, accurate result — no signup required.

Open Australia Income Tax Calculator

Frequently asked questions

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