Australia Tax Refund Calculator

How Australia's Tax System Works (2025-26)

Quick answer: Australia operates a progressive income tax system with the financial year running 1 July to 30 June. Under the ATO's Stage 3 tax cuts, residents pay 0% on the first $18,200, then 16%, 30%, 37%, and 45% at the top. Most employees pay through PAYG withholding, and tax returns are due by 31 October (self-lodging) or 15 May (via tax agent).

Most employees pay tax through PAYG (Pay As You Go) withholding, where employers deduct tax from each pay. Self-employed individuals, investors, and those with multiple income sources lodge a tax return after 30 June. Tax returns are due by 31 October 2026 if self-lodging, or 15 May 2027 if using a registered tax agent.

Stage 3 Tax Brackets -- Australian Residents (2025-26)

Quick answer: For 2025-26, Australian residents pay 0% on the first $18,200, 16% from $18,201–$45,000, 30% from $45,001–$135,000, 37% from $135,001–$190,000, and 45% above $190,000. The maximum tax saving from Stage 3 is $3,729 per year for those earning $135,000+.

For the 2025-26 financial year, Australian resident individuals pay income tax at these rates:

Key fact: An Australian resident earning \$100,000 in 2025-26 pays \$22,788 in income tax (before Medicare and offsets). This is \$4,288 on the \$18,201–\$45,000 portion at 16%, plus \$16,500 on the \$45,001–\$100,000 portion at 30%. After the \$700 LITO offset, effective tax is approximately \$22,088.

What Changed? Stage 3 Tax Cuts -- 2025-26 vs 2024-25

The revised Stage 3 tax cuts, effective from 1 July 2024, significantly reduced tax for low and middle-income earners compared to the original Stage 3 proposal. Both 2024-25 and 2025-26 use the same rates:

Bottom line: Every Australian taxpayer earning between \$18,201 and \$135,000 pays less tax under Stage 3. The maximum tax saving is \$3,729 per year for those earning \$135,000 or more.

Foreign Resident Tax Rates (2025-26)

According to the ATO, individuals who are not Australian residents for tax purposes pay the following rates with no tax-free threshold:

Foreign residents do not pay the Medicare Levy, are not eligible for LITO or SAPTO, and are not entitled to the 50% CGT discount. Franking credits are non-refundable for foreign residents.

Working Holiday Maker Tax Rates (2025-26)

Individuals on a subclass 417 (Working Holiday) or 462 (Work and Holiday) visa pay a special flat rate:

Working Holiday Makers do not receive the tax-free threshold. They are not eligible for LITO or SAPTO but are subject to the Medicare Levy if registered as an Australian resident for Medicare purposes (though most are exempt).

Medicare Levy & Medicare Levy Surcharge (2025-26)

Medicare Levy -- 2% of Taxable Income

Quick answer: The Medicare Levy is a flat 2% of taxable income that funds Australia's public healthcare system. Singles earning below $26,000 are exempt, with a shade-in range up to $32,500 where a reduced rate applies. Foreign residents and most Working Holiday Makers are exempt from the levy.

According to Services Australia, the Medicare Levy is a flat 2% of taxable income that funds Australia's public healthcare system. It applies to all Australian residents for tax purposes. Foreign residents and most Working Holiday Makers are exempt.

Low-income exemptions and shade-in (2025-26):

Within the shade-in range, the Medicare Levy is calculated at 10% of the amount exceeding the lower threshold (rather than 2% of total income), which creates a smooth transition. For example, a single person earning \$29,000 pays: 10% × (\$29,000 − \$26,000) = \$300 (instead of \$580 at the full 2%).

Medicare Levy Surcharge (MLS)

The Medicare Levy Surcharge is an additional charge on top of the 2% Medicare Levy for Australian residents who earn above certain thresholds and do not hold complying private hospital insurance:

Key fact: If you earn \$100,000 and do not have private hospital insurance, you pay an additional \$1,000 per year in MLS (1% × \$100,000). Taking out private hospital cover (often ~\$1,200–\$1,800/year) may be comparable in cost but provides you health cover. This calculator automatically applies the MLS if you leave the private health insurance box unchecked and your income exceeds \$93,000.

Tax Offsets (Credits That Reduce Your Tax)

Low Income Tax Offset (LITO)

According to the ATO, the Low Income Tax Offset (LITO) is a non-refundable offset that automatically reduces the tax payable for low and middle-income earners. For 2025-26:

Example: A resident earning \$55,000 gets a LITO of \$700 − (0.015 × \$10,000) = \$550. Combined with the tax-free threshold, this means the effective tax-free threshold for low-income residents is approximately \$24,500.

Seniors and Pensioners Tax Offset (SAPTO)

The SAPTO provides additional tax relief for eligible seniors who receive an Australian Government pension or are of Age Pension age. For 2025-26:

Key fact: Combined with the tax-free threshold and LITO, an eligible single senior can earn up to approximately \$33,532 per year completely tax-free (before Medicare Levy).

Franking Credits (Dividend Imputation)

When Australian companies pay dividends from profits that have already been taxed at the 30% corporate rate, shareholders receive a franking credit for the tax already paid. For fully franked dividends:

• Franking credit formula: Cash dividend ÷ 0.70 × 0.30 (i.e., 30/70 of the cash dividend)
• Example: If you receive \$7,000 in fully franked dividends, the franking credit is \$7,000 ÷ 0.70 × 0.30 = \$3,000. Your assessable income includes \$10,000 (\$7,000 + \$3,000), but you receive a \$3,000 tax offset.
• Refundable for residents: If the franking credit exceeds your total tax liability, the excess is refunded to you as a cash payment. This is unique to Australia's dividend imputation system.
• Non-refundable for non-residents: Foreign residents cannot claim refundable franking credit offsets.

HELP / HECS-HELP Repayment Rates (2024-25)

Quick answer: If you have a HELP/HECS-HELP debt, compulsory repayments start when your repayment income exceeds $54,435. Rates are progressive from 1% to 10% across 19 tiers, and the repayment is calculated on your entire income, not just the amount above the threshold.

According to the ATO, if you have a HELP (Higher Education Loan Program), HECS-HELP, VSL, SFSS, or SSL debt, compulsory repayments are deducted through the tax system once your repayment income (RI) exceeds the minimum threshold. Repayment income includes taxable income, net investment losses, reportable fringe benefits, reportable super contributions, and exempt foreign employment income.

2024-25 HELP Repayment Thresholds and Rates:

Important: The repayment is calculated on your entire repayment income, not just the amount above the threshold. For example, if your RI is \$70,000, you repay 2.5% × \$70,000 = \$1,750. HELP repayments are not tax-deductible and are collected through your tax assessment or PAYG withholding.

Capital Gains Tax (CGT) in Australia

According to the ATO, Australia does not have a separate capital gains tax -- capital gains are included in your assessable income and taxed at your marginal rate. Key CGT rules for 2025-26:

• 50% CGT Discount: Australian residents who hold an asset for more than 12 months before selling receive a 50% discount on the capital gain. Only half the gain is included in taxable income.
• No discount for foreign residents: Foreign residents who acquired assets after 8 May 2012 are not eligible for the 50% CGT discount.
• No discount for companies: Companies pay tax on the full capital gain at the 30% (or 25% for base rate entities) corporate rate.
• Main residence exemption: The gain on selling your main home is generally fully exempt from CGT (not included in this calculator).
• Example: If a resident sells shares held for 2 years with a \$20,000 capital gain, only \$10,000 (50%) is added to taxable income. At a 30% marginal rate, the CGT payable is \$3,000.

Salary Sacrifice & Superannuation (2025-26)

According to the ATO, the Superannuation Guarantee (SG) rate for 2025-26 is 12% of ordinary time earnings, up from 11.5% in 2024-25. This is paid by your employer on top of your gross salary.

How Salary Sacrifice Works

• Salary sacrifice to super allows you to redirect a portion of your pre-tax salary into your superannuation fund.
• The sacrificed amount reduces your taxable income (saving tax at your marginal rate) but is taxed at 15% inside the super fund.
• The concessional (pre-tax) contributions cap for 2025-26 is \$30,000 per year. This includes employer SG + salary sacrifice + personal deductible contributions.
• Division 293 tax: High-income earners with income + concessional super contributions exceeding \$250,000 pay an additional 15% tax on concessional contributions (total 30%).
• Example: If you earn \$100,000 and salary sacrifice \$10,000, your taxable income drops to \$90,000. You save \$3,000 in income tax (at 30% marginal rate) but pay \$1,500 in super fund tax (15%). Net saving: \$1,500.

Superannuation Guarantee Rates (History & Future)

Work-Related Deductions & Donation Claims

Common Work-Related Deductions (2025-26)

According to the ATO, you can claim deductions for expenses directly related to earning your income. Key claimable items include:

• Working from Home (WFH): Fixed rate of 67 cents per hour covering electricity, internet, phone, stationery, and depreciation of furniture. You must keep a log of hours worked from home.
• Vehicle & Travel: Cents-per-kilometre method at 85 cents per km (up to 5,000 km), or logbook method for higher claims.
• Tools & Equipment: Items costing \$300 or less can be claimed immediately. Items over \$300 are depreciated over their effective life.
• Uniforms & Laundry: Compulsory uniforms, protective clothing, and occupation-specific clothing. Laundry at \$1 per load (up to \$150 without receipts).
• Phone & Internet: Work-related portion of personal phone and internet bills (must keep records of work vs personal use).
• Union & Professional Fees: Membership fees for unions and professional associations related to your work.
• Self-Education: Courses, textbooks, and conferences directly related to your current employment.

Charitable Donations

Donations of \$2 or more to organisations with Deductible Gift Recipient (DGR) status are tax-deductible. You can claim up to your entire taxable income in donations (carrying forward excess to future years). Workplace giving programs deduct donations pre-tax from your pay.

State and Territory Tax Differences

While Australia's income tax is federal and uniform across all states, each state levies its own payroll tax, land tax, and stamp duty (transfer duty). These don't affect your income tax calculation but matter for employers and property buyers:

New South Wales (NSW)

According to Revenue NSW, the payroll tax threshold is \$1.2 million with rates of 4.85%–5.45%. Stamp duty on property applies up to 5.5%, with first home buyer exemptions for properties under \$800,000. NSW offers a choice between upfront stamp duty and annual property tax for first home buyers.

Victoria (VIC)

According to the State Revenue Office Victoria, payroll tax is 5.95% (metro) and 4.85% (regional) above a \$700,000 threshold. From 2024, a temporary COVID debt levy adds 0.5% (or 1% for wages over \$100M). Stamp duty ranges up to 5.5%, with a first home buyer exemption for properties under \$600,000.

Queensland (QLD)

According to Queensland Revenue Office, payroll tax is 4.75%–4.95% above a \$1.3 million threshold. First home buyers pay no stamp duty on properties under \$700,000 (extended to \$800,000 for new builds). The \$30,000 First Home Owner Grant applies to new builds under \$750,000.

Western Australia (WA)

According to RevenueWA, payroll tax is 5.5% above a \$1 million threshold. Stamp duty rates apply progressively up to 5.15%. The First Home Owner Grant is \$10,000 for new builds. WA has no land tax exemption threshold for investment properties -- tax applies from the first dollar.

South Australia (SA)

According to RevenueSA, payroll tax is 4.95% above a \$1.5 million threshold. The First Home Owner Grant is \$15,000 for new homes. Land tax applies from \$450,000+ for non-primary residences at progressive rates up to 2.4%.

Tasmania (TAS)

According to the State Revenue Office Tasmania, payroll tax is 4%–6.1% above a \$1.25 million threshold. First home buyers receive a \$30,000 grant for new builds and stamp duty concessions. Tasmania has relatively low property prices compared to mainland states.

ACT (Australian Capital Territory)

The ACT is progressively abolishing stamp duty, replacing it with an annual land rates system. Current payroll tax is 6.85% above a \$2 million threshold. The First Home Owner Grant is \$7,000 for new or substantially renovated homes.

Northern Territory (NT)

The NT has payroll tax at 5.5% above a \$1.5 million threshold. The First Home Owner Grant is \$10,000 and the Territory Home Owner Discount provides stamp duty relief. The NT has no land tax for any properties.

For state-specific tax information, visit: Revenue NSW · SRO Victoria · QLD Revenue · RevenueWA · RevenueSA · SRO Tasmania

Tips to Reduce Your Australian Tax Bill

• Maximise Salary Sacrifice: Every dollar sacrificed to super is taxed at 15% instead of your marginal rate (up to 45%). On a \$100,000 salary, sacrificing \$10,000 saves you approximately \$1,500 in tax.
• Claim Every Legitimate Deduction: According to the ATO, the average Australian claims approximately \$3,000 in work-related deductions. Use the WFH fixed rate (67c/hour), claim tools, uniforms, and self-education expenses.
• Pre-Pay Expenses Before 30 June: Bring forward deductible expenses (income protection insurance, professional memberships, charitable donations) to claim them in the current year.
• Take Out Private Health Insurance: If you earn over \$93,000, the Medicare Levy Surcharge (1%–1.5%) may cost more than a basic hospital policy. Compare the MLS against hospital cover premiums.
• Use Your Concessional Super Cap: The \$30,000 cap includes employer SG. If your employer contributes \$12,000 (12% of \$100K), you still have \$18,000 of cap space for salary sacrifice or personal deductible contributions.
• Realise Capital Losses Strategically: Capital losses can offset capital gains. Consider selling underperforming investments before 30 June to reduce your CGT bill.
• Spouse Super Contribution: If your spouse earns under \$40,000, contributing \$3,000 to their super can earn you a tax offset of up to \$540.
• Keep Records for 5 Years: The ATO requires records for 5 years from the date you lodge your return. Digital records (photos of receipts, bank statements) are accepted.

Australia vs Other Countries -- Tax Comparison

How does Australia's tax system compare internationally? Here's a quick comparison for someone earning the equivalent of AUD \$100,000:

Approximate figures for comparison only. Actual rates depend on individual circumstances, deductions, and local rates.