Tax info
A quick guide to how Australian income tax works (high level) and how OzMoneyTools estimates take‑home pay.
1) Taxable income (what gets taxed)
Your taxable income is broadly your assessable income minus eligible deductions.
In OzMoneyTools we currently estimate:
taxable income ≈ cash salary − deductions.
Some offsets, rebates, and special cases aren’t modelled yet (so treat this as an estimate, not tax advice).
2) Resident vs foreign resident
The ATO has different tax tables depending on your tax residency.
- Australian residents can generally access the tax‑free threshold.
- Foreign residents generally don’t get the tax‑free threshold and use different rates.
- Foreign residents are generally not required to pay the Medicare levy.
3) Australian resident tax rates (2025–26)
These are the ATO resident tax brackets for the full year (not including Medicare levy of 2%).
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
Source: ATO resident tax rates.
4) Foreign resident tax rates (2025–26)
Foreign residents use different tax rates and generally don’t pay Medicare levy.
| Taxable income | Tax on this income |
|---|---|
| $0 – $135,000 | 30c for each $1 |
| $135,001 – $190,000 | $40,500 plus 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 plus 45c for each $1 over $190,000 |
Source: ATO foreign resident tax rates.
FAQ
Is the Medicare levy included in the tax tables above?
No. The ATO income tax tables are separate from the Medicare levy (generally 2% for residents).
Why does my payslip withholding differ from an annual estimate?
Employers withhold PAYG per pay run using withholding schedules and rounding, which can differ slightly from calculating your annual liability and averaging it.
Does OzMoneyTools include every offset and exemption?
Not yet. We focus on the main components (income tax, Medicare levy, MLS, and HECS/HELP). If you need exact results for your circumstances, refer to the ATO or a tax professional.
Sources
- ATO resident tax rates: ato.gov.au
- ATO foreign resident tax rates: ato.gov.au