How We Calculate

EarnOut uses official ATO formulas and rates, verified against real payslips. We support 5 financial years (2021-22 to 2025-26).

PAYG Withholding

Your take-home pay is calculated using the ATO's PAYG withholding formula (Schedule 1, NAT 1004). This is the same formula your employer uses to calculate the tax withheld from each pay — so the amount you see matches your payslip exactly.

The formula converts your pay to a weekly equivalent, applies coefficients published by the ATO, then converts back to your pay frequency with ATO-specified rounding.

Income Tax

Australia uses progressive tax brackets — you only pay the higher rate on income above each threshold. For 2025-26 residents: 0% up to $18,200, then 16%, 30%, 37%, and 45% on higher portions. Non-residents and working holiday makers have different rates.

See the full bracket tables on our Tax Brackets page.

Low Income Tax Offset (LITO)

Residents earning under $66,667 receive a tax offset of up to $700. It phases out in two stages: 5 cents per dollar from $37,500 to $45,000, then 1.5 cents per dollar from $45,000 to $66,667. This is automatically applied — you don't need to claim it.

Medicare Levy

A 2% levy funds Australia's public health system. For 2025-26, residents earning below $27,222 are exempt. Between $27,222 and $34,027, the levy phases in at 10 cents per dollar. Above $34,027, the full 2% applies.

Medicare Levy Surcharge: High earners ($101,000+ for 2025-26) without private hospital cover may owe an additional 1–1.5% at tax time. This is not withheld from your pay — we show it as a separate annual liability.

Student Loan Repayment

HECS-HELP, VET Student Loans, and Trade Support Loans all use the same repayment thresholds. For 2025-26, the system changed to marginal rates: no repayment below $67,000, then 15% on the excess up to $125,000, 17% to $179,286, and a flat 10% of total income above that. Earlier years use a flat-rate system where the rate applies to your entire income.

Superannuation

Your employer contributes super on top of your salary. The rate has increased each year: 10% (2021-22), 10.5% (2022-23), 11% (2023-24), 11.5% (2024-25), and 12% (2025-26). If your salary is quoted "inclusive of super," we back-calculate the base salary.

Salary sacrifice into super reduces your taxable income but is capped at the concessional limit ($30,000 from 2024-25, including employer contributions). High earners (income + super > $250,000) pay an additional 15% Division 293 tax on their super contributions.

Work-Related Expenses

You can claim deductions for work costs like uniforms, tools, travel, phone, and training. These reduce your taxable income before tax is calculated. You must have receipts for expenses over $300.

Casual & Hourly Workers

Our Shift & Casual Calculator handles penalty rates from 6 Fair Work Modern Awards (Retail, Hospitality, Fast Food, Construction, Cleaning, Aged Care). Casual workers receive 25% loading in lieu of paid leave. We apply the loaded rate, calculate annual gross from your weekly shift pattern, then run it through the full tax engine — income tax, Medicare, HECS, and super — so you see your real take-home pay.

Historical: LMITO (2021-22)

The Low and Middle Income Tax Offset was a temporary measure that ended on 30 June 2022. For 2021-22, it provided up to $1,500 in tax relief (base $675, increasing to $1,500 for incomes $48,000–$90,000, then phasing out by $126,000). We apply this automatically when you select the 2021-22 tax year.

Accuracy

Our calculations are verified against real payslips across 4 salary levels and 3 financial years. Annual figures match the ATO tax calculator exactly. Per-period amounts use the ATO's PAYG withholding formula (NAT 1004) for payslip-accurate results.

This calculator provides estimates only. Results may differ from your actual tax assessment due to individual circumstances. Always consult the ATO or a registered tax agent for personal advice.

Sources

← Calculator Tax Brackets →