Tax rate comparison
Compare tax, Medicare and take-home on two resident salaries for 2026–27.
What the result means
Effective tax rate is total tax including Medicare divided by gross salary. The extra tax on a raise is the average rate on the slice between two salaries, not the top bracket applied to the whole wage.
How it is calculated
Effective rate = (income tax after LITO + Medicare) ÷ gross. Slice rate = Δtax ÷ Δsalary
- Gross: Annual salary, no extra deductions.
Each salary is assessed independently, then the difference is compared.
Assumptions
- Estimates only — not tax, legal, credit or financial advice. Check the official source or your contract before relying on a figure.
- Resident, tax-free threshold, no HELP or MLS.
Worked example
$95,000 versus $132,000
Two resident salaries in 2026–27.
- Each salary
- Taxed on its own brackets and Medicare
- Slice
- Extra tax divided by extra salary
A higher salary has a higher effective rate, but the old income is not re-taxed at the new top rate.
Year-end tax, not PAYG
This uses resident assessment for the active financial year. Payslip withholding can differ by a few dollars a period.
Questions
Does a raise put all my pay in a new bracket?
No. Only the dollars above the bracket threshold are taxed at the new rate.
Can I compare two financial years on this page?
Yes. Set each column’s income year independently. Keep every other assumption the same so the only thing that moves is the year or the income you are testing.
Read the background
These guides explain the rules behind this calculation in full, without any inputs to fill in.
- Australian income tax brackets for 2026–27The resident rates, what a marginal rate does and does not mean, and why moving into a higher bracket never reduces your take-home pay.8 min read
- How PAYG withholding is calculated on an Australian payslipThe ATO formula your employer actually uses, why each pay is rounded, and why a correct payslip still does not match your year-end tax bill.9 min read
- The Australian financial year, and why 1 July mattersWhy the income year runs from 1 July to 30 June, which year a date belongs to, and what actually changes at EOFY besides a new tax scale.7 min read
Related calculators
- Income taxEstimate income tax, LITO, Medicare and optional HELP from taxable income for 2026–27, including foreign resident rates.
- SalaryEstimate weekly, fortnightly, monthly and annual take-home pay from an Australian resident salary, using ATO PAYG withholding for each pay and year-end tax for the annual figure.
- Pay riseSee what a percentage or dollar pay rise does to weekly, monthly and annual pay.
Sources
Australian Taxation Office
2026–27 income year · Last reviewed 2026-08-19
Money · Last reviewed 19 August 2026
Estimates only. Not tax, legal or financial advice. Check official sources before relying on a figure.
Spotted a mistake? Contact us.
Printed from OzCalc (ozcalc.com). Last reviewed 19 August 2026. Estimates only — not tax, legal or financial advice.