paycalculator

Australian income tax is levied at progressive tax rates. The lowest bracket is 0%, known as the tax-free rate for individuals on low incomes. Tax rates increase progressively up to 45% for incomes over $180,000. In addition to tax there are additional levies for Medicare and the Temporary Budget Repair Levy. Individuals on incomes below $18200 are also entitled to the Low and Middile Income Tax Offset (LAMITO).

Source

It is important to understand that these brackets are progressive, whereby only the value between the bracket is taxed at the corresponding rate. For more information on income tax rates for individuals see the ATO website.

Foreign residents are not entitled to claim the tax free threshold where no tax is paid below $18,200. The classification of a foreign resident is not necessarily determined by your passport or visa entitlement. Generally the ATO classifies a worker to be a non-resident if they have lived in Australia for less than 6 months.

The exception however is for participants in the ‘Working Holiday Maker Program’. From 1 January 2017, tax rates changed for working holiday makers who are in Australia on a 417 or 462 visa. This has became known as the "Backpacker Tax" as it largely effected foreign backpackers who often work casually as farm laborers and fruit pickers. These workers became an important part of the rural economy and were previously exempt from income tax below $37,000. After considerable debate in Parliament, a new revised tax schedule was legislated such that a tax rate of 15% for earnings below $37,000 was imposed. Above this rate the non-resident income rates applied. See the new rates and work out your tax residency status.

The Low Income Tax Offset (LITO) is a tax rebate for individuals on low incomes. Since 1 July 2013 the full offset is $445, with a withdrawal rate of 1.5 cents per dollar of income over $37,000, such that it cuts out at $66,667. You will need to complete 'Withholding declaration (NAT 3093)' to withhold your tax offsets from your pay. Otherwise Tax Offsets are paid back as a lump sum in you tax return.

The Low And Middle Income Tax Offset (LAMITO) was an additional income tax offset available in the 2019, 2020 and 2021 Tax years. The offset is in addition to the LITO. The offset is applied during your tax return at the end of the year and is therefore not included in you regular PAYG tax on your wages.

Superannuation is a pension scheme. It has a compulsory element where employers are required by law to pay a proportion of an employee's salary and wages (currently 10.5%) into a superannuation fund which can be accessed when the employee retires. Superannuation applies to all working Australians, except those earning less than $450 per month, or aged under 18 or over 70. Individuals can choose to make extra voluntary contributions to their superannuation and receive tax benefits for doing so.

The superannuation rate will remain at 9.5% until 2021. It will then gradually increase year-by-year until it reaches 12% in 2025. In addition, there is also a cap on superannuation concessional contributions. Currently the cap is set at $25,000. To learn more about these caps and their thresholds see Superannuation Guarantee increases on the SuperGuide website.

Your salary is often quoted as a 'package' where the figure includes the superannuation contribution. In this case the superannuation contribution must be deducted from you salary as tax is not charged on superannuation. For more information about superannuation and superannuation funds see Simplified Superannuation on the Australian Government website.

Medicare is an Australian health care scheme funded by an income tax levy to provide all Australians with access to free or low cost medical care. From 1 July 2014 the Medicare levy increased by 0.5% from 1.5% to 2% to fund the National Disability Insurance Scheme (NDIS). Taxpayers earning more than $90,000 a year (for singles) or $180,000 a year (for couples and families, 2015 fiscal year and beyond) whom don't have private hospital cover, also have to pay the Medicare Levy Surcharge (MLS). This is a 3 tier levy of 1%, 1.25% and 1.5% tax on top of the 2% Medicare levy. For more information see information on the Medicare levy on the infochoice website.

Starting in 2019, the HELP payment scheme includes all student loans including HECS-HELP, FEE-HELP, VET FEE-HELP, OS-HELP, SA-HELP and VET Student loans. These loan are repaid through compulsory repayments administered through the tax system and form part of income tax. The payments are graded against income such that a greater share is paid the more income is earned. These rates are adjusted each year. Below is a table of the repayments for the 2020 - 2021 tax year.

Source