How We Calculate Pay and Tax

Every rate is taken from a primary source, which means the Australian Taxation Office for tax, superannuation and Medicare, and the Fair Work Ombudsman for award minimum rates. Olivia Harper checks each one against the clause or schedule it came from before it is published here.

Medicare levy thresholds, 2026-27: The ATO has not published 2026-27 Medicare levy reduction thresholds. These are the 2025-26 thresholds carried forward and will be corrected when the ATO publishes.

It converts the amount you enter into its annual equivalent, applies the progressive tax brackets slice by slice, adds the Medicare levy including its shade-in band, and divides the result back into every pay cycle. Employer superannuation is calculated on your gross salary and shown separately, because it is paid on top of your pay rather than deducted from it.

The default calculation excludes the Low Income Tax Offset, because PAYG withholding excludes it too: including it by default would make the figure disagree with your payslip. You can switch it on to see your annual position instead. Also not yet modelled: HECS and HELP repayments, the Medicare levy surcharge, salary sacrifice, novated leases, Division 293, and non-resident and working holiday maker rates. Where a calculation is not supported we would rather leave it out than approximate it.

The calculation engine is covered by automated tests that run on every build. They check our output against worked examples published by the ATO, including the ATO’s own Medicare levy reduction example, and they assert that every bracket boundary matches the cumulative figure the ATO publishes. The tests also check that take-home pay never decreases as gross pay rises, so no income level is ever worse off from earning one more dollar.

If you find a figure that does not match the ATO or Fair Work, tell us and we will fix it and record the change. Our Editorial Policy sets out how corrections are handled.