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Tax on Bonus Calculator Australia

On a $90,000 salary paid fortnightly, a $10,000 bonus has $3,224 withheld and adds $3,200 to your tax for 2026-27, so $6,800 of it is yours once you lodge. There is no bonus tax rate in Australia. A bonus is declared as salary and wages and taxed with the rest of your income at your marginal rate, while your employer withholds from it under the ATO Schedule 5 method. Commission is withheld and taxed the same way. Enter your salary, the bonus or commission and your pay cycle, weekly, fortnightly or monthly, to see both figures for 2026-27 and the gap that is refunded or owed at tax time.

Your details

Gross pay from this employer for the year, bonus excluded.

Schedule 5 spreads a bonus or commission over the year, or, if payroll chooses, over the pays a shorter set period covers. One for a single week, fortnight or month goes through the normal tax table with that pay.

Other jobs or investments. It changes the tax-time figure only, not the withholding.

Tax withheld from the bonus

$3,224

Withheld from the bonus
$3,224
Withholding rate on the bonus
32.2%
Bonus after withholding
$6,776
Tax the bonus adds at tax time
$3,200
As a share of the bonus
32.0%
Bonus kept once you lodge
$6,800
Over-withheld, back at tax time
$24
Withheld if added to one pay instead
$4,272, 42.7%
Normal pay a fortnight
$3,461.54
Withheld from normal pay a fortnight
$744
Withheld from the whole pay, bonus included
$3,968

Schedule 5 spreads the payment over 26 pays, finds the extra the tax table withholds on one pay's share, and multiplies it back up, never above 47% of the payment. Paid in its own pay run, only the bonus line is withheld from it. There is no bonus tax rate. At tax time the bonus is taxed with the rest of your income, and the difference between the two figures is refunded or owed then.

Worked examples, with the arithmetic.

The same sums the tool runs, on real figures. Every number below is computed by the tested engine from the published rates, so the prose and the tool can never disagree.

How much tax comes out of a $10,000 bonus on $90,000?

normal pay $3,461 a fortnight       = $744 withheld
$10,000 / 26, cents dropped         = $384
withheld on $3,845                  = $868
($868 - $744) x 26                  = $3,224
limit, 47% of the bonus             = $4,700
withheld from the bonus             = $3,224
tax the bonus adds at tax time      = $3,200.00

Payroll withholds $3,224, 32.2% of the bonus, and pays $6,776. Schedule 5 spreads the bonus over 26 fortnights, adds one fortnight's share to a normal pay and multiplies the extra withholding back up, so the bonus is withheld at close to the rate of the bracket it lands in. At tax time the $10,000 sits on top of $90,000 in the 30c bracket and adds $3,000.00 of income tax and $200.00 of Medicare levy. The $24 withheld above that comes back when you lodge.

What if payroll adds the whole bonus to one pay?

normal pay $3,461.54 a fortnight    = $744 withheld
with the bonus, $13,461.54          = $5,016 withheld
extra withheld on the bonus         = $4,272, 42.7%
each dollar of pay over $7,306      = 47c withheld

Run through the normal table as one fortnight's pay, the bonus loses $4,272, 42.7% of it, against $3,224 under Schedule 5. The table reads a $13,461.54 fortnight as if every fortnight paid that much, so every dollar over $7,306 is withheld at 47c, the top bracket rate of 45c plus the Medicare levy. The ATO keeps that route for a bonus that relates to a single pay period. The tax still settles at assessment, where this bonus costs $3,200.00. The $1,072 withheld above that comes back when you lodge.

What changes when a bonus meets a HELP debt?

tax withheld on the bonus           = $3,224
study loan withheld on the bonus    = $1,508
together                            = $4,732
limit, 47% of $10,000               = $4,700 withheld
tax and repayment at tax time       = $4,700.00

With a loan declared, the Schedule 8 component is spread the same way and added, which takes the withholding to $4,732, over the limit, so $4,700 is withheld. Here a bonus on an ordinary salary really does cost 47%: on $90,000 each extra dollar pays the 30c bracket rate, 2c of Medicare levy and a 15c compulsory repayment, $4,700.00 in all. The repayment comes off the loan rather than going as tax.

Does Method B give a different answer?

first bonus, Method A               = $3,224
first bonus, Method B(ii)           = $3,224
second $5,000 bonus, Method A       = $1,612
second $5,000 bonus, Method B(ii)   = $1,560

Not for the first bonus on a steady salary. Method B(ii) starts from average earnings to date, which equal the normal pay, so both give $3,224, and a bonus paid in its own pay run is withheld the same as one paid with the normal pay. A second bonus in the same year is where they part: Method B(ii) spreads both, $15,000 over 26 fortnights, and subtracts the $3,224 already withheld, giving $1,560 against $1,612 under Method A. The ATO accepts either.

How much tax comes out of a $15,000 quarterly commission?

spread over 26 fortnights           = $4,784 withheld, 31.9%
spread over the 6 it covers         = $5,604 withheld, 37.4%
tax it adds at tax time             = $4,800.00

On a $120,000 salary paid fortnightly, Schedule 5 withholds $4,784 from a $15,000 commission spread over the year. The ATO also lets payroll divide a commission for a set period under 12 months by the pays that period covers, here 6 fortnights for a quarter. Each pay's share is then $2,500 rather than $576, which reaches higher rows of the tax table and withholds $5,604. Either way the commission is taxed with the rest of your income when you lodge, where it adds $4,800.00. On the shorter spread, the $804 withheld above that comes back when you lodge.

Is this accurate, and how does it work?

The method is published rather than described. Nothing here is a black box, and the limits are listed as plainly as the workings.

  1. 1Use the table the ATO directs. A bonus for work across more than one pay period, or for no set period, is withheld under Schedule 5, the ATO tax table for back payments, commissions, bonuses and similar payments. A bonus for work in a single week, fortnight or month is added to that pay and run through the regular Schedule 1 table instead. The ATO draws that line itself, the same line for a commission, and the calculator follows the one you choose. Regular pay is withheld from the tables on ATO Tax Tables instead.
  2. 2Spread the bonus over the year, Method A. The normal pay for one period, cents dropped, goes through Schedule 1: scale 2 with the tax-free threshold claimed, scale 1 without. The bonus is divided by 52, 26 or 12 pays, cents dropped, added to that normal pay and run through the same table. The extra it withholds is multiplied back by the number of pays, and that is the withholding on the bonus. For a bonus or commission covering a set period under 12 months, payroll may divide by the pays that period covers instead, which the third option applies. With a study loan declared, the Schedule 8 component is worked out the same way and added. The engine reproduces every step of the ATO worked examples to the dollar.
  3. 3Hold it to 47% of the bonus. Withholding on the bonus, study loan component included, is limited to 47% of the bonus, and the limit never touches the normal pay. It is reached in the top bracket, and in the 30c bracket with a study loan in its 15c band, since 30c, the 2c Medicare levy and 15c make 47c. A bonus added to a single pay has no such limit.
  4. 4Paid with the normal pay or on its own. Paid in the same run, the pay withholds the bonus amount plus the normal amount, and both are shown. Paid in a separate run, the bonus amount is the same on a steady salary: Method B(ii), the other method the ATO accepts, starts from average earnings to date, which then equal the normal pay, and gives the identical figure for the first bonus of the year.
  5. 5Assess the year with and without it. At tax time the bonus is added to the salary and any other income entered, and taxed on the resident scale with the Medicare levy and the Low Income Tax Offset, the same assessment the Income Tax Calculator runs. The tax the bonus adds is the year with it less the year without it. Only the slice of income inside each of the Tax Brackets pays that rate, so a bonus that crosses a threshold is split across two rates.
  6. 6Show the gap, signed. Withheld less assessed is what comes back at tax time or, when negative, what is owed. The figure for the other route, one pay or spread over the year, sits beside it, so a payslip that used the other table can be checked.

What each extra dollar of a bonus or commission costs.

At tax time a bonus sits on top of your salary, so what it costs depends on where your income lands. Each figure is the tax on one more dollar of income for 2026-27: the bracket rate plus the Medicare levy, with the levy’s 10c shade-in and the low income tax offset taper where they apply. A bonus that crosses a boundary pays each rate on its own slice. The Medicare levy thresholds for 2026-27 are the prior year carried forward, as the ATO has not published them.

Tax on each extra dollar of income for 2026-27, by taxable income.
Taxable income with the bonusTax on each extra dollar
$0 to $22,8670c
$22,867 to $28,01115c
$28,011 to $35,01325c
$35,013 to $37,50017c
$37,500 to $45,00022c
$45,000 to $66,66733.5c
$66,667 to $135,00032c
$135,000 to $190,00039c
$190,000 and over47c

Tax on a $5,000 or $10,000 bonus at common salaries.

Paid fortnightly with the tax-free threshold claimed and no study loan. Withheld is the Schedule 5 Method A figure, spread over the year and capped at 47%; the tax-time figure is what the bonus adds to the year. A negative difference is owed when you lodge.

Tax withheld from a bonus and the tax it adds at tax time for 2026-27.
SalaryBonusWithheldAdds at tax timeKeptDifference
$40,000$5,000$884$1,100$3,900-$216
$40,000$10,000$2,496$2,775$7,225-$279
$60,000$5,000$1,612$1,675$3,325-$63
$60,000$10,000$3,224$3,300$6,700-$76
$90,000$5,000$1,612$1,600$3,400$12
$90,000$10,000$3,224$3,200$6,800$24
$120,000$5,000$1,612$1,600$3,400$12
$120,000$10,000$3,172$3,200$6,800-$28
$150,000$5,000$1,924$1,950$3,050-$26
$150,000$10,000$3,900$3,900$6,100$0
$200,000$5,000$2,340$2,350$2,650-$10
$200,000$10,000$4,700$4,700$5,300$0

Commission is taxed the same way.

Schedule 5 is the ATO’s tax table for back payments, commissions, bonuses and similar payments, and its methods apply to a commission exactly as they apply to a bonus. A commission for work in a single week, fortnight or month, such as one on a month’s sales paid with that month’s pay, is added to the pay and run through the regular tax table. One for more than one pay period, or for no set period, is withheld under Method A or Method B(ii), capped at 47% of the commission. For a set period under 12 months, such as a quarter, payroll may instead divide it by the pays that period covers: choose that option above. At tax time a commission is salary or wages like the rest of your pay, so it costs the same as a bonus of the same size.

What this does not cover.

  • It covers bonuses, commissions and similar payments under Schedule 5 Method A, and bonuses for a single pay period under the regular table. Back payments and lump sums in arrears, including Method B(i), are not modelled. The Back Pay Calculator applies Methods B(i) and B(ii).
  • Method B(ii) matches Method A for the first bonus of the year on a steady salary. A second bonus in the same year, or pay that moves through the year, changes the Method B(ii) figure, and payroll may use either method.
  • For a set period under 12 months it divides by the number of pays you enter. Payroll may still spread such a payment over the full year instead, and the calculator shows that figure beside it.
  • It uses scales 1 and 2 only. Foreign residents, working holiday makers, payees with no TFN, who are withheld 47% of every payment, Medicare levy variations and withholding variations are not modelled.
  • The tax-time figure is income tax, the Medicare levy, the low income tax offset and, where a loan is declared, the compulsory study loan repayment, all on taxable income. Deductions, the Medicare levy surcharge and other offsets are outside it.
  • It does not work out super on the bonus. It runs on the 2026-27 schedules only, so there is no year switch on this page.

Where these figures come from.

Every rate this site uses is listed on the Methodology page.

Common questions.

Is a bonus taxed at a higher rate in Australia?

No. The ATO lists bonuses, retention bonuses included, among the salary and wage payments you declare in your tax return, so a bonus is added to the rest of your income for the year and taxed at the resident rates. It feels dearer because it sits on top of your salary, where it is taxed at your marginal rate rather than your average one. A pay rise sits in the same place, and the Pay Rise Calculator shows how much of one you keep. What differs is the withholding on the day it is paid, and that settles when you lodge.

Why was my bonus taxed at 47%?

Almost always because of how it was withheld, not how it is taxed. 47% turns up twice in withholding. It is the most Schedule 5 lets payroll withhold from a bonus, and it is the rate the regular tax table applies to every dollar of a pay above its top threshold, which a bonus can reach when it is added to a single pay. 47c is the top bracket rate of 45c plus the 2c Medicare levy, so at assessment only income in the top bracket is taxed that way. The real exception is a study loan: with income in the 30c bracket and the repayment in its 15c band, 30c, 2c and 15c add to exactly 47c, so the bonus does cost that much, part of it paying down the loan.

How is commission taxed in Australia?

Exactly like a bonus. Schedule 5 is the ATO tax table for back payments, commissions, bonuses and similar payments, and Method A applies to all of them. A commission for work in a single week, fortnight or month is added to that pay and run through the regular table. One for a longer or open period is spread over the year, or over the pays a set period under 12 months covers, and capped at 47% of the commission. At tax time it is part of your salary and wages and taxed at your marginal rate, so the tax-time figure above is the commission tax too. Enter the commission as the bonus and choose the period it covers.

Why is tax on my commission higher in some pays?

Usually because of the period it was spread over. A commission spread over the 6 fortnights of a quarter puts a larger slice on each pay than one spread over 26, and a larger slice can reach higher rows of the tax table. A commission added to a single pay is read as if every pay were that size. Either way the withholding is a prepayment, and the tax on the commission is settled at your marginal rate when you lodge, as the quarterly commission example above shows.

How does my employer work out tax on a bonus?

With Schedule 5, unless the bonus is for work in a single pay period. Under Method A, the usual one, payroll divides the bonus by the number of pays in a year, adds that slice to one normal pay and looks up how much more the tax table withholds. The extra is multiplied back by the number of pays, capped at 47% of the bonus, and withheld from it. A bonus for a single week, fortnight or month is simply added to that pay and run through the regular table. Method B(ii), which the ATO also accepts, works from average earnings for the year to date and gives the same answer on a steady salary for the first bonus of the year.

Will I get the tax on my bonus back?

Only the part withheld beyond what the bonus actually costs. At tax time the ATO works out the tax on your whole income for the year and takes off everything withheld, from the bonus and from every pay. On a steady salary Schedule 5 lands close to the real cost, so the refund from the bonus is usually small, and at lower incomes it can fall short and leave a little to pay. A bonus run through the regular table as one pay is where large refunds come from. The calculator shows the gap for your figures. The refund for the whole year is worked out on the Tax Return Calculator. Mid-year, the YTD Income Calculator shows where the withholding on your payslip is heading, once the bonus is taken out of the year-to-date figures.

Does the tax-free threshold apply to a bonus?

Through the employer you claim it from. With the threshold claimed, Schedule 5 works from scale 2, which builds the threshold into the table. Without it, as in a second job, it works from scale 1, which withholds from the first dollar. At tax time the threshold applies once, to your total income, however many employers paid it, which the Second Job Tax Calculator works through for two jobs.

Can I reduce the tax on a bonus?

Not once you have earned it. The ATO says an effective salary sacrifice arrangement cannot include bonuses or commissions accrued before the arrangement is entered into, so sacrificing a bonus into super has to be agreed before the work it rewards. Done in time, the sacrificed amount is taxed in the fund rather than at your marginal rate, within the concessional contributions cap, and the Salary Sacrifice Calculator works out the saving. Otherwise a bonus is taxed like any other income, and deductions are what reduce it.

Does a bonus change my HECS repayment?

It can. The compulsory repayment is worked out on repayment income, which includes the bonus, so a bonus can lift the repayment or start one if your income was under the threshold. With a loan declared on your TFN or withholding declaration, Schedule 5 withholds a study loan component from the bonus by the same method, and the 47% limit applies to the two together. The HECS Repayment Calculator works out the repayment on any income.