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.
Related calculators
- Income taxEstimate resident income tax, LITO and the Medicare levy from taxable income for 2026–27.
- 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 2026-08-19
Estimates only. Not tax, legal or financial advice. Check official sources before relying on a figure.
Printed from OzCalc (ozcalc.com). Last reviewed 2026-08-19. Estimates only — not tax, legal or financial advice.