In short
For 2026–27 Australian residents pay nil on the first $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above, plus the 2% Medicare levy, with HECS-HELP repayments at 15% of income over $69,528 and 12% employer super paid on top. On $90,000 with a HELP debt that is $17,520 tax, $1,800 levy and $3,071 HELP, leaving $67,609 a year ($2,600 a fortnight) plus $10,800 of super.
An Australian payslip has more moving parts than most: income tax at the new 2026–27 rates, the low income tax offset that quietly lifts the tax-free threshold, the 2% Medicare levy and its surcharge for higher earners without hospital cover, a HECS-HELP repayment if you studied, and 12% superannuation paid on top of salary rather than out of it. This guide explains each piece for the year running 1 July 2026 to 30 June 2027, shows how salary sacrifice changes the arithmetic, and works a $90,000 salary through to the fortnightly amount.
Open the Australian income tax calculator →
Resident tax rates for 2026–27
The first marginal rate fell from 16% to 15% on 1 July 2026, worth up to $268 a year, and is legislated to fall again to 14% on 1 July 2027. The other thresholds are unchanged. Tax is charged on taxable income (assessable income less deductions) in slices.
| Taxable income | Tax on this income (excluding Medicare levy) |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,020 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,370 plus 45c for each $1 over $190,000 |
Foreign residents get no tax-free threshold and pay 30% from the first dollar to $135,000, then 37% and 45%, but no Medicare levy.
The low income tax offset (LITO)
LITO is worth up to $700 for taxable incomes up to $37,500. It then reduces by 5 cents per dollar to $45,000 (where it is $325) and by 1.5 cents per dollar after that, reaching nil at $66,667. It is non-refundable and applied automatically on assessment. Because it cancels the first $700 of tax, the real tax-free point is where 15% × (income − 18,200) = 700: about $22,867.
Medicare levy and the surcharge
The Medicare levy is 2% of taxable income, not of tax. For a single person it phases in between $28,011 and $35,013 (the 2025–26 thresholds, which carry over until the new year’s figures are set) at 10 cents per dollar above the lower limit, so nobody under $28,011 pays it and the full 2% applies from $35,013.
The Medicare levy surcharge (MLS) is a separate charge for people without private hospital cover. For 2026–27 the single tiers are: nil up to $105,000, 1% from $105,001 to $123,000, 1.25% to $164,000 and 1.5% above. Family thresholds are double ($210,000, $246,000, $328,000) and rise by $1,500 for each dependent child after the first. The surcharge is on the whole of your income for MLS purposes, not the slice above the threshold — at $110,000 without cover it is 1% × 110,000 = $1,100. The Medicare levy surcharge calculator compares the surcharge with the cost of cover.
HECS-HELP repayments
Since 1 July 2025 compulsory repayments are marginal, like income tax, rather than a flat percentage of the whole income. For 2026–27:
| Repayment income | Repayment |
|---|---|
| $0 – $69,528 | Nil |
| $69,529 – $129,717 | 15% of income over $69,528 |
| $129,718 – $186,050 | $9,028 plus 17% of income over $129,717 |
| Over $186,050 | 10% of total repayment income |
Repayment income is taxable income plus reportable fringe benefits, reportable super contributions, net investment losses and exempt foreign income — so salary sacrificing into super does not reduce the repayment. Your employer withholds extra tax once you tick the HELP box on the TFN declaration; the actual repayment is calculated on your return. The debt carries no interest; it is indexed each 1 June at the lower of CPI and the wage price index. The HECS-HELP repayment calculator projects years to clear and whether voluntary payments beat a mortgage offset.
Superannuation: the guarantee and salary sacrifice
Your employer must pay 12% of ordinary time earnings into super on top of your salary. The contribution is taxed at 15% inside the fund rather than at your marginal rate, which is the whole point of the concession. A package advertised as “including super” is divided by 1.12 to find the cash salary.
Concessional contributions — the employer guarantee plus anything you salary sacrifice or claim as a personal deduction — are capped at $32,500 for 2026–27 (up from $30,000). If your total super balance was under $500,000 on 30 June, unused cap from the previous five years can be added. Above $250,000 of income plus contributions, Division 293 tax lifts the contributions rate to 30%. Non-concessional (after-tax) contributions are capped at $130,000, or $390,000 with the three-year bring-forward.
What salary sacrifice saves
Each dollar sacrificed is taxed at 15% in the fund instead of your marginal rate plus Medicare. In the 30% bracket that is a 17-cent saving per dollar; at 37% it is 24 cents; at 45% it is 32 cents. Below $45,000 the marginal rate is 15% plus Medicare, so the gain is minimal. Since 2020 employers must calculate the 12% guarantee on your pre-sacrifice salary. The salary sacrifice calculator and the superannuation calculator show the cap headroom and the projected balance with and without the extra contribution.
Worked example: $90,000 salary
Assumptions: resident, $90,000 taxable income excluding super, HECS-HELP debt, private hospital cover, tax-free threshold claimed.
Income tax. 15% × (45,000 − 18,200) = $4,020 plus 30% × (90,000 − 45,000) = $13,500: $17,520. LITO is nil above $66,667.
Medicare levy. 2% × 90,000 = $1,800. No surcharge — hospital cover is held (and $90,000 is below the $105,000 tier anyway).
HECS-HELP. 15% × (90,000 − 69,528) = $3,071, roughly $118 a fortnight.
Total $22,391, a 24.9% effective rate. Take-home $67,609 a year — $5,634 a month or $2,600 a fortnight. Without a HELP debt the figures are $19,320 of tax and levy and $70,680 take-home ($2,718 a fortnight). Employer super of 12% × 90,000 = $10,800 is paid on top, so the total package is $100,800.
Add $5,000 of salary sacrifice. Taxable income falls to $85,000; tax and levy fall from $19,320 to $17,720, saving $1,600 (32%). The fund deducts 15% × 5,000 = $750, so the net gain is $850 and $4,250 lands in super while take-home drops by $3,400. Concessional contributions are $10,800 + $5,000 = $15,800, well inside the $32,500 cap. The HELP repayment stays at $3,071 because the $5,000 is added back to repayment income.
Each extra $1,000 earned at this level is taxed at 47% — 30% tax, 2% levy and 15% HELP — so you keep $530. The pay calculator converts any salary to weekly, fortnightly and monthly take-home with super shown separately.
What people get wrong
- Counting super as part of take-home. It is paid on top of salary and locked away until a condition of release — usually age 60 and retired, or 65 — apart from the First Home Super Saver scheme for voluntary contributions.
- Expecting salary sacrifice to cut HECS. Reportable super contributions are added back to repayment income, and to income for the Medicare levy surcharge.
- Treating the MLS like a marginal charge. It applies to all of your income once you cross the tier, so a $1 pay rise over $105,000 can cost more than $1,000 without cover.
- Claiming the tax-free threshold with two employers. Claim it from one only; otherwise too little tax is withheld and a bill arrives at assessment.
- Exceeding the concessional cap by accident. Employer contributions count toward the $32,500; the excess is taxed at your marginal rate with a 15% offset plus an excess-contributions charge.
Frequently asked questions
How much tax do I pay on $100,000 in 2026–27?
$20,520 of income tax plus $2,000 Medicare levy, $22,520 in total (22.5%), leaving about $77,480 before any HECS-HELP repayment or surcharge.
What is the tax-free threshold?
$18,200 of taxable income, and with LITO you pay no net tax until about $22,867. Claim it from one employer only on the TFN declaration.
When does the 14% rate start?
1 July 2027 — the rate on income between $18,200 and $45,000 falls from 15% to 14%, worth up to another $268 a year.
Should I pay off my HECS early?
Usually not: there is no interest, only indexation at the lower of CPI and wage growth, and the debt is written off on death. Voluntary repayments make sense mainly when indexation exceeds the return on your alternatives or to lift take-home before a home-loan application.
Is super taxed when I retire?
Withdrawals from a taxed fund are tax-free from age 60, and earnings in pension phase are untaxed up to the $2 million transfer balance cap.
Sources
- ATO — Tax rates: Australian residents (2026–27 rates and LITO; checked 10 October 2026).
- ATO — Medicare levy; Medicare levy surcharge income thresholds and rates (2026–27 MLS tiers; 2025–26 low-income thresholds; checked 10 October 2026).
- ATO — Study and training support loans rates and repayment thresholds (2026–27 HELP thresholds; checked 10 October 2026).
- ATO — Super guarantee; contributions caps; Division 293 tax (12% SG, $32,500 cap, $130,000 cap, $2 million transfer balance cap; checked 10 October 2026).