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Calculate your tax refund or amount owing for 2022/23, 2023/24 and 2024/25 financial years
Understanding Your Tax Return Calculation
Income Tax Calculation
Your income tax is calculated using a progressive tax system based on your taxable income (gross income minus deductions). The more you earn, the higher percentage you pay on amounts above certain thresholds.
New Tax Cuts Coming in 2026 and 2027
The Australian Government is delivering more tax cuts for every Australian taxpayer in 2026 and 2027, on top of the tax cuts that have been rolling out since 1 July 2024.
Personal Tax Rates for 2026-27 and 2027-28
| Taxable Income ($) | Rates in 2024-25 and 2025-26 (%) | Rates in 2026-27 (%) | Rates in 2027-28 (%) |
|---|---|---|---|
| 0 - 18,200 | Tax free | Tax free | Tax free |
| 18,201 - 45,000 | 16 | 15 | 14 |
| 45,001 - 135,000 | 30 | 30 | 30 |
| 135,001 - 190,000 | 37 | 37 | 37 |
| 190,001 and over | 45 | 45 | 45 |
Estimated Annual Tax Cuts Compared to 2023-24
| Income Level | 2024-25 and 2025-26 | 2026-27 | 2027-28 onwards |
|---|---|---|---|
| Full-time national minimum wage - $47,627 | $870 | $1,138 | $1,406 |
| Median income - $72,592 | $1,494 | $1,762 | $2,030 |
| Average income - $79,000 | $1,654 | $1,922 | $2,190 |
| Average full-time income - $103,000 | $2,254 | $2,522 | $2,790 |
Source: Fair Work Ombudsman; ABS, Employee earnings, Aug 2024; ABS, Average Weekly Earnings, Nov 2024.
Medicare Levy Low-Income Thresholds for 2023-24
| Category | Low-income threshold (2023-24) | Full Medicare levy applies above (2023-24) |
|---|---|---|
| Singles | $26,000 | $32,500 |
| Single Seniors and Pensioners | $41,089 | $51,361 |
| Families (not eligible for Seniors and Pensioner Tax Offset) | $43,846 (plus $4,027 for each dependent child) | $54,807 (plus $5,034 for each dependent child) |
| Families (Senior and Pensioner) | $57,198 (plus $4,027 for each dependent child) | $71,497 (plus $5,034 for each dependent child) |
Medicare Levy Low-Income Thresholds for 2024-25
| Category | Low-income threshold (2024-25) | Full Medicare levy applies above (2024-25) |
|---|---|---|
| Singles | $27,222 | $34,027 |
| Single Seniors and Pensioners | $43,020 | $53,775 |
| Families (not eligible for Seniors and Pensioner Tax Offset) | $45,907 (plus $4,216 for each dependent child) | $57,383 (plus $5,270 for each dependent child) |
| Families (Senior and Pensioner) | $59,886 (plus $4,216 for each dependent child) | $74,857 (plus $5,270 for each dependent child) |
The Medicare levy phases in at 10 cents for each dollar above the relevant low-income threshold until the full Medicare levy at 2 per cent applies.
Source: Budget.gov.au - New tax cuts for every Australian taxpayer
Tax Deductions
Tax deductions reduce your taxable income. Common deductions include:
- Work-related expenses (uniforms, tools, training)
- Vehicle and travel expenses for work purposes
- Home office expenses
- Self-education expenses related to your current employment
- Donations to registered charities
Always keep receipts and documentation for all claimed deductions.
Tax Withheld and Refunds
Throughout the year, your employer withholds tax from your salary and remits it to the ATO. When you lodge a tax return:
- If your total tax payable is less than the tax withheld, you'll receive a refund
- If your total tax payable is more than the tax withheld, you'll need to pay the difference
Low Income Tax Offset (LITO)
The Low Income Tax Offset (LITO) is a tax offset that reduces the amount of income tax you pay. The amount of LITO you receive depends on your taxable income:
- $37,500 or less: You get the maximum offset of $700
- $37,501 to $45,000: $700 minus 5 cents for every dollar above $37,500
- $45,001 to $66,667: $325 minus 1.5 cents for every dollar above $45,000
LITO reduces your tax payable but cannot reduce it below zero. Any unused offset cannot be refunded.
Medicare Levy
The Medicare levy helps fund Australia's public health system (Medicare). Most Australian taxpayers pay the Medicare levy as part of their income tax.
The levy is calculated as follows:
- No Medicare levy is payable for incomes below the low-income threshold
- A reduced levy applies for incomes in the phase-in range (10% of the excess over the low-income threshold)
- The full Medicare levy (2% of taxable income) applies above the full levy threshold
Some taxpayers may be exempt from paying the Medicare levy, or may pay a reduced amount, depending on their circumstances.