Australia Taxable Income Calculator
Use this tool to estimate your taxable income and approximate annual income tax in Australia. Enter yearly amounts in AUD.
What is taxable income in Australia?
In plain English, your taxable income is the amount the ATO uses to calculate how much tax you owe. It is not always the same as your gross salary and it is not always the same as cash in your bank account.
The broad formula is:
- Taxable income = Assessable income − Allowable deductions
Assessable income includes salary, wages, interest, dividends, rental profits, and other taxable amounts. Allowable deductions include eligible work expenses, deductible super contributions, tax agent fees, and some donations.
How this calculator works
Step 1: Add assessable income
Enter your annual salary and any other assessable income. This gives an estimated total income amount before deductions.
Step 2: Subtract deductions
Enter deductions you are entitled to claim. The calculator combines these to estimate your taxable income. If deductions exceed income, taxable income is shown as zero.
Step 3: Estimate tax
The tool applies simplified Australian individual tax brackets and then optionally adds the Medicare levy. If you enter tax offsets, those are subtracted from estimated tax payable.
What counts as assessable income?
- Salary and wages from employment
- Bonuses, overtime, allowances (where taxable)
- Interest from bank accounts and term deposits
- Rental income (after allowable property expenses, if you enter a net amount)
- Freelance or side-business income
- Certain government payments and investment distributions
Some amounts are tax-free or treated differently. Always confirm with current ATO rules.
Common deductible expenses
Work-related expenses
You may claim expenses directly related to earning your income, such as tools, uniforms, and eligible home office costs. You must keep records and only claim the work-use portion.
Other deductions
- Gifts or donations to deductible gift recipients
- Tax agent and accounting fees
- Income protection insurance premiums (if eligible)
- Deductible personal super contributions (with correct notices and timing)
Remember: a deduction lowers taxable income; it does not give you back the full amount spent.
Quick example
Suppose you earn $90,000 salary, have $5,000 other income, and claim $6,000 total deductions.
- Assessable income = $95,000
- Deductions = $6,000
- Taxable income = $89,000
The calculator then applies tax rates to estimate income tax, adds Medicare levy if selected, and subtracts offsets if entered.
Important notes for better accuracy
- Use annual figures for all fields.
- Enter realistic deduction amounts backed by records.
- If you are non-resident for tax purposes, select non-resident rates.
- Medicare levy generally applies to residents, with exceptions and income thresholds.
- This tool does not model every offset, surcharge, or debt repayment rule.
Frequently asked questions
Is taxable income the same as gross income?
No. Gross income is before deductions. Taxable income is after allowable deductions.
Do tax offsets reduce taxable income?
No. Offsets generally reduce tax payable, not taxable income itself.
Should I include superannuation guarantee (SG) in salary?
Usually your quoted salary field should reflect taxable salary/wages. Employer SG is generally taxed in the fund and is not usually entered as personal assessable income.
Can this replace my tax return?
No. It is a planning tool. Your final position depends on full ATO rules and your exact circumstances.
Final thought
If your goal is smarter tax planning, the most valuable habit is keeping clean records year-round. A simple calculator gives direction, but good documentation and professional advice turn estimates into reliable outcomes.