How to Calculate Take-Home Pay in Australia

Written by edriaan koening
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How to Calculate Take-Home Pay in Australia
Calculate your Australian take-home pay. (calculator image by Zbigniew Nowak from Fotolia.com)

Take-home pay refers to the amount of salary, wages and other employment income an employee receives, including bonuses and excluding taxes, health care premiums and retirement savings plans. In Australia, each payment is deducted for tax, and the employee can claim tax refund at the end of every financial year on items such as work-related expenses, car expenses, travel expenses and self-education expenses. The portion of tax withheld may differ for minors under 18 years of age and non-residents of Australia.

Skill level:
Moderately Challenging

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Instructions

  1. 1

    Find out your annual gross income and calculate tax based on the current tax rates. For the 2009-2010 financial year, if your taxable income is £3,900 and below, no tax would apply. If your income is between £3,900 and £22,750, the tax would be 15 per cent of the portion of income over £3,900. If your income is between £22,750 and £52,000, the tax would be £2,827 plus 30 per cent of the portion of income over £22,750. If your income is between £52,000 and £117,000, the tax would be £11,602 plus 38 per cent of the portion of income over £52,000. If your income is £117,000 or over, the tax would be £36,302 plus 45 per cent of the portion of income over £117,000.

    For example, a person earning an annual gross income of £130,000 would calculate his tax as follows = £36,302 + (.45 x £13,000) = £42,152.

  2. 2

    Calculate the Medicare levy on your gross annual income. Using the income figure from the previous example, the Medicare levy would be 1.5 per cent of £130,000, which is £1,950.

  3. 3

    Determine whether you have to pay Medicare levy surcharge (MLS). If you or your dependents do not have private patient hospital coverage and your taxable income is above the applicable threshold, you need to pay 1 per cent of your taxable income for MLS. For the 2009-2010 financial year, the threshold is £47,450 for a single person with no dependents, and £94,900 for a family with one dependent child or none. A family with more children have higher MLS thresholds.

    If a single person earns a gross annual income of £130,000, he would have to pay 1 per cent of it for MLS, which is £1,300.

  4. 4

    Calculate the total tax you need to pay, and deduct the amount from your gross annual income.

    In the example, this amount would be £41,977 + £1,950 + 2,000 = £45,227. The take home pay would be obtained by deducting tax from £130,000, which is £84,773.

Tips and warnings

  • The calculation of your take-home pay may differ depending on your unique situation, due to factors such as education loan repayments and applicable benefits.

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