Pay Rise Calculator

How much of a pay rise do you keep?

A raise is taxed at your marginal rate, the rate on your top bracket, not at the average rate you pay across your whole income. Someone on $90,000 keeps about 68 cents of every extra dollar once the 30% bracket and the 2% Medicare levy are counted.

A study debt changes the arithmetic sharply. Above the $69,528 HECS and HELP threshold it adds 15 cents in the dollar, cutting what you keep on $90,000 to about 53 cents.

What you keep from the next dollar, FY2026-27

Includes income tax, the Medicare levy and the low income tax offset as it phases out. Calculated on the same engine as the calculator above, for an Australian resident in FY2026-27.

The bracket myth

The single most persistent belief about Australian tax is that a raise can push you into a higher bracket and leave you worse off. It cannot. Only the income above each threshold is taxed at the higher rate. Crossing from the 30% bracket into the 37% bracket at $190,000 means the dollar after $190,000 is taxed at 37%, while everything below it is taxed exactly as it was before.

Turning down a raise to stay in a bracket always costs you money. There is no income at which earning one more dollar leaves you with less after income tax.

Where the rate genuinely does spike

The headline brackets are not the whole story. Several thresholds withdraw an offset or switch on a levy as your income rises, which lifts the effective rate on the income in that range above the bracket rate:

• The Medicare levy shade-in. Between $28,011 and $35,013 the levy phases in rather than applying in full, so income in that band carries an extra effective cost on top of the bracket rate.
• The low income tax offset withdrawing. LITO reduces by 5 cents in the dollar from $37,500 and by 1.5 cents in the dollar from $45,000 until it runs out at $66,667. Every dollar in those ranges takes some of the offset away, so the effective rate is above the bracket rate.
• The HECS and HELP threshold at $69,528. The largest single step. It is now marginal rather than a cliff, so the extra 15 cents applies only to income above the threshold, but it is still 15 cents.
• The Medicare levy surcharge at $105,000. This one is a genuine cliff, not a phase-in. Without an appropriate level of private hospital cover, crossing it applies the surcharge to your whole income, not just the part above the threshold. See the full explanation.

Your super goes up too

The super guarantee is a percentage of your wage, so a raise lifts it automatically. At the FY2026-27 rate of 12%, a $5,000 raise adds $600 a year to your super on top of the cash. That is real value the pay slip does not show you, and it is taxed at 15% inside the fund rather than at your marginal rate.

The exception is a package that is quoted as inclusive of super. There, a rise in the package figure has to be split between cash and super, so the cash increase is smaller than the headline. Check which basis your contract uses before you compare two offers, and use the superannuation calculator to put them on the same footing.

Negotiating: the numbers worth taking in

The gross figure is the one you negotiate, but the after-tax difference is what changes your life, and on a raise those two numbers are further apart than people expect. On $90,000, a $10,000 raise is worth about $5,300 a year in the hand if you have a study debt, against about $6,800 without one.

Two things worth checking before you accept. Whether the figure is base or total package, because a $120,000 package including super is a lower cash salary than $120,000 plus super. And whether anything non-cash moves with it, since salary sacrificed items, a novated lease or additional leave can be worth more after tax than the equivalent cash. Run both offers through this calculator on the same basis before comparing them.

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