Updated for 2026-27 · ATO NAT 1004

PAYG Withholding Calculator Australia

Calculate the PAYG income tax to be withheld from any Australian pay — weekly, fortnightly, monthly or annual. Built to the current ATO Statement of Formulas with Medicare Levy, HELP/STSL and LITO.

FY 2025-26 & 2026-27 Weekly · Fortnightly · Monthly Medicare, HELP & LITO Instant · No signup
Calculate PAYG How PAYG works

PAYG withholding calculator

Income Details

Tax brackets and HELP thresholds vary by year.
$
Before tax, super, salary sacrifice or deductions.

Tax Settings

Claiming tax-free thresholdThe first $18,200 of income is tax-free for residents.
Include Medicare Levy (2%)With low-income shading for incomes under $34,027.
HELP / HECS / STSL debtAdds compulsory repayment if income above threshold.
Apply Low Income Tax Offset (LITO)Up to $700 offset reconciled at tax return.
Enter your pay to see PAYG withholding

Fill in the required fields — results update instantly.

  • Gross pay amount

How PAYG withholding is calculated

The ATO method: annualise income, apply progressive brackets, divide back to the pay period.

1

Annualise the pay

Multiply gross pay by pay periods per year (52, 26 or 12) to get annual equivalent.

annual = gross x periods
2

Apply tax brackets

Apply progressive tax rates, then add Medicare Levy, HELP/STSL and subtract LITO.

tax = brackets(annual) + medicare + help - lito
3

Divide back to period

Divide the annual tax by pay periods to get the PAYG amount to withhold each pay.

payg = tax / periods

How PAYG withholding works in Australia

PAYG (Pay As You Go) withholding is the system Australian employers use to deduct income tax from employee pay and forward it to the Australian Taxation Office. The amount withheld depends on the employee’s gross pay, pay frequency, residency status, whether the tax-free threshold is claimed, the Medicare Levy, any HELP/STSL debt, and certain tax offsets like the Low Income Tax Offset (LITO).

The ATO publishes tax tables (also called Schedule 1 – NAT 1004) that set out exactly how much to withhold for each combination of gross pay and pay frequency. The calculator above implements the same logic the ATO formulas use: annualise the income, apply the progressive tax brackets, and divide the result back to the pay period.

The PAYG formula: (annual_tax + medicare + help – lito) / pay_periods_per_year = PAYG withheld per period. The same gross income produces the same total annual tax regardless of how often you are paid.

How to calculate PAYG withholding step-by-step

  1. Annualise the gross pay. Weekly x 52. Fortnightly x 26. Monthly x 12. So $2,500 weekly = $130,000 annualised.
  2. Calculate income tax. Apply progressive brackets. For $130,000 in 2025-26: $0 on first $18,200, $4,288 at 16%, $25,500 at 30%. Total: $29,788.
  3. Add Medicare Levy and HELP. $130,000 x 2% = $2,600. HELP: ($130,000 – $67,000) x 15% = $9,450.
  4. Divide by pay periods. $41,838 / 52 = $804.58 per week PAYG. Net pay = $2,500 – $804.58 = $1,695.42.

2025-26 ATO tax brackets for PAYG withholding

Taxable incomeMarginal rate
$0 – $18,2000% (tax-free threshold)
$18,201 – $45,00016%
$45,001 – $135,00030%
$135,001 – $190,00037%
$190,001+45%

2026-27 ATO tax brackets – what changes from 1 July 2026

From 1 July 2026, the second bracket reduces from 16% to 15% as part of the legislated Stage 3+ tax cuts. This saves up to $268 per year for any worker earning above $45,000.

Taxable incomeMarginal rate
$0 – $18,2000% (tax-free threshold)
$18,201 – $45,00015% (reduced from 16%)
$45,001 – $135,00030%
$135,001 – $190,00037%
$190,001+45%

The tax-free threshold and PAYG

The tax-free threshold is the first $18,200 of annual income on which no income tax is payable for Australian residents. You claim it on your Tax File Number Declaration with one employer.

  • Single job: claim the threshold.
  • Multiple jobs: claim only on your highest-earning job. Other employers withhold from the first dollar.
  • Foreign residents: not eligible. PAYG starts at 30% from the first dollar.

Medicare Levy and PAYG withholding

Annual incomeMedicare Levy
$0 – $27,2220% (exempt)
$27,223 – $34,027Phased in at 10c per dollar over threshold
$34,027+Full 2%

HELP and STSL repayments through PAYG

Repayment incomeCompulsory repayment
$0 – $67,000Nil
$67,001 – $125,00015% of income above $67,000
$125,001 – $179,285$8,700 + 17% of income above $125,000
$179,286+10% of total repayment income (flat)

The Low Income Tax Offset (LITO)

  • $700 if taxable income is $37,500 or under
  • Phases out at 5c per dollar from $37,500 to $45,000 (leaving $325 at $45,000)
  • Phases out at 1.5c per dollar from $45,000 to $66,667 (leaving $0)

Foreign residents and Working Holiday Makers

Foreign residents pay 30% from the first dollar up to $135,000, then 37% and 45%. No Medicare Levy, no tax-free threshold. Working Holiday Makers (visa 417/462) pay 15% on the first $45,000, then standard rates. Employers must be ATO-registered to apply WHM rates.

Common mistakes when calculating PAYG withholding

  • Claiming the tax-free threshold on two jobs causes a tax debt at year-end.
  • Forgetting HELP/STSL on the TFN Declaration leads to a large tax bill when you lodge.
  • Confusing PAYG withholding with final tax – PAYG is an estimate only.
  • Using old HELP/STSL percentage system – the marginal system from 2025-26 is materially different.

This calculator applies 2025-26 and 2026-27 ATO tax brackets, 2% Medicare Levy, the LITO phase-out, and the marginal HELP/STSL repayment system. For binding advice refer to the official ATO tax tables. Estimates only.

PAYG withholding FAQs

Plain-English answers covering ATO tax tables, Medicare Levy, HELP/STSL repayments, the tax-free threshold and how PAYG is calculated.

How is PAYG withholding calculated in Australia?

PAYG withholding is calculated by applying the progressive Australian tax brackets to an employee’s earnings, with adjustments for the tax-free threshold, Medicare Levy, LITO, and any HELP/STSL debt. Employers use ATO Statement of formulas (NAT 1004) to determine the amount each pay period.

What are the current ATO PAYG tax brackets for 2025-26?

For Australian residents in 2025-26: $0-$18,200 = 0%; $18,201-$45,000 = 16%; $45,001-$135,000 = 30%; $135,001-$190,000 = 37%; $190,001+ = 45%. The 2% Medicare Levy applies on top. From 1 July 2026, the second bracket drops from 16% to 15%.

What is the tax-free threshold and how does it affect PAYG?

The tax-free threshold is the first $18,200 of annual income on which no income tax is payable for Australian residents. Claim it on your TFN Declaration with one employer. Claiming on multiple jobs causes a tax debt at year-end.

How does HELP/STSL affect PAYG withholding?

If you have a HELP, HECS or STSL debt and your income exceeds $67,000 (2025-26) or $69,528 (2026-27), additional withholding is added. From 2025-26, repayments use a marginal system: 15% between threshold and $125,000, 17% up to $179,285, and flat 10% above $179,286.

Is PAYG withholding the same as income tax?

Not exactly. PAYG is the estimated income tax your employer deducts each pay. At year-end, you lodge a tax return and the ATO calculates actual tax. If too much was withheld you get a refund. If too little, you owe additional tax.

What is the Medicare Levy and how is it withheld?

The Medicare Levy is 2% of taxable income for most Australian residents, included in PAYG withholding. No levy applies below $27,222. Between $27,222 and $34,027 it phases in at 10c per dollar. Full 2% applies above $34,027.

How is PAYG calculated for fortnightly pay?

Annualise the gross earnings (gross x 26) and apply the same tax brackets as for annual income. Divide the annual tax by 26 to get the fortnightly PAYG amount. The annual total is the same regardless of pay frequency.

What rates apply to foreign residents and working holiday makers?

Foreign residents pay 30% from the first dollar up to $135,000, then 37% and 45%, with no Medicare Levy. Working Holiday Makers (visa 417/462) pay 15% on the first $45,000, then standard rates. Employers must be ATO-registered to apply WHM rates.

Does PAYG include the Low Income Tax Offset?

LITO of up to $700 is not separately applied in standard PAYG withholding – it is claimed when you lodge your tax return. ATO tax tables build in an approximation but the exact LITO is reconciled at year-end.

How do you calculate PAYG withholding for weekly pay?

Multiply weekly gross by 52 to annualise, apply income tax brackets, then divide annual tax by 52. Example: $1,500 weekly = $78,000 annual. Tax of approximately $14,188 / 52 = $272.85 weekly income tax, plus Medicare of approximately $30 per week.

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