Pay calculator explained

USE CASE:

The pay calculator tool allows users to check how much taxes apply to their income. It will help you calculate accurately your take-home pay/wages, superannuation, medicare, superannuation tax., withholding tax payment, and estimated tax by utilizing rates provided by ATO.

Primarily you just need to input the gross salary amount; the rest would be done for you. Businesses and employers can use our pay calculator to forecast their payroll and PAYG instalments.

We have tried to make this tool super easy to use. In this guide, we provide details of all the features and how they can be used.

Step 1: Inputs for pay calculator

Primarily there are two types of inputs required from the user.
1- Variables related to Income (Pink Arrow)
2- Variables related to Individual tax residency status (Yellow Arrow)

1 – Income – Variables related to Income (Pink Arrow)
In this section, you need to provide details of your income. Firstly, add your salary. Then, select the frequency of your salary. Select the tax year for which you need to find the taxable income summary. And lastly, input the Superannuation percentage.

For example, in the snippet above $50,000, the gross salary would be paid annually. The tax year is 2022-23. And superannuation rate is fixed at 10.5% for any inquiries related to 2022 onwards.

  • Your Salary: You can input any value be it your total annual, monthly or weekly salary
  • Pay Frequency: Use this only if you know your pay frequency and want to see it reflected for other periods. For example, you may change it to weekly and input your weekly salary above to get insight into your fortnightly, monthly or annual results. The default setting is Annual.
  • Tax year: We can provide you with results dated back to the 2017-18 tax year. As default, this would be set to the current financial year.
  • Superannuation: Set as default to 10.5%; please change to 10% for years before 2022.

2 – Options – Variables related to individual tax residency status (Yellow Arrow)

This section provides a few standard choices that might directly affect your income and taxes. Please select all options that are appropriate to your situation.

  • Includes Superannuation: Please check this box if your salary package is inclusive of superannuation. You can refer to your employment contract to see if your salary is inclusive/exclusive of super.
  • Non-resident: Please check this option only if you know you are a non-resident for tax purposes. As different tax rates apply to residents and non-residents, it is highly advised to leave it unchecked if you are an Australian citizen. If you are not sure, you can read this post to check eligibility for a tax resident in Australia.
  • Working Holiday Visa: Please check this option only if you are on a temporary visa in Australia. The list of visas includes Subclass 417 Working Holiday visa and Subclass 462 Work and Holiday (backpackers).
  • No tax-free threshold: Check this only if you have opted for no tax-free threshold to be applied to your salary at the start of your employment. This is usually applicable if you have more than one source of income.

Step 2: Taxable Income Summary by Pay Calculator

So this is where the magic happens.
After you have provided us with all the relevant information our calculator gets to work and crunches numbers for you. Within the blink of an eye, it populates results that are easy to understand.

Easy as it is to use our pay calculator.

Orange Arrows: You can see in the image below we have broken down results into periods(rows) and different tax variables (columns).

Green Arrow: You can click on the down-facing arrows to see the further breakdown of individual tax variables.

Taxable Income summary explained

Now let’s dive into what each individual variable represents.

Taxable income summary pay calculator Australia
  • A: Take Home Pay – This is the final payment amount that hits your bank account. If you had a recent pay rise and wanted to know how much your weekly/fortnightly pay would change. This is the amount you should be looking at.
  • B: Gross Pay – This is the gross amount your employer pays you, including your taxes. The annual sum of this amount (column 5) should always equal your total before-tax annual income.
  • C: Taxable Super Contributions – The gross superannuation amount is calculated at the percentage specified in the Input section. Usually, it would be set as 10.5% from 1 July 2022 onwards. For years before 2022, please change the value to 10%.
  • D: Tax on contributions: You must pay this tax on your super contributions. Capped at 15% on all concessional contributions.
  • E: Income Tax – Total income tax amount that would be taken off your gross pay. It is also known as pay-as-you-go (PAYG) tax or withholding tax. Values for this variable are derived from ATO tax tables.
  • F: Medicare – Total Medicare levy you would be required to pay, usually capped at 2% for annual income < $90,000.
  • G: LITO Low-income tax offset; this only applies if your annual gross income is less than $66,667.
  • H: Estimated Tax Return – This is the estimated tax return that can be expected at the time of return lodgement. Please note this value is for illustrative purposes only. As it only considers $300 of allowable deductions from your total income. Your overall return value is subjected to expenses and other deductions claimed at the time of lodgment.

You can use this HECS calculator to calculate your Tax, Pay, Medicare Levy and many more

Feedback

Please leave any questions or comments you have about the tool. Let us know how you use this pay calculator. We appreciate your feedback and strive to improve our tools.

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