Worked example (2025–26)
Australian resident, $72,000 of salary with $15,200 of tax withheld, $250 of interest, 520 hours worked from home, $600 of other work expenses, $220 tax agent fee, no private hospital cover. The calculator above opens with these figures; change them to see your own estimate, laid out like a notice of assessment.
| Item | Assessment | Amount |
|---|---|---|
| 1 | Salary and wages | $72,000.00 |
| 10 | Interest | $250.00 |
| Total income | $72,250.00 | |
| D5 | Other work-related expenses | −$964.00 |
| D10 | Cost of managing tax affairs | −$220.00 |
| Taxable income | $71,066.00 | |
| Resident rate 16% on $26,800 | $4,288.00 | |
| Resident rate 30% on $26,066 | $7,819.80 | |
| Tax on taxable income | $12,107.80 | |
| M1 | Medicare levy | $1,421.32 |
| Tax and repayments | $13,529.12 | |
| PAYG tax withheld | −$15,200.00 | |
| Your refund | $1,670.88 |
Typical returns (2025–26)
| Situation | Taxable income | Income tax after offsets | Medicare levy and surcharge | Result |
|---|---|---|---|---|
| Employee, $55,000, $300 deductions | $54,700 | $7,018.50 | $1,094.00 | $787.50 refund |
| Employee, $85,000, works from home 600 hours | $84,330 | $16,087.00 | $1,686.60 | $1,126.40 refund |
| Employee, $120,000, no private cover | $120,000 | $26,788.00 | $3,900.00 | $812.00 refund |
| Graduate, $75,000, HELP debt | $75,000 | $13,288.00 | $1,500.00 | $388.00 to pay |
| Investor, $95,000 + rental loss of $8,000 | $87,000 | $16,888.00 | $1,740.00 | $3,372.00 refund |
| Retiree, $14,000 franked dividends | $20,000 | $0.00 | $0.00 | $6,000.00 refund |
Withholding amounts are illustrative; use the figure on your income statement.
How your tax return is worked out
- Add up your income. Salary, wages and allowances from your income statement, government pensions, interest, dividends plus franking credits, net rent (a loss reduces your income) and your net capital gain.
- Take off deductions. Work-related car (88c a km up to 5,000 km), travel, clothing, self-education and other work expenses, working from home, gifts, tax agent fees and personal super contributions. Cents are dropped from taxable income.
- Work out tax on taxable income at resident rates (tax-free to $18,200), foreign resident rates (no tax-free threshold) or working holiday maker rates.
- Take off non-refundable offsets: the low income tax offset (up to $700) and the seniors and pensioners tax offset. They can reduce your income tax to nil but not below.
- Add the Medicare levy (2%, reduced on low incomes and for families), the Medicare levy surcharge if you had no private hospital cover and earn over the threshold, and any compulsory study loan repayment.
- Take off what you have already paid: PAYG tax withheld and your franking credits. A negative result is your refund; excess franking credits are refunded too.
Rates and thresholds
| Item | 2025–26 | 2026–27 |
|---|---|---|
| Resident rates (taxable income tops) | 0% to $18,200 / 16% to $45,000 / 30% to $135,000 / 37% to $190,000 / 45% above | 0% to $18,200 / 15% to $45,000 / 30% to $135,000 / 37% to $190,000 / 45% above |
| Low income tax offset | $700 up to $37,500, nil from $66,667 | $700 up to $37,500, nil from $66,667 |
| Medicare levy | 2%; none to $28,011 single, $47,238 family | 2%; none to $28,011 single, $47,238 family (provisional) |
| Medicare levy surcharge starts (single / family) | $101,001 / $202,001 | $105,001 / $210,001 |
| Seniors and pensioners tax offset (single) | $2,230, reduced from $34,919 | $2,230, reduced from $36,034 |
| Study loan repayments start | $67,001 | $69,529 |
| Capital gains discount (assets held 12 months+) | 50% | 50% |
| Car cents per km (max 5,000 km) | 88c | 91c |
| Work-from-home fixed rate | 70c an hour | 70c an hour (assumed) |
| Standard deduction for work expenses | — | $1,000 |
| Lodge by (self-lodgers) | 31 Oct 2026 | 31 Oct 2027 |
Official source: Tax rates for Australian residents (ATO), Low income tax offset (ATO), Medicare levy reduction (ATO), Medicare levy surcharge thresholds (ATO), Study and training support loans thresholds (ATO), Seniors and pensioners tax offset (ATO), Working from home fixed rate (ATO), Standard deduction for work expenses (ATO), Individual tax return instructions 2026 (ATO). Rates checked on Oct 29, 2026.
Questions people ask
Why do I get a refund?
Employers withhold tax as if your pay were your only income and you claimed no deductions. Deductions, offsets such as the low income tax offset, and franking credits mean you often paid too much.
When will I get my refund?
The ATO says most electronically lodged returns are processed within two weeks. Paper returns take up to 50 business days.
Why do I owe tax?
Common reasons are a second job taxed at the no-tax-free-threshold rate, investment or rental income with no tax withheld, a HELP debt or the Medicare levy surcharge.
Is this the same as the ATO’s calculation?
It follows the same steps as your notice of assessment for the items listed. It does not cover business income, partnerships and trusts, foreign income, employment termination payments, lump sums in arrears, tax losses carried forward, the private health insurance rebate, zone and other offsets, or part-year residency.
Which income year should I choose?
2025–26 is 1 July 2025 to 30 June 2026; the return is due by 31 October 2026 if you lodge yourself. 2026–27 runs to 30 June 2027 and introduces the $1,000 standard deduction for work expenses.
Reviewed by Soufyane S.. Last updated Oct 29, 2026. How we check numbers
Estimates for information only, not tax, legal or financial advice. Check with an adviser or the official tax authority.