How much of my pay rise do I actually keep?

Due to Australia's progressive tax system, the percentage you keep depends on which marginal tax bracket your raise falls into. For example, if you earn $90,000 and get a 10% raise to $99,000, the extra $9,000 is taxed at 30% (plus 2% Medicare levy), so you keep about $6,120 of the $9,000 increase — a real increase of roughly 6.8% in take-home pay, not 10%.

Does a pay rise push all my income into a higher tax bracket?

No. Australia uses a marginal tax system, meaning only the portion of income within each bracket is taxed at that rate. If your raise pushes you from the 30% bracket into the 37% bracket, only the income above $135,000 is taxed at 37%. Your existing income stays at the same rates. You always take home more money with a pay rise.

Will a pay rise increase my HECS repayments?

Possibly. HECS-HELP repayments are based on your repayment income and increase in tiers. A pay rise could push you into a higher repayment tier, increasing your compulsory repayment percentage. For example, moving from $84,107 to $89,154 increases your HECS rate from 4% to 4.5% — applied to your entire income, not just the increase.

What are the 2025-26 Australian tax brackets?

For 2025-26: $0–$18,200 is tax-free, $18,201–$45,000 is taxed at 16%, $45,001–$135,000 at 30%, $135,001–$190,000 at 37%, and $190,001+ at 45%. Plus the 2% Medicare levy on all taxable income.

Pay Rise Calculator

Enter your current salary and pay rise percentage to see how much you actually keep after tax. A 10% pay rise doesn't mean 10% more take-home pay due to marginal tax brackets, Medicare levy, and HECS repayments.

Last verified: 1 July 2025

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Pay Rise Calculator

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