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.

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Q: 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%.

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: 5 May 2026

How much of my pay rise do I actually keep after tax?

In Australia, you keep 1 minus your marginal tax rate (including 2% Medicare) of each extra dollar. In the 30% bracket (salary $45k-$135k), you keep 68% of every extra dollar. In the 37% bracket ($135k-$190k), 61%. In the 45% bracket ($190k+), 53%. HECS debt clips another 1-10% off the whole salary once the raise crosses a repayment tier. The progressive system means you always take home more — no raise ever leaves you worse off. Source: Australian Taxation Office.

Worked examples. $90,000 → $99,000 (10% raise): extra $9,000 taxed at 32% marginal (30% + 2% Medicare) → keep $6,120 (~6.8% more take-home). $150,000 → $157,500 (5% raise): extra $7,500 taxed at 39% marginal → keep $4,575 (~4.1% more take-home). $200,000 → $210,000 (5% raise): extra $10,000 taxed at 47% marginal → keep $5,300 (~3.8% more take-home).

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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