Take-Home Pay: Where Your Salary Actually Goes
Where your salary goes between gross and net: income tax, the 2% Medicare levy, HECS repayments — and why super isn't taken from your pay.
You negotiated $85,000, but your bank account shows less. That's the gap between gross pay (the number in your contract) and net pay (the number you can actually spend).
Here's who takes which slice, and why.
The biggest slice goes to Canberra
Australia taxes income in brackets — slices of your salary that each get their own rate. For FY2025-26: the first $18,200 is tax-free, then 16% up to $45,000, 30% up to $135,000, 37% up to $190,000, and 45% above that.
Your employer holds back an estimate from every pay, sparing you a horror bill at tax time. On $85,000, income tax comes to about $16,288 for the year — the single biggest bite.
Two cents in every dollar for the hospital
On top of income tax sits the Medicare levy: 2% of your income for most workers, which helps pay for the public health system. On $85,000, that's another $1,700 a year.
Low-income earners pay a smaller levy or none at all. Higher earners without private hospital cover can also cop the Medicare levy surcharge — the government's nudge towards private cover.
The optional extras (one less optional than the other)
If you have a HECS debt, repayments start once your income passes $54,435 — between 1% and 10% of income depending on what you earn, held back from your pay rather than billed separately.
Salary sacrifice also shrinks your take-home, but by choice: you trade some salary for extra super or perks before tax touches it, lowering the income you're taxed on.
- Income tax: held back from every single pay
- Medicare levy: 2% for most workers
- HECS-HELP: only once you earn over $54,435
- Salary sacrifice: optional, and cuts the income you're taxed on
The money you can't touch yet
Superannuation — super, your retirement savings — is not carved out of your salary. The 12% super guarantee (the minimum your employer must pay by law) goes in on top of your wage, straight into your fund. Your $85,000 job actually costs them $95,200.
One warning: if a job ad says the package 'includes super', the actual salary is smaller than the headline. Always ask which way the number is quoted.
🧐Reality check
A '$95,000 package including super' and a '$95,000 salary plus super' differ by about $10,000 a year in cash. Same headline, very different payslip.
The number that actually matters
So where does $85,000 land? With no HECS: about $16,288 income tax plus $1,700 Medicare levy leaves roughly $67,000 a year — around $2,577 a fortnight. Carrying a HECS debt, knock off a few thousand more.
The lesson: think in net, not gross. A raise is only as good as what lands in your account.
💡Quick win
Comparing job offers? Convert every number to fortnightly take-home before deciding. Gross salaries are for bragging; net pay buys groceries.
FAQ
Is super taken out of my salary?
No. The 12% super guarantee is paid by your employer on top of your salary. The main exception is a package advertised as 'including super' — then the cash salary is the package minus the super.
Why is my take-home pay less than I calculated?
The usual suspects: the 2% Medicare levy, HECS-HELP money held back once you earn over $54,435, salary sacrifice, or a package that quietly included super in the headline number.
How can I increase my take-home pay?
Beyond earning more: claim every deduction you're allowed at tax time, check your employer isn't holding back too much, and weigh up salary sacrifice — less cash in hand now, but less income to be taxed on.
Run your own numbers
Sources: figures checked against ATO published rates and thresholds for FY2025-26 at the review date. See how we check our numbers.
⚠️ General information only — not tax or financial advice. Figures relate to FY2025-26 unless stated otherwise.