Tax cut calculator

1. Salary and wage income for the purposes of this tool includes employment income such as: salary and wages; allowances, earnings, tips and director's fees; and employment termination payments. It does not include sole trader business income, personal services income or other forms of non-employment-related income.
2. Work-related expenses for the purposes of this tool include actual expenses expected to be incurred in relation to your employment that would be claimable as a ‘work-related deduction’ unless included in the list that follows. Work related expenses for the purposes of this tool do not include:
   • trade, business or professional association membership fees, or premiums for income, sickness or accident insurance policies (which can be claimed on top of the instant tax deduction)
   • business expenses and non-work-related deductions (for example, charitable donations, superannuation contributions, investment expenses and costs incurred in managing tax affairs).
3. Includes benefit from increases to the Medicare levy low‐income thresholds, including those announced in the 2026–27 Budget.
4. While this tool estimates the value of the Working Australians Tax Offset (WATO) for employees based on their wage and salary income, other forms of income are also eligible income for the purposes of the WATO – for example, personal services income and sole trader income (i.e. net business income or loss).
5. Instant tax deduction amounts are presented here as a residual amount after the benefit from the first three rounds of tax cuts and the WATO.

Notes

• The benefit of the WATO and the instant tax deduction will be received on assessment when eligible individuals lodge their tax return. The benefit from the Government's first three rounds of tax cuts can either be received on assessment, or incrementally each payday, depending on individual circumstances.
• Due to the $18,200 tax-free threshold and the low income tax offset (LITO), individuals will not pay income tax if they have taxable income up to $23,200 in 2027–28. Individuals who receive the WATO will not pay income tax for their taxable income from work up to $19,985 (or $24,985 for working Australians eligible for the LITO).

Disclaimer

• This tool provides a stylised representation of estimated annual tax cuts for the 2027–28 income year, relative to the 2023–24 tax settings, for employees with wage and salary income, based on the estimated taxable income, salary and wages and work-related expenses of an individual. Your actual tax outcome may differ based on your individual circumstances.
• The tax cuts presented in this tool are calculated based on the basic tax scales in 2027–28 for an Australian tax resident and, where applicable, the LITO, WATO, instant tax deduction and the Medicare levy low-income thresholds for a single non-pensioner who has no dependents.
• The WATO, the instant tax deduction, and the increases to the Medicare levy low-income thresholds for 2025–26 are subject to the passage of legislation.
• The tool is not intended to provide taxation or financial advice and should not be relied on as an accurate assessment of your individual tax affairs. Taxpayers should seek independent, expert advice on their taxation and financial affairs (as appropriate).