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Work Out Your Take-Home Pay or Employee Tax

PAYG Calculator Australia

Whether you are checking your own net pay or figuring out how much income tax to withhold from an employee's wages, this free PAYG calculator gives you a quick estimate. Enter a gross pay or net pay amount, choose whether you are paid weekly, fortnightly, or monthly, and the calculator works out the rest using current ATO tax rates for the 2025-26 financial year.

The calculator assumes you are an Australian resident for tax purposes and have claimed the tax-free threshold. If you hold a second job or are a non-resident, you may need to adjust. For help with your BAS, try our BAS calculator or read our guide on how to do a BAS statement and lodge it.

What Is Pay As You Go Withholding?

PAYG stands for Pay As You Go. It is the system the ATO uses to collect income tax throughout the year, so you are not left with one large tax payable amount when you lodge your tax return. As an employer, you deduct tax from each employee’s gross pay and send the amount of tax withheld to the ATO. This applies to full-time, part-time, and casual workers, as well as company directors and other workers under voluntary agreements.

If you are a sole trader or contractor, you probably do not pay yourself a formal wage. PAYG instalments are how you pre-pay tax on your business income instead. The ATO calculates your instalment amount or instalment rate based on your latest tax return, and you pay quarterly through your BAS. Withhold too little, and your employees cop a tax bill at EOFY. Underestimate your own instalments, and you will be the one with a surprise.

Income Tax Rates and Tax-Free Threshold for 2025-26

The PAYG withholding tables are based on these income tax brackets for Australian residents in the current financial year:

  • $0 to $18,200: No tax (tax-free threshold)
  • $18,201 to $45,000: 16c per $1 over $18,200
  • $45,001 to $135,000: 30c per $1 over $45,000
  • $135,001 to $190,000: 37c per $1 over $135,000
  • $190,001 and above: 45c per $1 over $190,000

The 2% Medicare levy is added on top, but the ATO’s withholding tables already include it along with tax offsets like the Low Income Tax Offset (LITO), so employers do not need to calculate these separately. If an employee has a HELP debt or other study loan, additional levies apply once their income passes $67,000. Working holiday makers (visa subclasses 417 and 462) and non-resident workers have separate tax rates and are not eligible for the tax-free threshold.

How This PayG Calculator Works: Gross Pay to Net Pay

The tool works in two directions. Enter a gross pay amount to see how much tax is withheld and what the home pay (take-home) figure will be. Or enter the net pay you want someone to receive, and it works backwards to find the gross amount needed.

Keep in mind that the calculator’s accurate estimate depends on the information you provide. For formal payroll where total deductions include superannuation, expenses, and salary sacrifice, always use ATO-compliant software like Xero, MYOB, or QuickBooks. If you have a second job and have claimed the tax-free threshold from your main employer, your second employer should withhold at the higher “no threshold” tax rate to avoid a shortfall on your tax return.

PAYG and Your BAS

If you have employees, the amount of tax withheld gets reported on your BAS at labels W1 (total payments made) and W2 (total amount withheld). If you are a sole trader on PAYG instalments, those appear at T7, T2 and T8. Most small businesses lodge quarterly. Set the money aside so it is ready when your BAS is due, because that payment belongs to the ATO, not your business. For a full rundown of deadlines, check our guide on BAS due dates.

Need a Hand With PAYG and Payroll?

Calculators give you a quick estimate, but keeping PAYG, BAS, and payroll running smoothly every quarter takes time, time most small business owners and tradies would rather spend on the tools, not the books. At Shoebox Books & Tax, our registered BAS agents look after your payroll, PAYG withholding, STP reporting, and BAS lodgement. We work with Xero, MYOB, and QuickBooks, and our fixed-price packages mean no surprises.

Book a free consultation and let us take the numbers off your plate.

Call us on 1300 65 35 83

Frequently Asked Questions

What is the difference between PAYG withholding and PAYG instalments?

PAYG withholding is the tax you deduct from employee wages and send to the ATO. PAYG instalments are pre-payments you make towards your own business or investment income tax, calculated as an instalment amount or rate by the ATO. If you employ people, you deal with withholding. If you are a sole trader, instalments apply to you. Both get reported on your BAS.

I have a second job. How is PAYG calculated?

You can only claim the tax-free threshold from one employer. Your second employer should withhold at the higher “no threshold” rate. At the end of the financial year, the ATO combines your total income from both jobs on your tax return and calculates the final tax payable. If too much was withheld overall, you get a refund.

Does this calculator work for non-residents or working holiday makers?

This calculator is designed for Australian residents for tax purposes. Non-resident workers and working holiday makers are subject to different withholding rates and are not entitled to the tax-free threshold. The ATO publishes separate tax tables for these situations.

How accurate is this PAYG calculator?

It gives a solid estimate using the 2025-26 ATO tax brackets, Medicare levy, and offsets. Actual withholding can differ slightly due to rounding in official ATO tax tables. For payroll, always use ATO-compliant software or the officially published tables.

Can Shoebox Books & Tax help with my PAYG and payroll?

Yes. Our registered BAS agents handle payroll, PAYG withholding, STP reporting, and BAS lodgement for small businesses across Australia. Fixed-price packages mean you always know what you are paying each month. Get in touch for a free consultation.