Payslip
Decoder

What is PAYG withholding?

PAYG stands for "Pay As You Go". Instead of handing you your full pay and trusting you to save up a giant tax bill for June, your employer withholds a slice of every pay and sends it to the ATO on your behalf. Australia taxes income in brackets: for 2026–27, your first $18,200 is tax-free, then income is taxed at 15% up to $45,000, 30% up to $135,000, 37% up to $190,000, and 45% beyond that. Only the dollars inside each bracket are taxed at that bracket's rate, which is why a pay rise can never leave you with less take-home pay. If too much is withheld across the year, you get it back as a refund when you lodge your tax return.

What is the super guarantee?

The superannuation guarantee is money your employer must pay into a super fund for you, on top of your wages: 12% of your ordinary earnings since 1 July 2025. It's your money, invested until retirement. Two things worth checking on every payslip: that it's actually being paid (the payslip must show it), and which fund it's going to. If you've had several jobs, you may have several funds, and several sets of fees quietly eating the same balance. Consolidating is free through myGov, though it's worth checking insurance attached to old funds before closing them.

What is the Medicare levy?

The Medicare levy is a flat 2% of your taxable income that helps fund Australia's public health system: it's a big part of why a GP visit or an emergency department can cost you nothing. Low earners pay a reduced levy or none at all, and on a real payslip it's usually bundled into the tax withheld rather than shown as its own line. It is separate from the Medicare levy surcharge, which only applies to higher earners without private hospital cover.

How do HECS-HELP repayments work?

Since 1 July 2025, student loan repayments work like tax brackets: you repay nothing on repayment income below $69,528 (2026–27), then 15% of each dollar above that, and 17% on income above $129,717. Your employer withholds an estimate each payday if you've told them you have a debt. Three things people consistently get wrong: your repayment income can be higher than your taxable income (it adds back things like salary-sacrificed super and fringe benefits); your debt doesn't charge interest but it is indexed to inflation every 1 June, so the balance grows if you're not paying it down; and compulsory repayments through your pay are separate from voluntary repayments, which you can make at any time.

Why is my payslip different from this calculator?

This tool estimates your annual position and divides it per pay period. Employers withhold using the ATO's withholding schedules, which round differently and can't know your full-year picture: a second job, deductions, or a mid-year pay change all shift the final number. That's normal: everything squares up when you lodge your tax return. If your payslip is wildly different from the estimate, that's worth asking your payroll team about, and knowing what each line means is exactly how you ask a sharp question instead of nodding.

Figures current as at 9 August 2026 for the 2026–27 financial year. Sources: ATO: individual income tax rates, ATO: study loan thresholds, ATO: super guarantee. General information only, not financial advice.