Pay Rise Calculator Australia 2025–26

Will a pay rise actually increase my take-home pay?

Yes — always. This is one of the most persistent myths in Australian personal finance. Under Australia’s progressive marginal tax system, a pay rise cannot leave you worse off. Only the income in the new bracket is taxed at the higher rate, not your entire salary.

Why does my payslip sometimes show less after a pay rise?

There are a few legitimate reasons your take-home pay might not increase as much as expected:

• HECS threshold crossed: If your new salary pushes you over $67,000, HECS repayments begin. This can reduce your net pay even as your gross increases.
• Medicare Levy Surcharge: If your income crosses $101,000 without private hospital cover, you start paying 1% MLS on your entire income.
• Salary packaging cap reached: NFP workers near their salary packaging cap ($15,900 or $9,010) see the benefit shrink.
• Payroll tax timing: Some payroll systems annualise incorrectly mid-year, causing temporary over-withholding.

How much of a pay rise do you actually keep?

The amount you keep depends on which tax bracket your pay rise falls into. As a simple guide for 2025–26:

• Pay rise in the 19% bracket ($18,200–$45,000): you keep roughly 79–81 cents per dollar (after Medicare)
• Pay rise in the 32.5% bracket ($45,000–$120,000): you keep roughly 65–66 cents per dollar
• Pay rise in the 37% bracket ($120,000–$180,000): you keep roughly 61 cents per dollar
• Pay rise in the 45% bracket ($180,000+): you keep roughly 53 cents per dollar

Should you negotiate a pay rise or salary sacrifice?

A pay rise increases your gross income and your super entitlement, while salary sacrifice into super gives you tax savings but locks money away until retirement. For most people under 50 with a mortgage or other financial goals, a pay rise is usually better — unless you’re within 10 years of retirement or have maxed out other deductions.