Australian payroll runs on PAYG withholding, which means your employer estimates your annual tax from published withholding schedules and deducts an instalment each pay cycle, and everything about your take-home figure follows from how accurately that estimate reflects your circumstances. The schedules assume one employer, the tax-free threshold claimed once, and no other income, so the most common causes of a surprise bill are structural rather than mathematical. Superannuation sits outside all of this: the Superannuation Guarantee reached 12% of ordinary time earnings from 1 July 2025, and it is paid on top of your salary into a complying fund rather than deducted from it, so it never reduces take-home pay but is a real part of the package. Reporting has also changed shape. Single Touch Payroll Phase 2 requires employers to report disaggregated income types and amounts to the ATO every pay run, and the old end-of-year payment summary has been replaced by an income statement that appears in myGov. This calculator models withholding, super, and the levers that legitimately change either.

Key Regulatory Parameters & Frameworks (YA 2026)

Rule 01

PAYG Withholding and the TFN Declaration

Employers withhold using the ATO's published withholding schedules, adjusted by what you declare when you start: your tax file number, residency status, whether you claim the tax-free threshold, and whether you have a study loan. Since the move to online commencement forms most of this is submitted through ATO online services rather than on paper. Failing to provide a tax file number means withholding at the top marginal rate plus the Medicare levy, so the declaration is worth completing promptly.

Rule 02

Single Touch Payroll Phase 2 and Income Statements

Employers report salary, PAYG withheld, and super information to the ATO on or before each pay day, with Phase 2 requiring income to be broken into components such as gross, overtime, bonuses and commissions, paid leave, allowances, and salary sacrifice. Payment summaries no longer issue: your income statement is available in myGov and is marked tax ready once the employer finalises it, usually by 14 July, after which it pre-fills your return.

Rule 03

Superannuation Guarantee at 12% and the Contribution Base

Employers must pay 12% of ordinary time earnings into a complying fund from 1 July 2025, the endpoint of the legislated phase-in from 9.5%. Ordinary time earnings excludes most overtime. A maximum superannuation contribution base caps the quarterly earnings on which the guarantee is compulsory, so very high earners receive contributions on a capped amount. Payday superannuation reforms are legislated to align payment with salary rather than quarterly, so check the commencement date for the current year.

Rule 04

Salary Sacrifice and the Concessional Cap

Salary sacrificed into super is taxed at 15% inside the fund instead of at your marginal rate, and counts toward the concessional contributions cap of AUD 30,000 a year, which includes your employer's guarantee contributions. Unused cap amounts can be carried forward for up to five years where your total superannuation balance is below the qualifying threshold. Division 293 tax adds a further 15% on concessional contributions for individuals whose income plus contributions exceeds AUD 250,000, halving the benefit for high earners.

Rule 05

Reportable Fringe Benefits and Salary Packaging

Non-cash benefits provided by an employer are taxed to the employer under the fringe benefits tax regime, but where an employee's benefits exceed the reporting threshold the grossed-up value appears on their income statement as a reportable fringe benefits amount. That figure does not increase taxable income, yet it is counted in income tests for the Medicare levy surcharge, study loan repayments, and various offsets and family payments, which is why salary packaging can raise a liability elsewhere even while reducing the tax on salary.

Example Calculation: Sydney Analyst

Scenario Context: Australian tax resident earning AUD 100,000 of salary for the 2025-26 year, private hospital cover held all year, no study loan, and no salary sacrifice.

Calculation Stage	Computed Value
Annual gross salary	AUD 100,000
Tax on the first AUD 18,200	Nil
Tax on AUD 18,201 to AUD 45,000 at 16%	AUD 4,288
Tax on AUD 45,001 to AUD 100,000 at 30%	AUD 16,500
Income tax	AUD 20,788
Medicare levy at 2%	AUD 2,000
Total withheld across the year through PAYG	AUD 22,788
Superannuation Guarantee at 12% of ordinary time earnings	AUD 12,000, paid on top into a complying fund

Final Deducted Result:Net take-home of AUD 77,212 a year, around AUD 6,434 a month, with a further AUD 12,000 going into superannuation that never appears in your bank account. Total employer cost is AUD 112,000. Salary sacrificing AUD 10,000 into super would reduce taxable income to AUD 90,000, saving roughly AUD 3,200 of tax and levy while paying 15% contributions tax inside the fund, a net benefit of about AUD 1,700 provided the concessional cap is not breached.

Frequently Asked Questions (FAQ)

What is superannuation and why is it not on my payslip as a deduction?▼

Super is a compulsory employer contribution to a complying retirement fund, paid on top of your salary rather than withheld from it, so it never reduces take-home pay. The Superannuation Guarantee reached 12% of ordinary time earnings from 1 July 2025, the last step of the legislated phase-in. Contributions are taxed at a concessional 15% going in and are preserved until you meet a condition of release, generally reaching preservation age and retiring, which is why they are not accessible savings.

Can I choose my own super fund?▼

In most cases yes. Employees can nominate a complying fund using the standard choice form, and where no choice is made the employer must ask the ATO for your existing stapled fund rather than defaulting you into a new one, a rule introduced to stop workers accumulating duplicate accounts and duplicate insurance premiums. Some employees covered by particular enterprise agreements or defined benefit schemes have restricted choice, so check your agreement before assuming.

Is salary sacrificing into super worth it?▼

Usually, if you are above the 30% marginal rate and have room in the concessional cap. Sacrificed amounts are taxed at 15% inside the fund instead of your marginal rate, so the saving is the difference between the two. The AUD 30,000 concessional cap includes your employer's guarantee contributions, and exceeding it means the excess is taxed at your marginal rate with an interest charge. Division 293 tax adds another 15% once income plus contributions exceeds AUD 250,000, which halves the benefit for high earners.

What is a reportable fringe benefits amount on my income statement?▼

It is the grossed-up value of non-cash benefits your employer provided, shown once they exceed the reporting threshold. It does not form part of taxable income and you pay no income tax on it directly, because fringe benefits tax is levied on the employer. However it is included in the income tests for the Medicare levy surcharge, compulsory study loan repayments, family assistance, and several offsets, so a packaged car or salary-packaged living expenses can raise liabilities that have nothing to do with the benefit itself.