Take a base salary of $90,000 on a standard 38-hour week. That is 1,976 paid hours a year (38 times 52), so the gross hourly rate is $90,000 divided by 1,976, which is about $45.55 an hour. To find the after-tax rate, first remove tax. PAYG income tax on $90,000 in 2026-27 is $17,788 across the Stage 3 bands, and the 2 percent Medicare Levy adds $1,800 because this income sits above the upper threshold. Net pay is therefore $70,412, which over the same 1,976 hours works out to roughly $35.63 an hour. The gap between $45.55 and $35.63 is exactly what PAYG and Medicare take out of each hour you work.
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How it is calculated
The converter turns a yearly salary into an hourly figure in two ways. The gross rate divides the annual salary by your paid hours per year, which is the hours per week multiplied by 52. Change the hours field and the rate moves immediately, since a 38-hour week and a 40-hour week spread the same salary over different totals. The net rate first deducts PAYG income tax, calculated across the progressive Stage 3 bands where each slice of income is taxed only at its own rate, then deducts the 2 percent Medicare Levy on income above the lower threshold. That after-tax salary is divided by the same paid hours to give the net hourly rate. Super is not included, because the 12 percent Super Guarantee is paid by your employer on top of base salary rather than out of it.
Frequently asked questions
Include Super?
Salary figures here are base salary (Super is paid on top at 12%). To compare a "package including Super" role, divide the package by 1.12 first.
Which tax year do the calculations use?
Rates reflect the 2025/2026 financial year under the Stage 3 tax cuts. The tax-free threshold is $18,200, with the top marginal rate of 45% applying above $190,000. The ATO updates these brackets annually, so results may differ slightly in future years.
Does the calculator include the Low Income Tax Offset (LITO)?
The calculator applies the progressive income tax brackets but does not separately itemise the Low Income Tax Offset. LITO reduces the tax payable for incomes below $66,667 by up to $700. For a precise tax figure inclusive of offsets, use myTax or the ATO tax withheld calculator.
How does the Medicare Levy affect my hourly rate?
The Medicare Levy is 2% of taxable income for most employees and is collected through PAYG withholding. A reduced levy applies below $26,000 and phases in fully by around $32,500. The calculator deducts the full 2% above the lower threshold, which slightly understates net pay for low earners in the phase-in range.