Estimate your tax refund or bill.
Estimated refund
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Actual tax + Medicare
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Taxable income
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A refund is just your own money coming back
Every July, millions of Australians lodge a return hoping for a refund, and most get one. It feels like a windfall, but it is not. A refund happens when your employer withheld more PAYG tax across the year than your actual liability turned out to be. The ATO simply returns the overpayment. This calculator reconciles the two numbers for you before you lodge: it works out your real tax plus Medicare levy on your taxable income, then subtracts the PAYG already withheld. A positive gap is a refund, a negative gap is a bill. Knowing the figure early lets you plan, whether that means budgeting for a top-up payment or deciding what to do with money coming back.
How deductions move the needle
Deductions do not come straight off your tax. They come off your assessable income first, and only then is tax recalculated on the lower figure. So a deduction is worth your marginal rate, not a dollar for dollar refund. For someone in the 30 percent bracket, a $1,000 work-related deduction reduces tax by about $300, plus a little Medicare levy. That is still worth claiming, but it explains why a big spend late in June rarely pays for itself through the tax saving alone. The tool applies the 2025-26 resident scale, with the first $18,200 tax free, then 16 percent, 30 percent, 37 percent and 45 percent across the bands, and adds the 2 percent Medicare levy once taxable income clears the low-income phase-in.
Working through a $90,000 salary
Take the default inputs: $90,000 gross income, $21,000 of PAYG tax withheld, and $3,000 of deductions. Taxable income drops to $87,000. The progressive scale produces $16,888 of income tax, the 2 percent Medicare levy adds $1,740, and the total liability is $18,628. Against $21,000 already withheld, that is a refund.
| Step | Amount |
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The chart splits the $21,000 your employer sent to the ATO into the part that was genuinely owed and the part that comes back to you.
The two things that can flip a refund into a bill
This estimate covers income tax and the Medicare levy, which is what trips most people up, because two other charges are not in the calculation. The first is a compulsory HELP or HECS repayment. If you carry a study loan and your income is above roughly $54,000, the ATO claws back a percentage of your income at assessment time, and that can swallow a modest refund whole. The second is the Medicare levy surcharge, which applies if your income is above $97,000 as a single and you held no private hospital cover for part of the year. Either of these can turn a screen showing a refund into an actual amount owing, so treat this tool as a strong estimate of the core tax position rather than the final assessment.
Who gets the most out of this
It is built for PAYG employees who want a fast read on their position before lodging, and for anyone deciding whether to bring forward deductible spending before 30 June. A practical tip from years of doing this: keep a running tally in the ATO myDeductions tool through the year, because the deductions people forget, home office hours, professional subscriptions, income protection premiums paid outside super, are exactly the ones that lift a borderline result into a refund. If you have investment income, capital gains, or rental losses, your actual return is more involved, and a registered tax agent fee is itself deductible the following year.
Common questions
When will the ATO pay my refund?
Most electronically lodged returns are processed within about two weeks, and the refund lands in the bank account you nominate. Returns lodged on paper take considerably longer. If the ATO needs to verify something, or you have an outstanding debt with another government agency, processing can pause while that is sorted out.
Why did my refund shrink compared with last year?
Common causes are a pay rise that pushed more income into a higher band, the end of an offset you previously qualified for, fewer deductions claimed, or interest and dividend income that was not taxed at source. A second job is another frequent culprit, because the tax-free threshold is usually only applied to your main job, and the second employer may under-withhold.
Do I have to lodge if too little was withheld?
Yes. If your assessed tax exceeds what was withheld, you owe the difference, and lodging is how the ATO calculates it. Ignoring it does not make it disappear, and a general interest charge accrues on unpaid amounts. The upside of running this estimate early is that you can set the money aside well before the bill arrives.