What does your household take home?
Put both salaries in and see the couple's real position — combined take-home pay, tax and levies, who carries more of it, and why two incomes are taxed less than one.
Your household takes home
$120,960
per year ($120,960/year) between you — a household effective tax rate of 19%.
$120,960
$29,040
$0
$150,000
$120,960
$26,040
$3,000
Resident rates, 2026-27, incl. the 2% Medicare levy. The Medicare levy surcharge uses the combined family threshold (2026-27); you hold private hospital cover. Open the breakdown for the per-partner detail. A guide, not tax advice.
Australia taxes individuals, not households. There is no joint return and no household tax rate, so the only way to see what a couple actually lives on is to run each person's pay through the rules separately, then add the results.
That view answers the decisions couples actually make: whether a second income is worth the childcare, what a promotion is worth once it lands in a higher bracket, and how lopsided the tax bill is between you.
How this is calculated
- 1
Each partner is calculated on their own
Salary sacrifice comes off first; the remainder is that partner's taxable income. The resident brackets for the current financial year are applied slice by slice, so the first $18,200 is untaxed and each later slice is taxed at its own rate, not the whole salary at the top rate.
- 2
The Medicare levy is added on the same taxable income
A 2% levy applies once taxable income clears the low-income threshold, phasing in between the lower and upper thresholds rather than switching on all at once. It is worked out per partner, so a lower earner may pay a reduced levy or none.
- 3
Surcharge and HECS are assessed on the full salary
Both are tested on gross salary with sacrifice added back, because each assesses income that includes reportable super contributions. The surcharge uses the family threshold — twice the single figure, plus $1,500 per dependent child after the first — and is nil if you hold hospital cover.
- 4
The two sets of numbers are summed
Gross, income tax, Medicare levy, surcharge, HECS, sacrificed super and take-home are added across both partners. The household effective rate is total tax, levies and study-loan repayments over combined gross.
- 5
One earner versus two is compared directly
The advanced section re-runs income tax plus the Medicare levy on the whole household income as if one person had earned it, and shows the gap — the bracket-splitting effect on its own.
What it assumes
- Each salary is treated as that person's entire taxable income. Investment income, deductions, tax offsets and the private health insurance rebate are not modelled.
- The super figure is only what you sacrifice. Your employer's Super Guarantee is paid on top of salary and is left out of the take-home numbers.
- The Medicare levy uses the single low-income thresholds for each partner. The ATO also has a family-based levy reduction, so a couple with one low income may pay slightly less.
- The surcharge applies one shared answer on hospital cover and measures each partner's income against the family threshold. If you sit near a tier boundary, check your position with the ATO.
- Dependent children only widen the surcharge threshold here — Family Tax Benefit, Parental Leave Pay and the Child Care Subsidy are income-tested separately.
Common questions
Can we split our income between us to pay less tax?
Not by choice. Income is taxed to the person who earned it, so salary cannot be reallocated to a lower-earning partner. The comparison on this page is illustrative: it shows what a household already gains when both people genuinely earn.
Why does the higher earner pay so much more of the tax than the pay gap suggests?
Because the brackets are progressive, the top slices of a bigger salary are taxed at higher rates than the first slices, so someone earning twice as much pays well over twice the tax.
Do we each get the tax-free threshold?
Yes — every resident individual gets their own, which is why two incomes are taxed more lightly than one. But it is per person: if you hold two jobs, claim the threshold from one payer only, or you will face a bill at tax time.
Does only one of us need private hospital cover to avoid the surcharge?
No. For a family the exemption depends on everyone in the household, dependants included, holding appropriate private patient hospital cover for the full year — which is why cover is a single shared setting here.
Does salary sacrifice cut the household's tax bill?
It reduces the taxable income used for income tax and the Medicare levy, so those fall. It does not reduce the surcharge or a compulsory HECS/HELP repayment, because both add reportable employer super contributions back.
Sources: ATO — tax rates for Australian residents · ATO — Medicare levy · ATO — Medicare levy surcharge thresholds and rates · ATO — study and training loan repayment thresholds · All data sources
See also: Take-home pay · Where do you rank? · HECS / HELP · Family payments
General information only, not financial advice. Figures are estimates based on the inputs and assumptions above and don't account for your personal circumstances. Confirm anything important with the relevant authority or a licensed adviser.