Pay Rise Calculator
See how much of a pay rise you actually take home after tax.
Gross Increase
$10,000
Net Increase
$5,850
Per Fortnight
$225
Retention Rate
58.5%
Side-by-Side Comparison
| Current | New | Difference | |
|---|---|---|---|
| Gross Income | $85,000 | $95,000 | $10,000 |
| Income Tax | $16,288 | $19,288 | $3,000 |
| Medicare Levy | $1,700 | $1,900 | $200 |
| HELP Repayment | $0 | $0 | $0 |
| Net Pay | $67,012 | $72,862 | $5,850 |
| Effective Rate | 21.2% | 23.3% | 2.1% |
Understanding Your Pay Rise
Understanding Marginal Tax Rates and Pay Rises
When evaluating a pay rise, it's crucial to understand how Australia’s progressive tax system works. Your income is taxed in brackets, meaning only the portion of your salary above each threshold is taxed at the higher rate — but your entire income is subject to the top marginal rate once you cross a threshold. For example, if you're earning just below $90,000 and receive a raise pushing you into the 37% bracket (plus 2% Medicare Levy), the additional income is taxed at 39%, but your lower earnings still benefit from the 19% and 32.5% brackets. This can make it seem like a smaller net increase than expected. A pay rise calculator helps visualise this effect by comparing your current and projected tax liabilities, showing exactly how much extra you’ll actually receive each pay cycle.
How HECS-HELP Repayments Impact Your Net Pay Rise
If you have an outstanding HECS-HELP debt, your pay rise could trigger a jump in compulsory repayment percentages — and this affects more than just your annual tax return. From 2024–25, repayment rates start at 1% for incomes under $51,550 and increase incrementally up to 10% for incomes over $154,308. If your raise pushes you into a new repayment threshold, the higher rate applies to your total taxable income, not just the amount above the threshold. For instance, moving from $85,000 to $95,000 might increase your repayment rate from 4% to 5%, reducing your net take-home pay by an extra $950 annually — even before considering the additional tax. Our calculator includes an optional toggle to include HECS-HELP, helping you see the real-world impact on your budget and debt trajectory.
Superannuation and Salary Packaging Considerations
A pay rise often comes with increased superannuation contributions, since employers must pay the Super Guarantee (currently 11.5%) on your ordinary time earnings. That means a $10,000 raise could add $1,150 extra to your super fund annually — a significant long-term benefit. However, be mindful of the Concessional Contributions Cap ($30,000 for under-60s in 2024–25); exceeding it triggers additional tax. Some employers also offer salary packaging options, such as sacrificing part of your pre-tax salary to pay for things like childcare, car leases, or portable electronic devices — which can reduce your taxable income and increase your take-home pay if structured correctly. While these strategies require careful planning (and may affect HECS repayments), understanding how they interact with your pay rise helps you make smarter financial decisions.
Understanding Marginal Tax Rates and Pay Rises
In Australia’s progressive tax system, each additional dollar you earn is taxed at the rate for that income bracket — known as your marginal tax rate. This means a pay rise doesn’t increase your entire income at a single rate; only the portion falling within a higher bracket is taxed at the higher rate. For example, if your current salary is $85,000, the next $10,000 you earn falls partly in the 32.5% bracket (up to $90,000) and partly in the 37% bracket. When combined with the 2% Medicare Levy, your effective tax on the additional income may be around 34.5–39%, depending on the exact thresholds. Understanding this helps explain why a seemingly large pay rise might only increase your take-home pay by a modest amount — and why the retention rate (the percentage of the raise you actually keep) is often lower than people expect.
How HECS-HELP Repayments Change with a Pay Rise
If you have a HECS-HELP debt, your repayments are automatically deducted from your income once your repayment income exceeds the minimum threshold ($51,550 for 2024–25). Repayment rates start at 1% and increase incrementally up to 10% for incomes over $156,627. A pay rise that pushes you into a higher repayment tier can significantly reduce your net gain — especially if it crosses a threshold mid-year, which may trigger a retroactive top-up in repayments during the tax return process. For instance, moving from $85,000 to $92,000 increases your repayment rate from 4% to 4.5%, meaning an extra 0.5% of your entire income (not just the raise) is repaid. That’s why it’s crucial to factor in both tax and HECS changes when evaluating whether a pay rise is worth the effort.
Superannuation and Pay Rises: What You Need to Know
Employers are required to pay superannuation guarantee (SG) contributions at 11.5% of your ordinary time earnings (OTE), which typically includes your base salary but excludes overtime, bonuses, and some allowances. This means a pay rise usually results in a proportional increase in your super — unless the raise is structured as a one-off bonus or includes non-OTE components. For example, a $10,000 salary increase could boost your annual super by $1,150 (at 11.5%). However, keep in mind that salary-packaging arrangements (e.g., salary sacrifice to super) can alter this outcome. Also, remember that concessional contributions (including employer super) are capped at $30,000 for 2024–25 (or $33,000 if you’re 60+), so large raises may risk breaching the cap and incurring extra tax. When evaluating a pay rise, consider not just take-home pay, but also the long-term impact on your retirement savings.
Frequently Asked Questions
How much of a pay rise do I actually keep?
Due to Australia's progressive tax system, a pay rise is taxed at your marginal rate. For example, if you earn $90,000 and get a $10,000 raise, the extra income is taxed at 30% plus 2% Medicare Levy, so you keep about 68% of the raise.
Does a pay rise affect my HECS-HELP repayments?
Yes, higher income can increase your HECS-HELP repayment rate. Crossing a threshold can mean a jump in your repayment percentage on your entire repayment income.
Will my super increase with a pay rise?
Yes, employer super is calculated at 11.5% of your ordinary time earnings, so a pay rise automatically increases your super contributions.