Bonus Tax Calculator Australia 2026-27

One of the most common tax misconceptions in Australia is that bonuses are taxed at a special, higher rate. In reality, the ATO does not distinguish between your regular salary and a bonus — they are both treated as ordinary income and taxed according to the same marginal tax brackets.

Why does my bonus seem to be taxed more?

When your employer processes a bonus payment, they use ATO withholding schedules that often result in higher tax being withheld upfront. This is because the withholding calculation assumes you earn that higher amount every pay period. The excess tax withheld is refunded to you when you lodge your tax return.

Marginal rate vs effective rate

Your bonus is taxed at your marginal rate — the rate that applies to the top portion of your income. For example, if your salary is $90,000 and you receive a $10,000 bonus, the bonus falls entirely within the 30% bracket (plus 2% Medicare levy), so you pay 32% tax on the bonus. Your effective tax rate across your total income is lower because the first $18,200 is tax-free and income up to $45,000 is taxed at 15%.

2026-27 tax brackets

• $0 - $18,200: 0% (tax-free threshold)
• $18,201 - $45,000: 15%
• $45,001 - $135,000: 30%
• $135,001 - $190,000: 37%
• $190,001+: 45%
• Plus 2% Medicare levy on all taxable income