How is a bonus taxed in Australia?

In Australia, bonuses are not taxed at a special flat rate. They are added to your assessable income for the financial year and taxed at your marginal tax rate. This means the tax on your bonus depends on your total income — the higher your salary, the higher the rate applied to the bonus.

Why does my bonus seem to be taxed so heavily?

Your employer is required to withhold tax on bonuses at your marginal rate (or higher) to avoid you having a large tax bill at the end of the year. This can make it feel like the bonus is taxed more heavily, but at tax time the ATO calculates your actual liability on total income — and you may receive a refund if too much was withheld.

Does a bonus affect my HECS-HELP repayment?

Yes. HECS-HELP repayments are based on your total repayment income, which includes bonuses. A bonus can push you into a higher HECS repayment bracket, increasing the percentage applied to your entire income — not just the bonus amount. This can result in a significantly larger compulsory repayment.

Is Medicare levy charged on bonuses?

Yes. The 2% Medicare levy is calculated on your total taxable income, which includes bonuses and lump sum payments. So the Medicare levy on the bonus portion is effectively 2% of the bonus amount, provided your total income is above the Medicare levy threshold ($32,500 for full levy).

Can I reduce the tax on my bonus?

You can reduce the tax impact by salary sacrificing part of the bonus into superannuation (up to concessional contribution limits), claiming eligible deductions that lower your taxable income, or if your employer allows, spreading the bonus across pay periods. However, the total tax owed at the end of the year is based on total assessable income regardless of when it was paid.

Bonus Tax Calculator Australia 2025-26

See how your bonus or lump sum payment is taxed on top of your regular salary. This calculator shows the marginal tax on the bonus, Medicare levy impact, and HECS-HELP repayment difference — so you know exactly what you take home.

Last verified: 1 July 2025

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Payroll Tax Australia 2026: State-by-State Thresholds & Rates for Employers

Complete 2026 guide to payroll tax in Australia. State-by-state thresholds (NSW $1.2M, VIC $900K, QLD $1.3M) and rates (4.85-6.85%), what's included in taxable wages, grouping rules, and how to register — everything employers need to know.

Income Tax Rates 2026 Australia — How Much Tax Do I Pay? (Quick Calculator)

Find out exactly how much income tax you pay in 2025-26. Enter your salary for an instant breakdown — tax withheld, Medicare levy, HECS repayments, and take-home pay. Covers $40K to $250K+ examples.

General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.

Bonus Tax Calculator Australia 2025-26

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