💰Disposable Income Calculator

Calculating Tax and the Medicare Levy

Australian taxpayers face progressive tax brackets and a standard 2% Medicare levy. If you earn above a certain threshold and don't have private hospital cover, you may also pay the Medicare Levy Surcharge. The ATO's Pay As You Go (PAYG) system ensures tax is withheld regularly. This calculator helps you see the impact of these levies on your weekly or fortnightly 'spendable' cash, allowing for better household budgeting in the Australian economy.

Australian Taxation Office (ATO)

Superannuation and Your 'Real' Salary

In Australia, the Superannuation Guarantee (currently 11% and rising) is usually paid *on top* of your quoted salary, but some contracts are 'inclusive of super.' It's important to know which one you have, as super is for retirement and isn't part of your immediate disposable income. Understanding this distinction is key when comparing job offers or using the Australian Bureau of Statistics (ABS) average earnings data to benchmark your lifestyle.

ASIC Moneysmart – Superannuation

Impact of HECS/HELP Debt Repayments

If you have a student loan (HECS/HELP), your disposable income decreases once you earn above the minimum repayment threshold. These repayments are calculated as a percentage of your *total* income, not just the amount over the threshold. Our tool factors in these mandatory repayments, which can significantly reduce the 'take-home' pay for many young Australian professionals, especially after annual indexation shifts.

StudyAssist – Australian Government

What is the average disposable income in Australia?

According to the Australian Bureau of Statistics (ABS), the median weekly household income is approximately $1,746 (after tax). However, this varies wildly by state, with residents in the ACT and WA often reporting higher disposable incomes. Using our calculator allows you to see where you sit compared to national averages and how much 'buffer' you have for rising costs like electricity and fuel in Australia.

How do tax offsets like Lamington (LITO) help?

The Low Income Tax Offset (LITO) can reduce the amount of tax you pay, effectively increasing your disposable income. While the 'Middle Income Tax Offset' has ended, the LITO remains for those earning up to $66,667. Our calculator automatically applies these Australian tax offsets to provide a more accurate net income figure for lower and middle-income earners.

Is salary packaging worth it for disposable income?

Salary packaging (or salary sacrifice) allows you to pay for certain items (like cars or laptop computers) out of your pre-tax salary. This reduces your taxable income, potentially leaving you with more disposable income. This is very common in the Australian healthcare and non-profit sectors. Use this tool to estimate your 'before and after' packaging scenarios to see the real-world impact on your wallet.

What is Disposable Income?

Disposable income is money left after essential expenses. It's what you can spend on wants, savings, or investments.

The 50/30/20 Rule

A popular budgeting guideline: 50% for needs (essentials), 30% for wants (discretionary), and 20% for savings and debt repayment.

Housing Ratio

Financial experts recommend keeping housing costs below 30% of your income to maintain a healthy budget.

Reduce Housing Costs

Consider renegotiating rent, looking for cheaper housing, getting roommates, or refinancing your mortgage. Housing is usually the biggest expense and biggest savings opportunity.

Eliminate High-Interest Debt

Credit card debt and personal loans eat into disposable income. Use the avalanche method (highest rates first) or snowball method (smallest balances first) to pay off debt.

Increase Your Income

Options include: asking for a raise, looking for a better job, side gigs or freelancing, monetizing hobbies, or creating passive income through investments.

Cut Unnecessary Expenses

Review subscriptions (streaming, gym, apps), negotiate bills (internet, phone, insurance), bring lunch to work, and compare prices before big purchases.

What percentage of my income should be disposable?

Ideally, 30-50% of your income should be disposable after essential expenses. If you are below 30%, your essential expenses may be too high.

What should I do with my disposable income?

Prioritize in order: emergency fund (3-6 months of expenses), debt payoff, retirement (at least 15% of income), then wants and entertainment.

How does housing ratio affect my disposable income?

Housing is normally 25-35% of income. If you are above 35%, there is little left for other needs and savings. Consider more affordable housing options.