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Bonus Tax Calculator Australia 2026–27

A bonus is ordinary income: the final tax on it is the extra tax at your marginal rate. Employers withhold using the ATO's bonus method, so withholding can differ until you lodge.

Updated 2026-10-03 · ATO and official government rates

Bonus after tax$6,80068% kept · marginal 32% incl. Medicare · 2026–27
Extra income tax$3,000
Extra Medicare levy$200
Super guarantee on bonus (if OTE)$1,200

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How bonuses are taxed in Australia

A bonus is taxed as ordinary income at your marginal rate. There is no separate "bonus tax". The final tax on a bonus is the extra tax your whole-year income attracts because of it. If the bonus pushes you into a higher bracket, only the part above the threshold is taxed at the higher rate.

Take a $20,000 bonus on a $120,000 salary. The first $15,000 is taxed at 32% including the Medicare levy, and the rest at 39%. In total the bonus costs $6,750, so you keep $13,250. Without private hospital cover, the same bonus moves you into a higher Medicare levy surcharge tier, and the new rate applies to your whole income. The bonus then costs $7,300.

How your employer withholds tax from a bonus (ATO Schedule 5)

Employers do not simply add a bonus to one pay and use the normal tax table. That would treat the bonus as if you earned it every pay period. The ATO's Schedule 5 says a bonus or commission earned over more than one pay period must use Method A or Method B(ii). These spread the bonus across the year's pay periods. A bonus that relates to a single pay period is simply added to that pay.

Here is Method A in 2026–27 for a bonus of $8,000, paid to an employee on $85,000 a year ($3,269 a fortnight):

StepCalculationResult
1–2Normal tax on $3,269$682
3$8,000 ÷ 26 pay periods (cents ignored)$307
4–5Tax on $3,269 + $307$782
6–7($782 − $682) × 26$2,600
847% of the bonus (the limit)$3,760
9Withheld from the bonus: the lower of steps 7 and 8$2,600

Is bonus withholding more than the tax you owe?

With Method A the result is usually close to the final tax. In the example, $2,600 is withheld, and the bonus actually adds $2,560 to the year's tax and Medicare levy. Had the payroll simply added the $8,000 to one fortnight, $3,304 would have been withheld. The extra is not lost: it is credited against your tax when you lodge. Your income statement shows the total withheld for the year, and that is what your return compares with your actual tax.

The 47% limit can work the other way. If you have a study loan, or the bonus takes you into the top bracket, 47% may not cover everything. The ATO suggests asking your employer for an upwards variation if you expect a bill. The ATO's own Schedule 5 example shows a $900 bonus to someone earning $1,400 a week with a HELP debt. It produces $260 of tax and $104 of HELP withholding on the bonus.

Super on bonuses

Most bonuses attract 12% super guarantee. On the ATO's list, performance bonuses, Christmas bonuses, sign-on bonuses, referral bonuses and return-to-work bonuses all count as ordinary time earnings. Since 1 July 2026 they are also "qualifying earnings" under Payday Super, and super is paid with each payday. The $8,000 bonus above should add $960 to your super. The exception is a bonus paid solely for work done entirely outside ordinary hours, which is treated like overtime and attracts no super guarantee.

Can you salary sacrifice a bonus into super?

Only if you arrange it before the bonus is earned. The ATO says an effective salary sacrifice arrangement cannot include bonuses or commissions you accrued before entering it. Asking to redirect a bonus already announced for last year's work does not work for tax purposes. If it is set up in time, the sacrificed amount is taxed at 15% in your fund instead of at your marginal rate. It counts towards the $32,500 concessional cap together with your employer's 12%.

Frequently asked questions

Are bonuses taxed more in Australia?

No. Bonuses are added to your income and taxed at your marginal rate. More may be withheld from the pay that includes the bonus, but any overpayment is refunded when you lodge.

Why was so much tax taken out of my bonus?

Usually because the bonus was added to a single pay and taxed with the normal table, as if you earned that much every pay. Schedule 5 spreads it over the year instead. Either way, any excess withholding comes back when you lodge your return.

Are bonuses taxed at 47%?

No. 47% is the most an employer can withhold from a bonus using Schedule 5 Method A or B(ii). It equals the top rate plus the Medicare levy. Your actual tax on the bonus depends on your marginal rate for the year.

Do I get super on my bonus?

Yes for most bonuses, including performance, Christmas and sign-on bonuses, at 12%. A bonus paid only for work done entirely outside ordinary hours is the exception.

Does a bonus affect my HECS repayment?

Yes. A bonus increases your repayment income, so it can start or increase your compulsory repayment. Repayments begin at $69,528 in 2026–27, with each dollar above it repaid at 15% up to $129,717.

Sources

Figures are taken from official government publications and were last reviewed on 2026-10-03.

  1. ATO: Tax rates – Australian resident (Resident tax rates 2026–27 and 2025–26)
  2. ATO: Tax rates – foreign resident (Foreign resident tax rates 2025–26)
  3. ATO: Tax rates – working holiday makers (Working holiday maker tax rates 2025–26)
  4. ATO: Medicare levy reduction for low-income earners (Table: Medicare levy thresholds for a single individual, 2025–26)
  5. ATO: Medicare levy reduction – family income (family taxable income thresholds 2025–26, +$4,338 per dependent child)
  6. ATO: Medicare levy surcharge income, thresholds and rates (MLS income thresholds and rates for 2026–27 and 2025–26)
  7. ATO: Low income tax offset ($700 max; −5c per $1 over $37,500; −1.5c per $1 over $45,000; nil from $66,667)
  8. ATO: Seniors and pensioners tax offset (SAPTO rates and rebate income thresholds for 2025–26; 12.5c per $1 reduction)
  9. ATO: Study and training loan repayment thresholds and rates (Table 1: 2026–27, Table 2: 2025–26)
  10. ATO: Schedule 1 (NAT 1004) – Using a formula (x = whole dollars + 99c; round to nearest dollar, 50c up)
  11. ATO: Personal income tax – new tax cuts for every Australian taxpayer (2026–27 SAPTO thresholds)
  12. ATO: Schedule 15 – Tax table for working holiday makers (Table A: rates for 2026–27, payments from 1 July 2026)
  13. ATO: Schedule 1 – Statement of formulas for calculating amounts to be withheld (NAT 1004), payments from 1 July 2026 – weekly coefficients
  14. ATO: Schedule 1 (NAT 1004) – Withholding amounts sample data, weekly (from 1 July 2026)
  15. ATO: Schedule 8 – Statement of formulas for calculating study and training support loans components (NAT 3539), payments from 1 July 2026
  16. ATO: Key super rates and thresholds – Contributions caps (Table 1.1 concessional, Table 4 non-concessional)
  17. ATO: Understanding concessional and non-concessional contributions (concessional contributions taxed in the fund at 15%)
  18. ATO: Key super rates and thresholds – Division 293 tax (Table 7: $250,000 threshold, 15% rate)
  19. ATO: Key super rates and thresholds – Super guarantee (Table 21 SG %, Tables 23–24 maximum contribution base)
  20. ATO: Key super rates and thresholds – Government contributions (Table 25 co-contribution thresholds; LISTO)
  21. ATO: Low income super tax offset (15% of concessional contributions, max $500, income $37,000 or less)
  22. ATO: Key super rates and thresholds – Transfer balance cap (Table 26)
  23. ATO: Key super rates and thresholds – Payments from super (Table 12 preservation age)
  24. ATO: Key super rates and thresholds – Employment termination payments (Table 17 ETP cap, Table 20 genuine redundancy limits)
  25. ATO: How ETP components are taxed (17%/32% incl. Medicare; $180,000 whole-of-income cap; 45% + 2% above cap)
  26. ATO: How GST works (10% rate)
  27. ATO: Registering for GST ($75,000 / $150,000 non-profit; taxi or limousine travel incl. ride-sourcing regardless of turnover)
  28. ATO: CGT discount (50% individuals and trusts, 33.33% complying super funds, 12-month ownership)
  29. ATO: Tax reform – Reforming negative gearing and capital gains tax (applies from 1 July 2027)
  30. ATO: Changes to company tax rates (25% base rate entity, $50m aggregated turnover, 2021–22 and future years)
  31. ATO: Company tax rates 2025–26
  32. ATO: Instant asset write-off for eligible businesses (Table 1: $20,000, turnover under $10 million)
  33. ATO Small business newsroom: $20,000 instant asset write-off here to stay (permanent from 1 July 2026)
  34. ATO: Small business income tax offset (16%, max $1,000, turnover under $5 million, 2021–22 onwards)
  35. Fair Work Ombudsman: Minimum wage increase starts today (1 July 2025 – $948.00/week, $24.95/hour, casual $31.19)
  36. Fair Work Ombudsman: Minimum wage increase starts today (1 July 2026 – $1,004.90/week, $26.44/hour, casual $33.05)
  37. Fair Work Commission: Annual Wage Review 2026 ([2026] FWCFB 3500, announced 2 June 2026)
  38. ATO: Schedule 5 – Tax table for back payments, commissions, bonuses and similar payments (published 17 June 2026)
  39. ATO: Schedule 5 – Working out the withholding amount (Method A, Method B, 47% withholding limit)
  40. ATO: Schedule 5 – Withholding amounts examples
  41. ATO: What payments are qualifying earnings (Payday Super, from 1 July 2026)
  42. ATO: List of payments that are ordinary time earnings (earnings paid up to 30 June 2026)
  43. ATO: Salary sacrificing for employees