Tax on your payslip starts with gross pay for the period. Your employer withholds an amount under PAYG withholding, using the ATO tax tables, and what remains after withholding and any other agreed deductions is net pay. The Medicare levy is included in that withholding in effect. Employer super is shown separately and is not normally deducted from gross pay.
To test annual figures, use our income tax calculator. To check a single pay, use our PAYG calculator. To convert a salary by pay period, use our salary calculator.
This site is independent. It is not affiliated with the ATO or any employer.
Reading a payslip in order
Layouts differ, but most payslips follow the same logic, and tax is calculated on the gross figure at the top.
First is gross pay: salary or wages for the period before tax. For a salaried employee, this is annual salary divided by the number of pays in the year. For an hourly employee, it is hours multiplied by rate, plus loadings, allowances or overtime in that pay.
Next is the PAYG withholding line: tax withheld from that gross amount. It is the main deduction for most employees, and often the only compulsory one. Then come other deductions you have agreed to, if any, such as union fees or salary sacrifice amounts. These are not tax itself. After deductions comes net pay, or take home pay: the amount paid into your bank account.
Separately, most payslips show superannuation, reported so you can see what will be paid to your fund. It is not another deduction from gross pay, unless it is a salary sacrifice contribution you chose yourself.
Gross pay is the starting point
Withholding for a period is based on gross earnings paid in that period. That is why a pay with extra overtime or a bonus can have more tax withheld, even though base salary has not changed. The gross figure moved, so withholding moved with it.
A fortnightly gross of $3,461.54 is the period expression of a $90,000 salary, because $90,000 divided by 26 is $3,461.54. Payroll works period by period, but its tables spread expected annual tax across those periods.
If gross pay is wrong, tax will be wrong too, even if payroll used the correct table. So verify gross first: hours, rate, leave and one off payments.
The PAYG withholding line
Under PAYG withholding, your employer collects income tax gradually through the year. They must use the ATO tax tables, or software based on the ATO statement of formulas, for your pay period and circumstances, including whether you claimed the tax free threshold from them.
The amount in each pay is an estimate of a slice of annual tax, not a final calculation for that fortnight alone. A higher gross in one period generally means higher withholding in that period. At return time, the ATO calculates tax on your actual annual income and credits all withholding against it. Any excess is refunded and any shortfall becomes a bill.
Our calculators estimate withholding by annualising pay and applying resident rates. That is a useful check, but not the same process as the ATO tables your employer must use, so small differences are normal.
Where the Medicare levy fits
For most people, the Medicare levy is 2 percent of taxable income. You usually will not see it as a separate payslip line beside income tax. It is part of withholding in effect, because the withholding amounts take it into account.
Some published resident tax tables do not include the Medicare levy, and say so. If you calculate tax from such a table and compare it with your payslip, withholding can look too high by about the size of the levy. Adding 2 percent usually closes most of that gap.
Our annual calculators show tax and levy separately, even though your payslip combines them. Version 1 applies the flat 2 percent and does not apply low income levy thresholds or reductions, so a low income result here may overstate the levy compared with your final return.
Super: shown, not deducted
Super guarantee contributions are not a deduction from your pay. They are either paid on top of your salary, or they form part of a total package split into salary and super before your payslip was produced.
On salary plus super, gross pay is your salary, tax is withheld from it, and super is an additional employer cost reported alongside. It does not reduce net pay. On a package including super, the gross salary portion appears as gross pay, tax is worked out on that portion, and net pay comes from that portion only.
Salary sacrifice super is the exception you choose yourself. If you direct part of before tax pay into super, that amount is deducted from gross pay by your arrangement, and reduces the pay available to be taxed and paid to you.
A verified $90,000 example
This example uses a gross salary of $90,000 in 2025-26, with Medicare levy included. These are the verified figures from the tests for this site’s calculators: income tax of $17,788, levy of $1,800, and take home pay of $70,412 a year.
| Item, 2025-26 | Annual amount |
|---|---|
| Gross salary | $90,000 |
| Income tax | $17,788 |
| Medicare levy at 2 percent | $1,800 |
| Take home pay for the year | $70,412 |
| Take home pay per fortnight | $2,708.15 |
Check it as a payslip reader should: $90,000 minus $17,788 minus $1,800 equals $70,412, and $70,412 divided by 26 is $2,708.15 a fortnight.
On one fortnightly payslip, the same example breaks down like this:
| Item per fortnight, 2025-26 | Amount |
|---|---|
| Gross pay | $3,461.54 |
| Tax and levy withheld (estimate) | $753.38 |
| Net pay | $2,708.15 |
| Super guarantee paid by your employer on top (not deducted) | $415.38 |
Amounts are rounded to the cent, so the rows can differ by a cent when added together. The super row is shown the way a payslip shows it: reported alongside your pay, paid by your employer at 12 percent of gross, and not taken out of the gross figure.
On an actual payslip for this salary, expect gross per fortnight of about $3,461.54 and net close to $2,708.15, with super shown separately. Small variations occur because the ATO table method can differ slightly from an annualised estimate. If net is far from this on a steady $90,000 salary with no other deductions, check gross, your threshold claim, and whether a study debt or salary sacrifice applies.
Why a payslip differs from an annual calculator
An annual calculator asks: on this annual income, for this year, what is the tax and levy? A payslip asks: on this period’s gross, under the ATO table for this period, what must be withheld now?
Working part of a year, variable hours, bonuses and unpaid leave all make period withholding diverge from an annual average. Offsets such as the low income tax offset are not in version 1 of our calculators, while your return does apply offsets you are entitled to. HELP repayments and the Medicare levy surcharge are also outside version 1.
Use the income tax calculator as the annual reference, the salary calculator for a normal pay cycle, and your tax return as the final settlement.
This guide is general information only and is not tax, financial or legal advice. It is not affiliated with the ATO or any employer. If your payslip still appears wrong, ask payroll to confirm gross pay, threshold setting and the table used.
Common questions
Why is there no separate Medicare levy line on my payslip?
For most employees, the levy is included in PAYG withholding in effect, rather than shown as its own deduction. Our annual calculators separate it so you can see the 2 percent component.
Is super deducted from my gross pay?
Employer super guarantee contributions are not deducted from gross pay. They are paid on top of salary, or form part of a package split before the payslip. Salary sacrifice super you choose is different, and does come out of your pay.
My tax changes every pay. Is that normal?
It can be. Withholding follows gross in each period, so overtime, allowances, bonuses, back pay and unpaid leave change withholding for that pay. Your return settles the year as a whole.
How can I check my payslip quickly?
Confirm gross first, then compare withholding with an estimate for the same period and year, allowing a small difference for the ATO table method.
Who do I contact if my payslip tax is still wrong?
Start with your employer’s payroll area, because they applied the table and hold your threshold declaration. This site cannot correct a payslip or access your tax record.