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People reading this page usually work these out too.
Work out the extra tax you'll actually owe on a bonus or commission payment for the year. See the marginal tax rate applied to your lump sum and your actual take-home bonus.
Bonus tax in Australia is calculated by applying your marginal tax rate to the bonus amount, because the ATO treats the bonus as income earned on top of your regular salary.
This calculator works out the extra tax you'll actually owe on your bonus for the year. It compares two figures: the annual tax on your base salary alone, and the annual tax on your base salary plus the bonus. The difference between those two figures is the tax the bonus adds to your annual bill — the part of the bonus you don't keep.
An employee earns a base salary of $90,000 and receives a $10,000 performance bonus. The bonus tax calculation follows 4 steps:
This is the same annualised logic the tax system settles on when you lodge your return. Use our Income Tax Calculator to verify your base salary tax figures independently.
There are two different numbers people call "tax on my bonus," and they rarely match to the dollar. This page calculates the first one: the extra tax you'll actually owe on your bonus for the year — the amount the bonus adds to your annual tax liability.
The second number is what your employer takes out of the bonus paycheque itself. That is PAYG withholding, calculated under the ATO's Schedule 5 tax table for back payments, commissions and bonuses. Schedule 5 works from your regular pay-period withholding amounts rather than your finished annual return, so the amount withheld from the paycheque can be somewhat more or less than the tax the bonus ultimately adds to your year.
Any gap settles itself when you lodge: if your employer withheld more than the bonus's real tax cost, the difference comes back as part of your refund; if less, it reduces your refund or adds to a bill. For the withholding side — what will actually be taken out of the paycheque — see our Schedule 5 tax table guide.
Bonuses are taxed at your marginal tax rate plus the 2% Medicare levy, not a flat "bonus tax rate." The marginal rate depends on which income tax bracket your combined salary and bonus falls into for FY2026-27.
Australia does not have a separate bonus tax rate. A bonus is simply added to your taxable income for the year and taxed under the standard individual income tax brackets — so the extra tax you owe depends on the bracket your combined salary and bonus reaches.
| Taxable Income | Marginal Rate | + Medicare (2%) | Total on Bonus |
|---|---|---|---|
| $0 – $18,200 | 0% | 2% | 2% |
| $18,201 – $45,000 | 15% | 2% | 17% |
| $45,001 – $135,000 | 30% | 2% | 32% |
| $135,001 – $190,000 | 37% | 2% | 39% |
| $190,001+ | 45% | 2% | 47% |
A bonus that pushes your total income from one bracket into the next is split: the portion within the lower bracket is taxed at the lower rate, and the portion in the higher bracket is taxed at the higher rate. Use the Take-Home Pay Calculator to model different salary-plus-bonus scenarios.
Australian employees, payroll managers, and financial planners use this calculator to determine the after-tax value of lump-sum payments before they are paid or received.
Bonus tax is calculated at the marginal rate, while regular salary tax uses a blended effective rate across all brackets. This is why a bonus feels more heavily taxed than ordinary income.
| Factor | Regular Salary | Bonus / Commission |
|---|---|---|
| Tax rate applied | Blended effective rate across all brackets | Marginal rate on the top dollar of income |
| Effective rate at $90K salary | 21.5% (including Medicare) | 32% (30% + 2% Medicare) |
| Tax-free threshold benefit | Yes — first $18,200 is tax-free | No — already consumed by base salary |
| LITO offset | Applied — up to $700 reduction | Usually nil for incomes above $66,667 |
| Employer withholding method | ATO Schedule 1 (regular pay cycles) | ATO Schedule 5 (supplementary payments) |
| Super guarantee (12%) | Applies to ordinary earnings | Applies if bonus is qualifying earnings |
The effective tax rate on a $10,000 bonus for an employee on $90,000 base salary is 32%, compared to an overall effective rate of approximately 21.5% on their regular salary. The difference arises because the $18,200 tax-free threshold and lower brackets are already used by the base salary. Use the Salary Sacrifice Calculator to explore whether pre-tax contributions reduce your bonus tax impact.
The tax on a bonus ranges from 17% to 47% depending on your combined salary and bonus total. The table below shows worked examples across 5 salary levels for FY2026-27.
| Salary | Bonus | Marginal Rate | Tax on Bonus | Net Bonus |
|---|---|---|---|---|
| $60,000 | $5,000 | 32% | -$1,675 | $3,325 |
| $80,000 | $10,000 | 32% | -$3,200 | $6,800 |
| $100,000 | $15,000 | 32% | -$4,800 | $10,200 |
| $120,000 | $20,000 | 39% | -$6,750 | $13,250 |
| $150,000 | $25,000 | 39% | -$9,750 | $15,250 |
From 1 July 2026, the marginal rate for the $18,201–$45,000 bracket fell from 16% to 15% — the first bracket change since the Stage 3 cuts of July 2024, which had already lowered the middle bracket from 32.5% to 30%.
An employee on $90,000 receiving a $10,000 bonus pays $3,200 in tax on the bonus (32%) — the same as FY2025-26, because both figures sit in the unchanged 30% bracket. Their saving shows up in the annual tax bill instead. Check the full impact on your salary using our Take-Home Pay Calculator.
The most common mistake is assuming bonuses are taxed at a flat "bonus rate" — they are taxed at your marginal rate, which depends on your total assessable income.
Looking for the Age Pension Work Bonus? That is not a bonus payment but an income-test offset for working pensioners — see the Age Pension income test calculator.
From a tax perspective, no. The ATO treats bonuses, commissions, and similar one-off payments identically: both are added to your annual income and taxed at your marginal rate, and on the withholding side both are supplementary payments under Schedule 5. Whether your payment is called a "performance bonus," "sales commission," or "incentive payment," the tax calculation is the same.
The only practical difference is frequency: commissions are often paid monthly or quarterly, while bonuses tend to be annual or one-off. Frequent commission payments can trigger PAYG instalment obligations if your total income exceeds ATO thresholds. Track your annual earnings using the Annual Pay Calculator.
Paid commission rather than a bonus? The commission tax calculator shows the same two figures — the tax it adds to your year and the Schedule 5 withholding on the pay — for retainer-plus-commission, quarterly and commission-only structures.
You receive a tax refund on your bonus only if your employer withheld more tax than your actual liability — the Schedule 5 method minimises this gap, so most refunds on bonus withholding are small or zero.
Over-withholding happens in 3 common scenarios:
When you lodge your tax return, the ATO calculates your actual tax liability on total income (salary plus bonus) and compares it to total PAYG withholding throughout the year. The difference is your refund or balance owing. See our Tax Refund Guide for a full explanation of how refunds are calculated.
The most effective way to reduce tax on a bonus is to salary sacrifice it into superannuation, converting a marginal rate of up to 47% into a flat 15% contributions tax.
Directing part or all of a bonus into superannuation as a concessional (before-tax) contribution reduces taxable income. The contribution is taxed at only 15% inside the super fund, compared to marginal rates of 30%–47% outside super. A worker on $120,000 who sacrifices a $10,000 bonus saves approximately $1,700 in tax ($3,200 at the marginal rate minus $1,500 in super contributions tax).
The concessional contribution cap for FY2025-26 is $30,000 per year, including employer SG contributions of 12%. A worker earning $120,000 receives $14,400 in SG, leaving $15,600 of cap space for salary sacrifice. Workers with unused cap space from previous years (where their super balance was below $500,000 on 30 June) can carry forward up to 5 years of unused amounts. See our Salary Sacrifice Guide for a detailed walkthrough.
A bonus is assessable income in the financial year it is paid, not the year it is earned. If you expect lower income next financial year — due to parental leave, career break, or part-time work — ask your employer to defer the bonus payment into the new financial year. A $10,000 bonus taxed at the 30% bracket costs $3,200 in tax. The same bonus taxed at the 16% bracket (if income drops below $45,000) costs only $1,800 — a saving of $1,400.
Work-related deductions reduce your taxable income, potentially pulling bonus income down into a lower tax bracket. Common deductions that offset bonus taxation include self-education expenses, home office costs, professional memberships, and income protection insurance premiums. Every $1,000 in deductions at the 37% marginal rate reduces tax by $370.
Bonuses for work performed are generally classified as "Ordinary Time Earnings" (OTE) and attract the 12% Superannuation Guarantee for FY2025-26.
Your employer pays the SG rate of 12% on top of your bonus, depositing it into your super fund. A $10,000 performance bonus generates $1,200 in additional super contributions. However, some bonus types are excluded from OTE:
The maximum super contribution base for FY2025-26 is $65,070 per quarter. Employers are not required to pay SG on earnings above this cap. For more detail on contribution limits and rates, see our Superannuation Guide.
"Lump Sum B" is a back payment relating to previous financial years, and the ATO spreads it across the relevant years to prevent an unfair tax bracket increase in the current year.
Back payments relating to previous financial years are handled under Lump Sum B on your payment summary. The tax on these is calculated differently — the ATO spreads the payment across the relevant years to avoid unfairly pushing you into a higher bracket for the current year. Your employer reports the amount and the number of years it relates to. The ATO then calculates the correct tax at lodgment time.
Common examples of Lump Sum B payments include retrospective pay rises under enterprise agreements, back-paid award rate increases, and settlement payments for underpayment claims. A $6,000 back payment covering 3 financial years is split as $2,000 per year, and the ATO calculates the marginal rate for each year independently.
Bonus tax is one component of your total tax position for the 2026-27 financial year. These Australian tax calculators address the broader picture:
This calculator estimates tax on bonuses using the following method:
Bonuses are taxed at your marginal tax rate as part of your annual income. Because the bonus sits on top of your regular salary, it is taxed at whatever bracket your total income falls into — from 15% (for incomes between $18,201 and $45,000) to 45% (for incomes above $190,000), plus the 2% Medicare levy. Your employer may withhold tax from the bonus paycheque using the ATO's Schedule 5 method, but the tax you actually owe on the bonus is settled when you lodge your annual return.
Because the bonus is taxed at your marginal rate, not your effective rate. If your salary puts you in the 30% bracket, 32% (30% + 2% Medicare) applies to every dollar of the bonus — even though the overall effective tax rate on a $90,000 salary is only about 21.5%. The tax-free threshold and lower brackets are already used up by your regular income.
Generally yes. Performance, Christmas, sign-on and referral bonuses all count as qualifying earnings under Payday Super, so they attract the 12% Superannuation Guarantee. The main exception is a bonus paid solely for work performed entirely outside your ordinary hours, which is excluded. Check your employment contract or ask your payroll department to confirm how your specific bonus is treated.
Only the difference, if your employer withheld more from the bonus paycheque than the tax the bonus actually added to your year. This calculator shows that actual annual figure. The Schedule 5 withholding method is designed to land close to it, so any refund attributable to a bonus is typically small — usually under $200 for a $10,000 bonus.
No. Australia does not have a flat bonus tax rate. Unlike some countries (the US uses a 22% flat supplemental rate), Australia adds bonuses to your annual assessable income and taxes them at your marginal tax rate. The rate depends entirely on your total income for the financial year.
Salary sacrifice part of your bonus into superannuation as a concessional contribution, taxed at only 15% inside super instead of your marginal rate of up to 47%. The concessional contributions cap is $32,500 per year for FY2026-27 (including employer SG). Alternatively, claim all eligible work-related deductions to reduce your total taxable income and potentially lower the marginal rate applied to the bonus.
Yes. HECS-HELP repayments are based on your total repayment income, which includes your salary plus any bonuses, commissions, and fringe benefits. A bonus that pushes your repayment income above the $69,528 minimum threshold triggers a compulsory repayment. The marginal repayment rate starts at 15% on income above $69,528 under the FY2026-27 marginal system.
The timing within a financial year does not change your total tax liability — your annual tax is calculated on total income regardless of when it is received. However, if your employer can defer a bonus payment to the next financial year (e.g., from June to July), it shifts the income into a different tax year and could result in a lower marginal rate if your income is lower in that year.
Yes, if your employer allows it. Directing your bonus into super as a concessional contribution means it is taxed at only 15% (instead of your marginal rate). However, the contribution counts towards your $30,000 concessional cap. See our salary sacrifice guide for details.
Yes, for performance-related bonuses. Bonuses classified as "Ordinary Time Earnings" attract the 12% Superannuation Guarantee. A $10,000 performance bonus generates $1,200 in additional super. Sign-on bonuses, retention bonuses, and referral bonuses are generally excluded from OTE and do not attract SG.
Your bonus sits on top of your regular salary, so every dollar is taxed at your highest marginal rate. A worker earning $90,000 pays an average tax rate of about 23% on total income but the bonus is taxed at 32% (30% plus 2% Medicare levy) because it falls entirely in the top bracket. Some payroll systems also annualise the pay period containing the bonus, which can produce even higher withholding that is corrected when you lodge your return.
Yes. The ATO treats commissions, bonuses, incentive payments, and profit-share distributions identically for PAYG withholding purposes. All are supplementary payments subject to Schedule 5 withholding at your marginal tax rate.
Each bonus is taxed using Schedule 5 based on your year-to-date earnings at the time of payment. The second bonus sits on top of your salary plus the first bonus, so it is taxed at a potentially higher marginal rate. A worker on $120,000 who receives two $10,000 bonuses pays 32% on the first and 32% on the second (both within the $45K–$135K bracket). If the second bonus pushes total income above $135,000, the portion above $135,000 is taxed at 39%.
The same way as full-time workers. The ATO does not differentiate between employment types for bonus taxation. A part-time worker earning $30,000 per year who receives a $5,000 bonus has the bonus taxed at the 16% marginal rate (plus 2% Medicare levy) because total income of $35,000 falls in the $18,201–$45,000 bracket. The lower income base means part-time workers typically face a lower marginal rate on bonuses than full-time workers.
Non-residents do not receive the $18,200 tax-free threshold and pay tax from the first dollar. The non-resident marginal rate on bonuses starts at 30% for income up to $135,000, then 37% up to $190,000, and 45% above $190,000. Non-residents do not pay the Medicare levy. See our Non-Resident Tax Guide for full rates.
Yes. "Division 293" imposes an additional 15% tax on concessional super contributions when income (including super contributions) exceeds $250,000. If a bonus pushes your combined income and super above this threshold, any concessional contributions — including salary-sacrificed bonus amounts — are taxed at 30% instead of 15% inside super.
Last verified: 28 July 2026. Our content is based on the latest information from official Australian government sources.