Commission Tax Calculator Australia

How Is Commission Taxed in Australia?

Commission is ordinary income. It goes into the same assessable-income total as your salary, and the ATO taxes that total through the 2026-27 brackets. There is no commission tax rate, no flat rate and no separate return — a commission is simply more income in the year it is paid.

What makes commission feel heavily taxed is that it sits on top of your salary, so every dollar of it is taxed at your marginal rate rather than your average rate. On a $80,000 salary, a $5,000 commission adds $1,600 to the year's tax — 32.0% of the commission, including the 2% Medicare levy — while the same worker's average rate on their salary is far lower.

How Much Is Withheld From a Commission Payment?

When a commission is paid on top of normal earnings, your employer withholds under ATO Schedule 5 — the tax table for back payments, commissions, bonuses and similar payments. Method B(ii), which this calculator and our Schedule 5 tax table both use, works like this:

1. Divide the commission by the number of pay periods in the year (52 weekly, 26 fortnightly, 12 monthly) and ignore cents.
2. Work out withholding on your normal pay, then on your normal pay plus that slice.
3. Multiply the difference back out by the number of pay periods.
4. Cap the result at 47% of the commission (including any study loan component).

Worked example — $5,000 commission paid in one fortnight on $80,000: regular withholding $622 a fortnight; with a $192 slice added it becomes $682; the $60 difference × 26 = $1,560 withheld, leaving $3,440 in hand. Against the $1,600 the commission really adds to the year, the $40 difference is added to the bill at tax time.

Commission Paid Every Pay, Quarterly or One-Off

The annual tax does not care how the commission arrives — $5,000 of commission adds the same $1,600 whether it lands in one pay or twelve. Withholding does care, because each payment is worked out on its own:

• Retainer plus commission, paid every pay. Small regular commissions are withheld close to their true annual cost; the settlement at tax time is usually minor.
• Quarterly or one-off commission. A large payment in one period is exactly what Schedule 5 is designed for. Enter the single payment above to see the withholding on that pay.
• Commission-only. With no base, enter $0 salary. The annual figure is the tax on your commission income alone; withholding on irregular pays can drift further from it, so keep something aside for tax time.

Tax on Commission at Common Amounts (2026-27)

Tax the commission adds to the year, with the effective rate on the commission in brackets. Resident rates including Medicare, no study loan.

Is Super Paid on Commission?

Yes. Commission for work performed is ordinary time earnings, so it attracts the 12% Superannuation Guarantee on top of the commission — $600 on a $5,000 commission — up to the quarterly maximum contribution base. Check your payslip shows super on the commission line, not just on base salary; the super guarantee calculator shows what the year's total should be. Comparing a sales offer quoted as OTE (on-target earnings)? See what OTE salary means.

Commission as a Contractor

Real estate, recruitment and sales agents often earn commission under an ABN rather than as employees. Then nothing is withheld: the commission is business income, GST applies once turnover passes $75,000, and the ATO may ask for PAYG instalments through the year. The tax rate is the same individual rate — the difference is who sets the money aside. The contractor pay calculator shows commission income after tax and GST, and contractor vs employee compares the two on the same money.

Commission, HECS-HELP and the Medicare Levy Surcharge

Commission counts toward repayment income, so a good year can lift a HECS-HELP repayment into a higher band (the threshold is $69,528 in 2026-27); tick the study-loan box above to include the STSL component in both figures. It also counts toward income for the Medicare levy surcharge if you have no private hospital cover.

Common Commission Tax Mistakes

1. Reading the withholding as the tax. The payslip deduction is an estimate from one pay period; the annual figure above is what the commission actually costs.
2. Expecting a flat rate. There is none. Two people paid the same $5,000 commission pay different tax if their salaries sit in different brackets.
3. Spending the gross. Set aside the annual figure, not the withholding, if your commission is irregular or paid under an ABN.
4. Missing super on commission. It is OTE; SG is payable on it.
5. Timing. Commission is assessable in the year it is paid. A payment on 1 July belongs to the new year.

Related Calculators

• Bonus tax calculator — the same maths for a bonus.
• Schedule 5 tax table — the ATO withholding table this page uses, with every pay frequency.
• Back pay calculator — arrears and Lump Sum B.
• Pay rise calculator — what a permanent increase is worth after tax.
• Take-home pay calculator — the full year with commission included.

Frequently Asked Questions