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People reading this page usually work these out too.
Two numbers people confuse: the tax a commission adds to your year, and the amount your employer withholds from the commission pay under ATO Schedule 5. This calculator shows both for 2026-27, and the refund or bill that settles the gap.
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.
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:
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.
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:
Tax the commission adds to the year, with the effective rate on the commission in brackets. Resident rates including Medicare, no study loan.
| Base salary | $2,000 commission | $5,000 commission | $10,000 commission | $20,000 commission |
|---|---|---|---|---|
| $60,000 | $670 (34%) | $1,675 (34%) | $3,300 (33%) | $6,500 (33%) |
| $80,000 | $640 (32%) | $1,600 (32%) | $3,200 (32%) | $6,400 (32%) |
| $100,000 | $640 (32%) | $1,600 (32%) | $3,200 (32%) | $6,400 (32%) |
| $130,000 | $640 (32%) | $1,600 (32%) | $3,550 (36%) | $7,450 (37%) |
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.
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 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.
Two calculations, two engines:
Commission is ordinary assessable income. It is added to your salary and taxed at your marginal rate for the year — there is no separate or flat commission tax rate. On a $80,000 salary, a $5,000 commission adds $1,600 to your 2026-27 tax (32.0% of the commission), including the 2% Medicare levy.
Your employer withholds under ATO Schedule 5 (back payments, commissions, bonuses and similar payments). The commission is apportioned across the pay periods in the year, the extra withholding on one period is worked out, and that is multiplied back out. A $5,000 commission paid in one fortnight on a $80,000 salary has $1,560 withheld (31.2%), leaving $3,440 in hand.
Because withholding is an estimate made from one pay period, while your real tax is assessed on the whole year. The two usually differ by a small amount, and the difference is settled when you lodge — over-withholding comes back as part of your refund, under-withholding is added to your bill. Schedule 5 also caps withholding on any commission at 47% of the payment.
No. The ATO treats commissions, bonuses, back pay and similar one-off payments identically: all are assessable income taxed at your marginal rate, and all are withheld under Schedule 5 when paid on top of normal earnings. The only difference is the label on your payslip.
Yes. Commission earned for work performed is ordinary time earnings, so your employer must pay the 12% Superannuation Guarantee on it in addition to the commission itself. A $5,000 commission attracts $600 of super, up to the maximum contribution base.
The same way — it is your assessable income for the year and is taxed through the ordinary brackets, from 15% above the tax-free threshold to 45% plus Medicare at the top. Enter a base salary of $0 in the calculator to see the annual tax on commission alone. Because commission-only income is irregular, withholding and the assessed amount can differ more than for salaried workers.
Yes. Commission earned under an ABN is business income: you include it in your tax return, register for and charge GST once your turnover passes $75,000, and may need to pay PAYG instalments during the year. No tax is withheld by the payer unless you have not quoted an ABN. Use the contractor pay calculator to see the take-home after tax and GST.
Yes. Compulsory repayments are worked out on repayment income, which includes commission. If a commission takes your repayment income above the $69,528 threshold for 2026-27, or into a higher repayment band, the repayment rises with it — and STSL is withheld from the commission payment under Schedule 5 too.
47% of the commission, including any study and training support loan component. If the Schedule 5 calculation produces more than that, the employer withholds 47% and the rest is settled at tax time.
Last verified: 28 July 2026. Our content is based on the latest information from official Australian government sources.
Senior Tax & Payroll Analyst
CPA, Registered Tax Agent (25787011)
James is a CPA-qualified tax professional with over 14 years of experience in Australian taxation and payroll systems. He spent six years at the Australian Taxation Office working on PAYG withholding and individual tax return processing before moving into financial publishing. He now leads the tax content at Pay Calculator Australia, translating complex ATO legislation into clear, actionable guidance.
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