Tax Return Calculator

The Medicare Levy is a 2% tax on your taxable income that helps fund Australia's public health system. Most taxpayers pay it, but exemptions and reductions apply for low-income earners and certain categories.

The Medicare Levy is typically paid when lodging your tax return, not withheld from regular pay. This is why you might see a tax payable amount equal to the Medicare Levy in your result.

The Medicare Levy Surcharge (MLS) is an additional tax for high-income earners without private hospital cover. The 2025-26 rates are:

• Base Tier: No surcharge for income up to $97,000
• Tier 1: 1.0% for income $97,001–$113,000
• Tier 2: 1.25% for income $113,001–$151,000
• Tier 3: 1.5% for income above $151,000

The surcharge applies to your total income, including all income sources.

Deductions reduce your taxable income. Common deductions include:

• Work-related expenses (uniforms, tools, work travel)
• Charitable donations to DGR-registered organisations
• Self-education costs directly related to your current job
• Investment expenses (interest on loans for income-producing assets)
• Professional memberships and subscriptions
• Tax agent fees

Capital Gains Tax (CGT) applies when you sell an asset for more than you paid. The gain is added to your taxable income and taxed at your marginal rate. Key concessions include:

• 50% CGT discount for assets held more than 12 months
• Main residence exemption for your home
• Small business concessions

Capital losses can only offset capital gains, not other income. Excess losses carry forward to future years.

Interest on loans used to buy income-producing investments (like shares or rental properties) is generally tax-deductible. This is the basis of negative gearing. Non-deductible debt includes personal loans and home loans for your primary residence.

When you claim deductible interest, it reduces your taxable income and can increase your refund. Keep records showing how borrowed money was used, as the ATO may require proof.