Australian bonus guide
Why tax on an Australian bonus can look high
A bonus is generally taxable income. The extra payment is added to your other income, which can mean part of it is taxed at a higher marginal rate.
Marginal rates apply to the extra income
Your full salary is not suddenly taxed at one new rate. Instead, the portion of the bonus above a tax threshold is taxed at the relevant marginal rate. The Medicare levy may also increase with taxable income.
Withholding is a payroll estimate
Your employer uses PAYG withholding rules when paying the bonus. The amount withheld is not necessarily your final tax liability; your full-year income, deductions, offsets and other circumstances determine that.
Use an estimate carefully
Our bonus calculator compares estimated annual tax with and without the bonus. It does not model HELP, offsets or all Medicare adjustments. For official context, consult the ATO's resident tax-rate information.