Your manager offers you a 5% pay rise. On an $80,000 salary, that sounds like a tidy $4,000 extra a year. But before you mentally spend it, there is a catch: every dollar of that rise is taxed at your marginal tax rate, not your average rate. The result? Of that $4,000, only $2,720 ever reaches your bank account. Still a decent win — but nearly a third of your pay rise never makes it past the ATO.
What is a 3%, 5% or 10% pay rise actually worth after tax in 2025–26? We have worked out all three rises side by side at five common Australian salaries — $60,000, $80,000, $100,000, $120,000 and $150,000 — using the ATO’s 2025–26 resident tax rates plus the 2% Medicare levy. Every figure below comes from the actual tax brackets: no estimates.
The short version: if you earn between $60,000 and $120,000, you keep about 68 cents of every pay-rise dollar. At $150,000 you keep about 61 cents. The tables below show the exact amounts, and if your salary is not listed, our pay rise calculator will work out your precise figure in seconds.
The quick answer: 3% vs 5% vs 10% after tax
Here is the bottom line first. This table shows the real, in-your-pocket value of each rise — per year and per fortnight — at five salaries:
| Base salary | 3% rise — you keep | 5% rise — you keep | 10% rise — you keep |
|---|---|---|---|
| $60,000 | $1,224/yr ($47/fortnight) | $2,040/yr ($78/fortnight) | $4,080/yr ($157/fortnight) |
| $80,000 | $1,632/yr ($63/fortnight) | $2,720/yr ($105/fortnight) | $5,440/yr ($209/fortnight) |
| $100,000 | $2,040/yr ($78/fortnight) | $3,400/yr ($131/fortnight) | $6,800/yr ($262/fortnight) |
| $120,000 | $2,448/yr ($94/fortnight) | $4,080/yr ($157/fortnight) | $8,160/yr ($314/fortnight) |
| $150,000 | $2,745/yr ($106/fortnight) | $4,575/yr ($176/fortnight) | $9,150/yr ($352/fortnight) |
A few things jump out immediately:
- A 10% rise is never worth 10% in your pocket. On $100,000, a 10% rise sounds like $10,000 — but you keep $6,800. On $120,000, you keep $8,160 of a $12,000 gross rise.
- The fortnightly figure is what you will actually notice. A 5% rise at $80,000 is an extra $105 in each pay packet; a 3% rise at $60,000 is $47 a fortnight.
- The ratio is remarkably consistent: every salary from $60,000 to $120,000 keeps exactly 68% of the gross rise; at $150,000 it drops to 61% as a higher marginal rate kicks in. The next section explains why.
How the after-tax value of a pay rise is worked out
The method takes four steps:
- Multiply your salary by the rise percentage to get the gross annual increase. A 5% rise on $80,000 is $4,000.
- Find your marginal tax rate — the rate that applies to your last dollar of income, which is where the entire rise sits. For most full-time earners in 2025–26, that is 32% (30% income tax plus the 2% Medicare levy). Above $135,000 of taxable income, it is 39% (37% plus 2% Medicare).
- Calculate the tax and Medicare on the rise by multiplying the gross rise by that marginal rate. On a $4,000 rise at 32%, that is $1,280.
- Subtract it. $4,000 − $1,280 = $2,720 in your pocket. Divide by 26 for the fortnightly figure, or by 52 for weekly.
Here is the worked example in full for a 5% rise on $80,000:
| Detail | Amount |
|---|---|
| Current salary | $80,000 |
| Salary after 5% rise | $84,000 |
| Gross annual rise | $4,000 |
| Marginal rate on the rise | 32% (30% income tax + 2% Medicare levy) |
| Extra income tax + Medicare | $1,280 |
| After-tax value of the rise | $2,720 per year |
| Extra pay per fortnight | ≈ $105 |
| Extra employer super (12% SG) | $480 per year |
Notice the last line: your employer’s superannuation guarantee contribution rises with your salary at the 12% SG rate in force since 1 July 2025. That $480 goes into your super fund, not your pay packet, but it is real money. For your own numbers, our pay rise calculator handles the marginal-rate maths for you.
Why you keep less than the gross percentage
The reason your after-tax rise is always a smaller percentage than the gross rise comes down to one concept: marginal tax rates. Australia does not tax all of your income at a single rate. It taxes your income in layers, and the pay rise sits entirely in the top layer.
On $80,000, the total tax and Medicare bill is $16,388 — an average rate of about 20.5%. But the $4,000 rise is not taxed at 20.5%; it is taxed at 32%, because it sits on top, inside the 30% bracket plus the 2% Medicare levy. The average rate describes the past; the marginal rate describes the next dollar.
Here are the 2025–26 resident income tax brackets, and the marginal rate (tax plus Medicare) on a pay rise at each salary in this guide:
| 2025–26 taxable income band | Income tax rate |
|---|---|
| $0 – $18,200 | 0% (tax-free threshold) |
| $18,201 – $45,000 | 16c per $1 |
| $45,001 – $135,000 | 30c per $1 |
| $135,001 – $190,000 | 37c per $1 |
| $190,001 and over | 45c per $1 |
| Your salary | Marginal rate on your pay rise | You keep of each rise dollar |
|---|---|---|
| $60,000 | 32% (30% + 2% Medicare) | 68c |
| $80,000 | 32% (30% + 2% Medicare) | 68c |
| $100,000 | 32% (30% + 2% Medicare) | 68c |
| $120,000 | 32% (30% + 2% Medicare) | 68c |
| $150,000 | 39% (37% + 2% Medicare) | 61c |
Pay rises near a bracket boundary also deserve a second look — the maths changes mid-rise. If you earn $133,000 and get 5% (to $139,650), the first $2,000 of the rise is taxed at 32% and the rest at 39%. You are still better off, but the after-tax value lands slightly below a straight 32% calculation.
Watch out for bracket creep, too: the 2025–26 thresholds are identical to 2024–25, so as salaries grow in nominal terms, more income is taxed at higher marginal rates over time. The legislated cut of the second bracket from 16% to 15% arrives in 2026–27.
Don’t forget your super: the 12% you don’t see in your pay
Every gross pay rise does double duty: your employer must pay superannuation guarantee contributions of 12% of your ordinary time earnings, and they rise automatically with your salary. The extra super is not in your fortnightly pay, but it is real value — and unlike take-home pay, it is not shaved by income tax at your marginal rate.
Here is the hidden super bonus on each rise in this guide:
| Base salary | Extra super: 3% rise | Extra super: 5% rise | Extra super: 10% rise |
|---|---|---|---|
| $60,000 | $216/yr | $360/yr | $720/yr |
| $80,000 | $288/yr | $480/yr | $960/yr |
| $100,000 | $360/yr | $600/yr | $1,200/yr |
| $120,000 | $432/yr | $720/yr | $1,440/yr |
| $150,000 | $540/yr | $900/yr | $1,800/yr |
As a total package, a 10% rise on $100,000 is worth $8,000 a year: $6,800 in extra take-home pay plus $1,200 in your super. Over a 30-year career, that $1,200 a year compounding inside super can dwarf the cash you spend today. When weighing an offer or counter-offer, compare the full package, not just the salary line.
Two real scenarios: $100,000 and $150,000
Scenario 1: $100,000 with a 10% rise. Your new salary is $110,000 — a gross rise of $10,000. At the 32% marginal rate (30% tax + 2% Medicare), the extra tax is $3,200, so you keep $6,800 a year — about $262 a fortnight, or roughly $131 a week. Your employer also puts an extra $1,200 into your super. See the full breakdown for this salary at what $100,000 is worth after tax.
Scenario 2: $150,000 with a 5% rise. Your new salary is $157,500 — a gross rise of $7,500. Because this rise sits in the 37% bracket, the marginal rate is 39% including Medicare: extra tax of $2,925, so you keep $4,575 a year (about $176 a fortnight), plus $900 in extra super. Note the contrast: the 10% rise at $100,000 puts $6,800 in your pocket, far more than the 5% rise at $150,000 ($4,575) — percentage and salary both matter, which is why a side-by-side table beats a single example.
Frequently Asked Questions
Will a pay rise ever leave me worse off after tax?
No. Australia uses marginal tax rates: a higher rate only ever applies to the dollars above each threshold — never your whole income. Even the part of a rise in a higher bracket still leaves you 61 cents (at 39%) or 55 cents (at 47%) of every dollar. Take-home pay always rises when salary rises; it only feels smaller if something else coincides with it, like losing a means-tested benefit or crossing a HELP repayment threshold.
What happens if my pay rise pushes me into a higher tax bracket?
Nothing dramatic. Only the dollars above the threshold are taxed at the higher rate. Say you earn $133,000 and receive a 5% rise, taking you to $139,650. The first $2,000 of the rise is taxed at 32% and the remaining $4,650 at 39% — you still keep well over half of the rise. “Moving into a higher bracket” costs you a fraction of the increase, never the whole thing.
Do I pay the 2% Medicare levy on the extra income too?
Yes — the Medicare levy is 2% of your taxable income, so it applies to the rise too. That is why this guide quotes 32% and 39% rather than 30% and 37%: the levy is baked in. If you qualify for a levy reduction or exemption, your personal after-tax figure will be a little higher.
Does a pay rise change my HECS/HELP repayments?
It can. HELP repayments are calculated on your repayment income, and the rate steps up as income rises — a pay rise can increase your compulsory repayment rate or start repayments. This guide’s figures exclude HELP repayments, so if you have a study debt, your in-hand increase will be a little lower.
Is a 5% pay rise actually a pay rise in real terms?
Only if it beats inflation. A 5% nominal rise when prices climb 3% is roughly a 2% real increase — and you only keep about 68% of the nominal rise after tax. Compare the after-tax value of your rise against the inflation rate: if it is smaller, your real standard of living has slipped even though your salary went up.
How can I check the exact numbers for my own salary?
Use our pay rise calculator: enter your current salary and the percentage on offer, and it works out your new salary, the gross rise, the tax and Medicare on the increase, and what lands in your pay packet — fortnightly, monthly and annually. It takes ten seconds and uses the same 2025–26 rates as the tables above.
The bottom line
A pay rise is always good news, but the headline percentage is never the full story. At the salaries most Australians earn, roughly two-thirds of every pay-rise dollar survives tax: 5% on $80,000 puts an extra $2,720 a year in your pocket ($105 a fortnight); 10% on $100,000 puts $6,800 there ($262 a fortnight). Higher earners keep a smaller share — the 37% bracket plus Medicare takes 39 cents of each extra dollar — plus a quiet 12% super bonus that compounds for decades.
The next time a percentage is put in front of you, don’t just nod at the gross figure. Run it through our pay rise calculator for your true after-tax number — or browse our $80,000 after-tax breakdown and $100,000 after-tax breakdown to see where every dollar goes.