Bonus Tax Calculator Australia
The tax you actually owe on a bonus or commission for 2026-27, not the payday guess. Built on ATO Schedule 5 (NAT 3348) and the current marginal rates.
Bonus Tax Calculator 2026-27
Does Schedule 5 Even Apply to Your Bonus?
The rule most bonus calculators get wrong, straight from the first page of the ATO schedule.
ATO Schedule 5 (NAT 3348) does not apply to every bonus. If your bonus relates to work performed in a single pay period, your employer must not use it. The bonus is added to your other taxable earnings for that period and withheld using the regular tax table. Schedule 5 applies only when the payment relates to more than one pay period, or to an undefined period.
Most calculators apply an averaging method to every bonus they see. That changes the answer. A monthly sales commission for one month of work is taxed with the ordinary monthly table, while an annual performance bonus is spread across the year under Schedule 5.
| Your payment | Which table applies | What that means |
|---|---|---|
| Bonus for work in a single pay period | Regular | Added to normal earnings for the period, withheld with the standard PAYG table |
| Bonus for more than one pay period (quarterly, annual) | Schedule 5 | Spread over the pay periods in the year under Method A or Method B, capped at 47% |
| Bonus for an undefined period (discretionary, retention) | Schedule 5 | Treated the same way as a multi-period payment |
| Back pay for earlier periods | Schedule 5 | Method B applies, see the backpay calculator |
Source: ATO Schedule 5 (NAT 3348), published 17 June 2026, applies to payments made from 1 July 2026.
How Is Tax on a Bonus Calculated?
Method A, the approach most payroll systems use, condensed from the ATO’s ten steps.
Your employer does not apply a flat bonus rate. Under Method A they divide the bonus by the number of pay periods in the year (52 weekly, 26 fortnightly, 12 monthly), add that slice to your normal pay, and read off how much the withholding rises. That rise, multiplied back out by the number of periods, is the withholding on your bonus, capped at 47% of the payment.
| Step | What your employer does |
|---|---|
| 1 | Take your gross earnings for the current pay period, excluding the bonus. Ignore cents. |
| 2 | Look up the normal withholding on that amount. |
| 3 | Divide the bonus by the pay periods in the financial year (52 / 26 / 12). Ignore cents. |
| 4 | Add that slice to the step 1 earnings. |
| 5 | Look up the withholding on the combined amount. |
| 6 | Subtract step 2 from step 5. This is the extra withholding per period. |
| 7 | Multiply by the number of periods used at step 3. |
| 8 | Work out 47% of the bonus. |
| 9 | Withhold the lesser of step 7 and step 8. |
| 10 | Total PAYG for the period is step 9 plus the normal step 2 amount. |
Condensed from ATO Schedule 5 (NAT 3348), Method A. If the bonus covers a defined period under 12 months, step 3 can divide by the periods it actually relates to. A negative result is treated as nil.
Method B exists as an alternative. Method B(i) recalculates each affected period for back payments within the year, and Method B(ii) averages year-to-date earnings. Both are acceptable to the ATO, and B(ii) usually lands closer to your final tax. If you have a HECS-HELP debt, the study loan component is worked out with the same method and combined with the tax before the 47% cap is tested.
What Does Method A Look Like on a Real Bonus?
A $10,000 annual bonus, $90,000 salary, paid monthly, 2026-27 resident rates.
| Step | Calculation | Amount |
|---|---|---|
| 1 | Monthly gross, excluding the bonus | $7,500 |
| 2 | Normal monthly withholding | $1,610 |
| 3 | Bonus spread over 12 months ($10,000 ÷ 12) | $833 |
| 4 | Step 1 plus step 3 | $8,333 |
| 5 | Withholding on the combined amount | $1,877 |
| 6 | Extra withholding per month (step 5 minus step 2) | $267 |
| 7 | Extra withholding annualised (step 6 × 12) | $3,199 |
| 8 | Cap check: 47% of the bonus | $4,700 |
| 9 | Withheld from the bonus (lesser of steps 7 and 8) | $3,199 |
Withholding estimated from this site’s annualised 2026-27 engine rather than the printed ATO monthly withholding table, so payroll figures will differ by a few dollars of rounding. The method and the cap are as published in Schedule 5.
Notice where it lands. Method A withholds about $3,199, and the tax actually owed on this bonus across the year is $3,200. On a steady salary the two sit close together. The gap widens when your pay varies, when the bonus lands late in the year, or when the 47% cap bites.
How Much Tax on Common Bonus Amounts?
Tax actually owed on the bonus across 2026-27, on a $90,000 salary. Resident rates, no HECS-HELP.
| Bonus | Extra income tax | Extra Medicare levy | Total tax on the bonus | You keep | Effective rate |
|---|---|---|---|---|---|
| $1,000 | $300 | $20 | $320 | $680 | 32% |
| $2,000 | $600 | $40 | $640 | $1,360 | 32% |
| $5,000 | $1,500 | $100 | $1,600 | $3,400 | 32% |
| $10,000 | $3,000 | $200 | $3,200 | $6,800 | 32% |
| $15,000 | $4,500 | $300 | $4,800 | $10,200 | 32% |
| $20,000 | $6,000 | $400 | $6,400 | $13,600 | 32% |
| $30,000 | $9,000 | $600 | $9,600 | $20,400 | 32% |
| $50,000 | $15,350 | $1,000 | $16,350 | $33,650 | 32.7% |
Computed from the 2026-27 resident rates and 2% Medicare levy. On $90,000 your marginal rate is 30%, so most bonus sizes lose 32c per dollar. The $50,000 row crosses into the 37% bracket at $135,000, which lifts the effective rate.
How Does the Same Bonus Change With Salary?
A $10,000 bonus at six salary levels, 2026-27 resident rates, no HECS-HELP.
| Salary | Tax on a $10,000 bonus | You keep | Effective rate on the bonus |
|---|---|---|---|
| $50,000 | $3,350 | $6,650 | 33.5% |
| $70,000 | $3,200 | $6,800 | 32% |
| $90,000 | $3,200 | $6,800 | 32% |
| $120,000 | $3,200 | $6,800 | 32% |
| $150,000 | $3,900 | $6,100 | 39% |
| $200,000 | $4,700 | $5,300 | 47% |
The bonus is taxed at your marginal rate plus the 2% Medicare levy, and the low income tax offset taper adds a little below $66,667. At $200,000 the rate reaches 47c per dollar, which is exactly where the Schedule 5 withholding cap sits.
What Is the 47% Withholding Cap?
The most an employer can withhold from an additional payment.
Under Method A and Method B(ii), withholding on a bonus is capped at 47% of that payment. The cap applies to the additional payment only, never to your normal earnings for the period. It exists because annualising a large one-off payment can overstate the tax, and the ATO does not want half your bonus withheld on a bad estimate.
The 47% figure is not arbitrary. It matches the top 2026-27 marginal rate of 45% plus the 2% Medicare levy. If your salary already sits above $190,000, a bonus genuinely costs 47c per dollar, and the cap changes nothing. Below that, the cap is a ceiling you should rarely hit on a correctly calculated bonus.
Two details worth knowing. Method B(i), used for back payments to specific periods in the current year, has no cap at all. And if you have a study loan, the HECS-HELP component is combined with the tax component before the cap is tested, so the cap covers the lot. If your payslip shows more than 47% gone from the bonus itself, ask payroll to show their Schedule 5 working.
Why Is the Payday Amount Different From What You Owe?
Withheld and owed are two different numbers. Most bonus anger lives in the gap.
Withholding is the estimate your employer makes on payday. Tax is what you actually owe on your total income when the year is assessed. Schedule 5 is a withholding schedule, so the amount that vanishes from your bonus payslip is a prepayment, not a verdict.
The calculator at the top of this page shows the owed figure: the real tax cost of your bonus across 2026-27. If your employer’s Schedule 5 estimate withheld more than that, the difference comes back as part of your refund after you lodge. If it withheld less, the shortfall reduces your refund or adds to your bill. Nothing about the bonus itself is taxed twice, and none of it is taxed at a secret higher rate.
Bonus or Pay Rise: What Is the Difference for Tax?
$10,000 as a one-off bonus versus $10,000 as a permanent rise, on a $90,000 salary.
| $10,000 bonus | $10,000 pay rise | |
|---|---|---|
| Tax owed this year | $3,200 | $3,200 |
| You keep this year | $6,800 | $6,800 |
| Payday withholding | Schedule 5, capped at 47% of the payment | Regular tax table on the new salary |
| Repeats next year | No, one-off | Yes, every year |
Same year-one tax either way, because both are ordinary income at the same marginal rates. The difference is durability, and how the withholding is estimated. The pay rise calculator covers the recurring case.
Who Uses This Bonus Tax Calculator?
The situations this page is built to answer.
The annual bonus earner
A performance bonus lands once a year
- Bonus covers 12 months, so Schedule 5 applies
- Wants the real tax cost, not the payday shock
- Checks the refund position before spending it
The commission earner
Sales pay that arrives in lumps
- Single-period commissions use the regular table
- Multi-period commissions fall under Schedule 5
- Big months can trigger heavy withholding that returns later
The HECS-HELP holder
A bonus while repaying a study loan
- Loan component uses the same Schedule 5 method
- Combined with tax before the 47% cap test
- Repayment income above $69,528 (2026-27) triggers it
The payslip checker
The bonus line looks wrong
- Verifies the employer’s working against Method A
- Checks whether the 47% cap was applied
- Knows single-period bonuses should not be averaged
What Changed for Bonuses on 1 July 2026?
The 2026-27 updates that touch bonus withholding.
| Change | 2026-27 position | Effect on your bonus |
|---|---|---|
| Schedule 5 reissued | NAT 3348 published 17 June 2026, applies to payments from 1 July 2026 | The methods and the 47% cap are confirmed current, not carried forward |
| First marginal rate | Cut from 16% to 15% | Slightly lower withholding for incomes in the $18,201 to $45,000 band |
| HECS-HELP threshold | Indexed to $69,528, marginal system | The loan slice of bonus withholding starts later and scales per dollar |
| Withholding cap | Unchanged at 47% | Still matches the top rate of 45% plus the 2% Medicare levy |
Sources: ATO Schedule 5 (NAT 3348), ATO individual income tax rates 2026-27, ATO study and training loan thresholds.
Common Mistakes With Bonus Tax
The errors that generate most of the confusion, and most of the bad maths online.
Treating withholding as final tax
The number on the payslip is an estimate
- Schedule 5 estimates, assessment decides
- Over-withholding returns as refund
- Judge the bonus by the annual figure above
Averaging a single-period bonus
The scope rule exists for a reason
- One pay period of work means the regular table
- Schedule 5 is for multi-period payments only
- Wrong table, wrong payday number
Believing in a flat bonus rate
There is no such rate in the law
- Bonuses are ordinary income
- Marginal rates of 15% to 45% apply, plus Medicare
- The 47% figure is a withholding cap, not a rate
Forgetting the study loan slice
HECS-HELP rides along with the tax
- Same method, combined before the cap
- Applies above $69,528 (2026-27)
- Makes the payday deduction look larger than tax alone
Bonus Tax FAQ
Common questions about tax on bonuses and commissions in Australia.
Where These Figures Come From
Every rate-bearing claim on this page traces to a published document.
- ATO, Schedule 5: Tax table for back payments, commissions, bonuses and similar payments (NAT 3348, QC107123), published 17 June 2026, applies to payments made from 1 July 2026.
- ATO, individual income tax rates 2026-27 (resident scale with the 15% first marginal rate).
- ATO, Medicare levy (2% of taxable income for most residents).
- ATO and StudyAssist, study and training loan repayment thresholds 2026-27 ($69,528 threshold, marginal system).
Tables on this page are computed from this site’s 2026-27 tax engine at render time, so a rate change updates every figure at once. See the methodology page for how figures are verified. Last verified 23 July 2026.