Australian tax and pay glossary

ABN (Australian Business Number)

The identifying number a business uses when it deals with the ATO and other government agencies. You need an ABN before you can register for GST, and it has to appear on your tax invoices, as set out under GST in Australia.

Accrual reporting

A way of reporting GST in the period you issue or receive an invoice, or in the period of payment if that comes first. The ATO calls it the non-cash basis. The BAS calculator works on whichever basis your business uses.

Age Pension age

The age from which you may qualify for the Age Pension: 67 or older, and Services Australia says there are no plans to change it. Reaching it is also one way to meet the age condition for the seniors and pensioners tax offset, worked out in the SAPTO calculator.

Annual Wage Review

The Fair Work Commission's yearly review of minimum pay. Its 2026 decision, announced on 2 June 2026, set the national minimum wage at $26.44 an hour. Modern award minimum wages rose 4.75% from 1 July 2026.

Assessable income

All the income the tax law counts before deductions, such as salary and wages, interest, dividends, rent and business income. Take away your allowable deductions and you get taxable income, the figure used in the income tax calculator.

Average tax rate

Total tax divided by total income, shown as a percentage. On a $78,000 salary in 2026-27, income tax plus the Medicare levy comes to $15,480, an average rate of 19.85%. That's well below the 30% marginal tax rate at that income.

AWOTE (average weekly ordinary time earnings)

An ABS measure of average weekly pay for ordinary hours, leaving out overtime. For full-time adults it was $2,083.70 a week in May 2026, seasonally adjusted, in the ABS Average Weekly Earnings release (opens in a new tab). That's about $108,352 a year, and the average wage in Australia page covers this and other ABS measures.

BAS (Business Activity Statement)

The form a GST-registered business lodges with the ATO to report and pay GST, plus other amounts such as PAYG withholding and PAYG instalments. Its GST section is the amount at label 1A minus label 1B, which the BAS calculator works out.

BAS labels G1, 1A and 1B

The three GST labels most small businesses fill in. The BAS calculator shows each one for a sample quarter.

Base amount

The fixed tax owed at the bottom of a tax bracket, before that bracket's own rate applies. The 2026-27 resident base amounts are $4,020 at $45,000, $31,020 at $135,000 and $51,370 at $190,000, as listed in the tax brackets table.

Bonus withholding (Schedule 5)

The ATO method for withholding tax from bonuses, commissions and back payments, set out in Schedule 5, its tax table for those payments. Method A spreads the payment across the year's pay periods. The bonus tax calculator estimates the tax withheld on a bonus.

Bring-forward arrangement

A rule that allows up to three years of non-concessional super contributions to go in at once. Your limit for 2026-27 depends on your total super balance on 30 June 2026.

Cash reporting

A way of reporting GST in the period you actually receive or make a payment. Businesses with aggregated turnover under $10 million can choose it, and some other groups qualify too. The BAS calculator accepts figures on either basis.

Casual loading

An extra 25% on a casual employee's hourly rate, paid because casuals don't get entitlements such as paid leave. A casual on the national minimum wage gets at least $33.05 an hour from 1 July 2026. The penalty rates calculator applies loadings to an hourly rate.

Co-contribution

A government payment into your super that matches personal after-tax contributions at 50c per $1, up to $500. In 2026-27, the full amount is available on income up to $49,293, falling to nil at $64,293. The co-contribution calculator works out your entitlement.

Concessional contributions

Super contributions made from before-tax income: employer super guarantee, salary sacrifice and personal contributions you claim as a deduction. The cap is $32,500 in 2026-27, up from $30,000. The salary sacrifice calculator shows how contributions count toward it.

Deduction

An amount you subtract from assessable income to reach taxable income, such as a work-related expense. A deduction saves tax at your marginal rate, so $500 of deductions saves $150 of income tax at a 30% rate. The tax deductions guide covers what you can claim.

Division 293 tax

An extra 15% tax on some or all concessional super contributions if your income plus those contributions is more than $250,000. The threshold hasn't changed since 2017-18. The Division 293 tax calculator estimates the extra tax.

Effective tax-free threshold

The income up to which a resident pays no income tax once the low income tax offset is applied: $22,866 in 2026-27. The method is $18,200 plus $700 ÷ 0.15. The Medicare levy is separate, and the low income tax offset page shows the full phase-out.

Financial year

The 12-month tax year in Australia, running from 1 July to 30 June. The 2026-27 financial year, also called the income year, runs from 1 July 2026 to 30 June 2027. Rates in the income tax calculator are set for that year.

Foreign resident

A person who isn't an Australian resident for tax purposes. Foreign residents pay 30% from the first dollar up to $135,000, get no tax-free threshold and pay no Medicare levy. The foreign resident tax calculator applies these rates.

General transfer balance cap

The limit on how much super you can move into retirement-phase income streams, such as an account-based pension. It's $2.1 million in 2026-27, up from $2.0 million. The retirement income calculator models drawing an income from super.

GST (Goods and Services Tax)

A 10% tax on most goods, services and other items sold or consumed in Australia. Registered businesses add it to their prices and pass it to the ATO. The GST in Australia hub covers registration, GST-free items and reporting.

GST credit

The GST included in a business purchase, which a registered business claims back from the ATO. It's usually one-eleventh of the GST-inclusive price. Credits are reported at label 1B, as in the BAS calculator.

GST-exclusive price

A price before GST is added. Multiply it by 1.1 to get the GST-inclusive price, so $480 becomes $528. The GST calculator converts in either direction.

GST-free

A sale that carries no GST, where the seller can still claim GST credits on related purchases. Most basic food, exports and most education and health services are GST-free. The difference from input-taxed sales is set out under GST in Australia.

GST-inclusive price

A price that already includes GST, such as a shelf price. The GST inside it is one-eleventh of the price, so a $1,320 total contains $120 of GST. The GST calculator removes GST from any total.

GST turnover

A business's gross income, minus GST. You must register for GST once it reaches $75,000, or $150,000 for a non-profit, and taxi and ride-sourcing drivers must register whatever their turnover. Registration rules are under GST in Australia.

HECS-HELP

The HELP loan that covers the student contribution for a Commonwealth supported place. You repay it through the tax system on the same thresholds as other study loans, shown in the HECS-HELP repayment calculator.

HELP (Higher Education Loan Program)

The government loan scheme for tertiary study, including HECS-HELP and FEE-HELP. In 2026-27, you repay nothing until your repayment income passes $69,528. The HECS-HELP repayment calculator estimates the compulsory repayment.

HELP 20% reduction

A one-off cut of 20% to study and training loan debts held on 1 June 2025. It was applied before that year's indexation, and the ATO says it has finished processing it. The HECS repayment thresholds page covers the current bands.

HELP indexation

The yearly increase on 1 June to the part of your study loan that's been unpaid for more than 11 months. The rate was 2.8% on 1 June 2026, after 3.2% in 2025. Repayment thresholds are indexed separately, to average weekly earnings, as the HECS repayment thresholds show.

Income tax

The tax on your taxable income, charged at rising rates across brackets. The income tax calculator applies them, using the ATO tax rates for Australian residents (opens in a new tab).

Input-taxed supply

A sale that carries no GST, where the seller also can't claim GST credits on related purchases. Residential rent and financial supplies are input-taxed. How this differs from GST-free sales is explained under GST in Australia.

LISTO (low income super tax offset)

A government payment into your super of up to $500 if your adjusted taxable income is up to $37,000. It refunds tax your fund pays on your concessional contributions. The super calculator shows how contributions build a balance.

LITO (low income tax offset)

A tax offset of up to $700 for residents with taxable income of $37,500 or less. It falls by 5c per $1 to $325 at $45,000, then by 1.5c per $1 to nil at $66,667. The low income tax offset page shows the full phase-out.

Low-income thresholds (Medicare levy)

The income levels below which you don't pay the Medicare levy: $28,011 for singles and $47,238 for families, plus $4,338 per child. These are the 2025-26 figures, the latest announced, on the ATO Medicare levy reduction for low-income earners (opens in a new tab) page.

The 2026-27 figures aren't out yet, and they're normally set in the following May Budget. The Medicare levy calculator uses the latest values.

Margin scheme

A GST method for some property sales, where GST is worked out on the margin instead of the full sale price. The GST calculator doesn't apply it, because it assumes GST on the whole amount.

Marginal tax rate

The rate of tax on your next dollar of income. Between $37,501 and $45,000, the 15% rate plus the 5c LITO phase-out gives 20%, or 22% with the Medicare levy. The marginal tax rate calculator includes those effects.

Maximum super contribution base

The annual earnings limit above which an employer doesn't have to pay the minimum super guarantee. Under Payday Super it's $270,830 a year in 2026-27, replacing the old quarterly limit. The super guarantee calculator applies the cap.

Median weekly earnings

The middle value of weekly pay in a main job, so half of employees earn more and half earn less. In August 2025 the ABS Employee Earnings release (opens in a new tab) put it at $1,425 for all employees and $1,741 for full-time employees. The average wage in Australia page explains how median and average pay differ.

Medicare levy

A levy of 2% of taxable income that helps fund Medicare. People on low incomes pay less or nothing, through the shade-in rule. The Medicare levy calculator works it out with the shade-in applied.

Medicare levy surcharge (MLS)

An extra 1%, 1.25% or 1.5% charged if you don't have appropriate private hospital cover and your income passes a threshold. In 2026-27 it starts above $105,000 for singles and $210,000 for families. The Medicare levy surcharge calculator shows your tier.

Minimum wage

The lowest pay rate for an adult employee who isn't covered by an award or enterprise agreement. From 1 July 2026 the national minimum wage is $26.44 an hour, or $1,004.90 for a 38-hour week, according to the Fair Work Ombudsman minimum wage media release (opens in a new tab). The hourly rates section covers take-home pay at common hourly rates.

Monthly withholding

The way Schedule 1 handles monthly pay. Monthly earnings are multiplied by 3 and divided by 13 to get a weekly figure, and the weekly withholding is multiplied by 13 and divided by 3. The monthly tax table shows the results.

myTax

The ATO's online service for preparing and lodging your own tax return, reached through myGov. Much of your income data is pre-filled from employers, banks and others. The tax refund calculator estimates the result before you lodge.

Net GST payable

The GST a business owes for a period after subtracting its GST credits, which is label 1A minus label 1B on the BAS. If credits are larger, the ATO refunds the difference. The BAS calculator works out either result.

Nil BAS

A BAS you lodge when you've got nothing to report for the period. You still have to lodge it by the due date, even with no sales or purchases. The BAS calculator covers periods with activity.

Non-concessional contributions

Super contributions made from after-tax money that you don't claim as a deduction. The cap is $130,000 in 2026-27, up from $120,000, and drops to nil once your total super balance is $2.1 million or more. The super calculator projects their effect.

Notice of assessment

The statement the ATO issues after processing your tax return. It shows the tax on your taxable income, your offsets and credits, and any refund or amount owing. A tax refund calculator estimate can differ from it.

Ordinary time earnings (OTE)

The pay for ordinary hours that super guarantee used to be calculated on. From 1 July 2026, Payday Super replaced it with qualifying earnings. The super guarantee rate page covers the current rate.

PAYG instalments

Regular prepayments of the expected tax on your business and investment income, so it isn't all due after the year ends. They often appear on the same BAS as GST, and the final tax is settled on your tax return. The tax return guide covers how they're credited.

PAYG withholding

The tax an employer withholds from each pay and sends to the ATO, worked out with the ATO Schedule 1 formulas. It's credited against your tax when you lodge a return. The PAYG withholding calculator uses the 2026-27 schedule.

Payday Super

The rule from 1 July 2026 that employers pay super guarantee each payday, calculated on qualifying earnings. Contributions are due in your fund within 7 business days after payday, and longer timeframes can apply in some cases, such as new employees. The super guarantee calculator applies the new rules.

Payment reference number (PRN)

The number the ATO uses to match a payment to your account. You quote it when you pay a BAS or other tax debt. The BAS calculator works out the GST part of that payment.

Penalty rates

Higher pay rates under an award or agreement for work at certain times, such as evenings, weekends or public holidays. The rate depends on the award. The penalty rates calculator works out pay at a given penalty rate.

Preservation age

The age from which you can usually access super once you retire. It's 60 if you were born from 1 July 1964, and it ranged from 55 to 60 for earlier birth dates. The retirement income calculator models income after you stop work.

Pro rata salary

A full-time salary scaled down to the hours or part of the year actually worked. On 3 days a week, you'd earn three-fifths of a 5-day full-time salary. The pro rata salary calculator works it out.

Qualifying earnings

The pay that super guarantee is calculated on from 1 July 2026, replacing ordinary time earnings under Payday Super. Employers pay 12% of it. The super guarantee calculator uses this base.

Rebate income

The income measure used to work out SAPTO. It's your taxable income plus some additions, such as reportable super contributions and net investment losses. SAPTO falls by 12.5c per $1 of rebate income above the shade-out point, as the SAPTO calculator shows.

Registered tax agent

A tax professional registered with the Tax Practitioners Board. If you use one, you may get a later lodgment date than if you lodge yourself. The tax return guide covers when to lodge.

Repayment income

The income used to work out a compulsory study loan repayment. It's your taxable income plus reportable fringe benefits, net investment losses, reportable super contributions and exempt foreign employment income. The HECS-HELP repayment calculator applies the 2026-27 bands to it.

Resident for tax purposes

A person who meets the ATO's residency tests, which are separate from visa or citizenship status. Full-year residents get the $18,200 tax-free threshold and pay the Medicare levy. The income tax calculator assumes residency for the full year.

Salary sacrifice

An arrangement where part of your pre-tax salary goes straight into super. It counts toward the $32,500 concessional contributions cap in 2026-27. The salary sacrifice super calculator shows the effect on take-home pay.

SAPTO (seniors and pensioners tax offset)

A tax offset for eligible people of Age Pension age, and for some veterans. Singles get up to $2,230, shading out from $34,919 of rebate income and reaching nil at $52,759. These are the 2025-26 figures on the ATO seniors and pensioners tax offset (opens in a new tab) page.

The ATO hasn't published a 2026-27 table yet. The SAPTO calculator uses the 2025-26 figures until it does.

Schedule 1

The ATO statement of formulas employers use to work out PAYG withholding, in the form y = ax − b. The current version applies to payments made from 1 July 2026. The weekly tax table is built from it.

Schedule 8

The ATO formulas for the extra amount withheld from pay for study and training loans. It uses the same y = ax − b form as Schedule 1 and applies to payments from 1 July 2026. The HECS-HELP repayment calculator covers the annual repayment.

Shade-in (Medicare levy)

The rule that phases the Medicare levy in for people just above the low-income threshold. The levy is capped at 10c for each $1 above the threshold until it reaches the full 2%. The Medicare levy calculator applies it.

Standard deduction for work-related expenses

A deduction of up to $1,000 for work-related expenses with no receipts needed, available from the 2026-27 income year. Schedule 4 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 made it law. The tax deductions guide explains who can use it.

STSL (study and training support loans)

The ATO's umbrella term for HELP, VET Student Loans, Australian Apprenticeship Support Loans, Student Start-up Loans and SFSS debts. You repay them through the tax system. The HECS-HELP repayment calculator estimates the yearly repayment.

Super guarantee (SG)

The minimum super an employer must pay for eligible employees: 12% of qualifying earnings in 2026-27. Under Payday Super it's paid with each pay. The super guarantee calculator works out the amount.

Superannuation

Australia's retirement savings system, funded by employer contributions, personal contributions and investment returns. You can usually access it once you reach preservation age and retire. The superannuation hub lists the super calculators.

Take-home pay

The pay you receive after tax and other amounts are withheld. A $78,000 salary leaves $62,520 a year after income tax and the Medicare levy in 2026-27. The salary after tax table lists take-home pay by salary.

Tax bracket

An income range taxed at one marginal rate. Residents have five brackets in 2026-27, from nil up to $18,200 to 45% above $190,000. The tax brackets page sets out each one.

Tax file number (TFN)

Your personal reference number in the tax system. If you don't give it to an employer, tax is withheld at 47% of every $1 for residents, or 45% for foreign residents. The PAYG withholding calculator works out withholding on regular pay.

Tax-free threshold

The first $18,200 of a resident's taxable income, on which no income tax is charged. You generally claim it from only one payer at a time. The income tax calculator applies it automatically for residents.

Tax invoice

The document you need to claim a GST credit on a purchase that costs more than $82.50 including GST. It shows the seller's identity and ABN, the date, what was sold and the GST. Enter only claimable purchases in the BAS calculator.

Tax offset

An amount that reduces the tax you pay dollar for dollar, where a deduction reduces your taxable income. LITO and SAPTO are offsets, and they can't create a refund on their own. The tax offsets page lists the main ones.

Tax refund

The amount the ATO pays back when more tax was withheld during the year than you owe. It's shown on your notice of assessment. The tax refund calculator estimates it from your income and tax withheld.

Tax return

The yearly statement of income, deductions and offsets you lodge with the ATO. Lodgment opens on 1 July and self-lodgers are due by 31 October, though for 2025-26 returns that date moved to Monday 2 November 2026. The tax return guide covers the process.

Taxable income

Assessable income minus allowable deductions. It's the figure the income tax rates, LITO and the Medicare levy are applied to. The income tax calculator starts from taxable income.

Total superannuation balance (TSB)

The total value of all your super interests at 30 June. It decides your non-concessional cap and bring-forward limit for the next year. The super balance by age page shows typical balances.

WATO (working Australians tax offset)

A non-refundable offset of up to $250 a year for residents with net labour income above the tax-free threshold. It starts in 2027-28 and doesn't apply to 2026-27. The tax offsets page lists the offsets that apply now.

Withholding scale

The set of Schedule 1 coefficients an employer uses for your situation. Scale 2 applies when you claim the tax-free threshold, Scale 1 when you don't, and Scale 3 for foreign residents. The tax tables section is built from these formulas.

Work-related expenses

Costs you pay to earn your employment income, such as tools, uniforms or travel between work sites. From 2026-27 you can claim actual costs or the $1,000 standard deduction. The tax deductions guide covers the rules.

Working from home fixed rate

An ATO rate for each hour you work from home, covering running costs such as energy, internet and phone. It's 70c (2025-26 rate), the latest stated on the ATO working from home fixed rate method (opens in a new tab) page. The ATO hasn't stated a 2026-27 rate yet, and the work from home deduction calculator applies this one.

Working holiday maker

A visitor on a working holiday visa who earns income in Australia. In 2026-27 they pay 15% on income up to $45,000, then higher rates. The working holiday maker tax calculator applies the full scale.

Year-to-date (YTD) income

Your earnings from 1 July to the latest payday, as shown on a payslip. Scale it up and you get an estimate of annual income for tax. The YTD income calculator projects the full-year figure.

Estimates only, based on published rates for 2026-27. General information, not tax or financial advice.