# PAYG calculator (tax withholding) 2026-27

Source: https://calculatax.com/tax/payg-withholding-calculator/
Title: PAYG Calculator 2026-27: Tax Withheld Per Pay | Calculatax
Last updated: 2026-11-06

This PAYG calculator shows how much tax an employer should withhold from each weekly, fortnightly or monthly pay. It uses the ATO's Schedule 1 formulas for payments made from 1 July 2026. A $1,500 weekly wage with the tax-free threshold claimed has **$299** withheld.

| Default result: $1,500 a week | Main job (threshold claimed) | Second job, $600 a week (no threshold) |
|---|---|---|
| Schedule 1 scale | Scale 2 | Scale 1 |
| Tax withheld per week | $299 | $120 |
| Tax withheld over 52 weeks | $15,548 | $6,240 |
| Share of gross pay withheld | 19.9% | 20.0% |

*2026-27 Schedule 1 formulas, resident, no study loan, no Medicare exemption. Source: ATO.*

PAYG withholding is how [income tax in Australia](https://calculatax.com/tax/) gets collected during the year. The final bill is settled when you lodge a return.

## How employers calculate tax withheld (Schedule 1: y = ax − b)

Your employer multiplies weekly earnings by a rate (a) and subtracts a fixed amount (b), both from the ATO's table for your scale. The result (y) is the tax withheld for that week.

1. **Turn the pay into a weekly figure, x.** The ATO rule is to ignore the cents and add 99 cents. For $1,500.00, x is $1,500.99.
2. **Find a and b for your scale.** On Scale 2, the row for x from $1,282 up to $2,596 uses a = 0.3227 and b = 185.1935.
3. **Work out y and round it.** 0.3227 × 1,500.99 − 185.1935 = $299.18, which becomes $299. The ATO [Schedule 1 formula rules](https://www.ato.gov.au/tax-rates-and-codes/payg-withholding-schedule-1-statement-of-formulas-for-calculating-amounts-to-be-withheld/using-a-formula) round y to the nearest dollar, and values ending in 50 cents round up.

Other pay cycles are turned into a weekly figure first.

| Pay cycle | How x is found | Withholding on the same $78,000 a year |
|---|---|---|
| Weekly, $1,500 | Ignore cents, add 99c | $299 a week |
| Fortnightly, $3,000 | Halve, ignore cents, add 99c; double the result | $598 a fortnight |
| Monthly, $6,500 | Multiply by 3, divide by 13, ignore cents, add 99c; result × 13 ÷ 3 | $1,296 a month |

*2026-27 Schedule 1, Scale 2. Source: ATO, working out the weekly earnings.*

The monthly method is easy to get wrong. $6,500 × 3 ÷ 13 is exactly $1,500 a week. That gives $299, and $299 × 13 ÷ 3 rounds to $1,296, not $299 × 4.

### Does the pay cycle change the yearly total?

Barely. Weekly gives $299 × 52 = $15,548, fortnightly gives $598 × 26 = $15,548, and monthly gives $1,296 × 12 = $15,552. Any gap comes from rounding each pay to whole dollars.

The same amounts appear row by row in the [weekly tax table](https://calculatax.com/tax/tax-tables/weekly/).

## One job or two: where to claim the tax-free threshold

Claim the $18,200 tax-free threshold with one payer only, usually the one paying the highest salary. Every other job uses Scale 1, which withholds from the first dollar.

Say you earn $1,500 a week in a main job and claim the threshold there, plus $600 a week in a second job where you don't. The main employer withholds $299 a week and the second employer $120 a week.

**Two jobs over a full year**

| Step | Working | Amount |
|---|---|---|
| Withheld by main job | $299 × 52 | +$15,548 |
| Withheld by second job | $120 × 52 | +$6,240 |
| **Total withheld** |  | **$21,788** |
| **Actual tax and Medicare levy** | On $109,200 of gross pay ($2,100 × 52) | **$25,464** |
| **Shortfall at tax time** |  | **$3,676** |

*2026-27 Schedule 1 Scales 1 and 2 against 2026-27 resident rates with the 2% Medicare levy. Source: ATO; Calculatax calculation.*

You ticked the right boxes and still owe $3,676. The second employer withholds about 20% of the $600, because Scale 1 assumes that job is your only income. In reality every dollar of it sits on top of $78,000 and is taxed at 30% plus the 2% levy.

So the second job adds $9,984 to the tax bill but has only $6,240 withheld.

> **Claiming the threshold at both jobs makes it worse.** The second employer would then withhold $42 a week, total withholding would be $17,732, and the shortfall would grow to $7,732.

## Why withholding can overshoot or fall short of your real tax

Schedule 1 treats each pay as if you earn that amount every week of the year from one source. Your actual tax is worked out on the year's real taxable income.

It falls short when income comes from several payers, as in the example above, or when you have untaxed income such as interest, rent or a side business. Bonuses and back pay taxed under Schedule 5 can also push a single pay out of line with the year's real tax.

It overshoots when you work only part of the year, take unpaid leave or have deductions. On the main job alone, $15,548 is withheld against actual tax of $15,480 on $78,000, a $68 overshoot before any deductions. The [tax return calculator](https://calculatax.com/tax-return/tax-refund-calculator/) compares a full year's withholding with the estimated bill.

## STSL, Medicare exemptions and foreign residents use different scales

The same $1,500 weekly wage gives very different withholding depending on the scale.

| Scale | Who it is for | Withheld on $1,500 a week |
|---|---|---|
| Scale 1 | Resident, tax-free threshold not claimed | $409 |
| Scale 2 | Resident, tax-free threshold claimed | $299 |
| Scale 3 | Foreign resident | $450 |
| Scale 4 | No tax file number provided (resident) | $705 (47%) |
| Scale 5 | Full Medicare levy exemption | $269 |
| Scale 6 | Half Medicare levy exemption | $284 |

*2026-27 Schedule 1 formulas, weekly. Scale 4 for foreign residents is 45%. Source: ATO.*

### How a study loan changes withholding

A study or training support loan (STSL) adds a separate component from Schedule 8. With the threshold claimed, nothing is added until x reaches $1,337 a week, and on $1,500 the extra is $25 a week. Without the threshold, the component starts at $987 a week.

That design can leave a HELP debt badly under-collected. The $600 second job in the example is below $987, so it attracts no study loan component. Over the year $1,300 is withheld for the debt, yet the compulsory repayment on $109,200 is $5,950.80.

## Asking your employer to withhold extra tax

You can ask an employer in writing to withhold more than the Schedule 1 amount.

In the two-job example, an extra $71 a week from the second job would cover the $3,676 income tax shortfall. Covering the HELP gap as well would take about $89 a week more, since $4,650.80 is unpaid over 52 weeks.

It works the other way too. If large deductions mean too much is withheld, you can apply to the ATO for a withholding variation to reduce it. An employer can't lower withholding on its own.

- [Income tax calculator](https://calculatax.com/tax/income-tax-calculator/): The annual bill to aim for.
- [Marginal tax rate calculator](https://calculatax.com/tax/marginal-tax-rate-calculator/): The rate on extra income.
- [Australian tax brackets](https://calculatax.com/tax/tax-brackets/): The 2026-27 rates.
- [ATO tax tables](https://calculatax.com/tax/tax-tables/): Employers' full row-by-row amounts.

## What the calculator leaves out

The calculator handles regular pay only. Bonuses, back pay and commissions use Schedule 5, and lump sums on termination have separate rules.

It doesn't model the Medicare levy surcharge, salary sacrifice arrangements or tax offsets. It assumes the same gross pay every period, so overtime or irregular hours change each week's figure.

## PAYG questions: tax withheld, payment summaries, Schedule 5 and instalments

### What is PAYG?

PAYG stands for pay as you go. Under PAYG withholding, employers deduct tax from each pay and send it to the ATO, so your income tax is collected through the year. For 2026-27 they use the Schedule 1 formulas. A resident on $1,500 a week who claims the tax-free threshold has $299 withheld each week.

### What does tax withheld mean?

It's the amount your employer keeps back from gross pay and sends to the ATO for you. Think of it as a prepayment, because your final tax is assessed later and the amount withheld is credited against it at year end. On $1,500 a week, $15,548 is withheld over a year, against a resident's actual tax of $15,480.

### What is a PAYG payment summary?

It's the paper or PDF statement employers once issued showing a year's pay and tax withheld. Most employers now report through Single Touch Payroll instead. The same figures appear as an income statement in ATO online services, marked "tax ready" once the employer finalises it for the year.

### What is PAYG on Schedule 5?

Schedule 5 is the ATO tax table for back payments, commissions, bonuses and similar payments. Method A spreads the extra payment across the year's pay periods. Method B(i) covers back pay for specific current-year periods, and Method B(ii) covers prior-year back pay and payments not tied to one period. Regular wages stay on Schedule 1.

### What is a PAYG income tax instalment?

It's a prepayment of tax on business or investment income that has no employer withholding. The ATO enters you in the system based on your last return and issues instalment notices, usually quarterly. Instalments are credited against your assessed tax, the same way withheld amounts are for wages.

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

## Sources

- [ATO: Schedule 1: coefficients for weekly payments](https://www.ato.gov.au/tax-rates-and-codes/payg-withholding-schedule-1-statement-of-formulas-for-calculating-amounts-to-be-withheld/coefficients-to-use-in-formulas-for-withholding-from-weekly-payments)
- [ATO: Schedule 1: working out the weekly earnings](https://www.ato.gov.au/tax-rates-and-codes/payg-withholding-schedule-1-statement-of-formulas-for-calculating-amounts-to-be-withheld/working-out-the-weekly-earnings)
- [ATO: Schedule 8: study and training support loan components](https://www.ato.gov.au/tax-rates-and-codes/schedule-8-statement-of-formulas-for-calculating-study-and-training-support-loans-components)
- [ATO: Schedule 5: back payments, commissions, bonuses and similar payments](https://www.ato.gov.au/tax-rates-and-codes/schedule-5-tax-table-for-back-payments-commissions-bonuses-and-similar-payments/working-out-the-withholding-amount)
- [ATO: Schedule 1: using a formula](https://www.ato.gov.au/tax-rates-and-codes/payg-withholding-schedule-1-statement-of-formulas-for-calculating-amounts-to-be-withheld/using-a-formula)