Most countries use a progressive tax system, meaning higher income is taxed at higher rates. Your income is divided into brackets, and each bracket has its own tax rate.

Example: UK Income Tax 2025-2026

£0 - £12,570: 0% (Personal Allowance - tax-free)
£12,571 - £50,270: 20% (Basic Rate)
£50,271 - £125,140: 40% (Higher Rate)
Over £125,140: 45% (Additional Rate)

Example: Australia Income Tax 2024-2025

$0 - $18,200: 0% (Tax-free threshold)
$18,201 - $45,000: 19%
$45,001 - $135,000: 30%
$135,001 - $190,000: 37%
Over $190,000: 45%

Additional Deductions

Besides income tax, most countries have additional deductions:

UK: National Insurance contributions
Australia: Medicare Levy (2%)
USA: Social Security & Medicare (FICA)
New Zealand: ACC Levy

Our income tax calculator automatically calculates all these deductions for your selected country.

Frequently Asked Questions

What is an income tax calculator?

An income tax calculator is a tool that calculates how much tax you'll pay on your salary and what your take-home pay will be. It considers tax brackets, deductions, and country-specific taxes like National Insurance (UK), Medicare Levy (Australia), or Social Security (USA).

How do I calculate my income tax?

Income tax is calculated using progressive tax brackets. You pay 0% on income up to the tax-free threshold (if any), then increasing percentages on higher portions of your income. Our calculator automatically applies the correct brackets and deductions for your country.

What is the difference between gross and net salary?

Gross salary is your total earnings before any deductions. Net salary (take-home pay) is what you actually receive after income tax, social security, and other mandatory deductions are removed.

What is an effective tax rate?

Your effective tax rate is the percentage of your total income that goes to taxes. For example, if you earn £50,000 and pay £10,000 in total tax, your effective tax rate is 20%. This is usually lower than your marginal (highest bracket) tax rate.

How can I reduce my income tax?

Common ways to reduce income tax include: contributing to pension/retirement accounts (often tax-deductible), claiming work-related expenses, using tax-efficient savings accounts, and charitable donations. Tax rules vary by country.

Popular Salary Calculations

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