Tax on $120k salary Australia: what you actually take home

What the tax on $120k salary Australia looks like in 2026–27

If you’re reading a job ad that says $120,000 a year, the first question is usually: how much of that lands in your bank account? The tax on $120k salary Australia for the 2026–27 financial year is straightforward once you know the rates. For an Australian resident who claims the tax-free threshold, the first $18,200 is tax-free. Then you pay 15 cents for every dollar between $18,201 and $45,000, and 30 cents for every dollar from $45,001 to $135,000. On top of that, most people pay the Medicare levy of 2%.

Let’s do the maths. On $120,000:

• Tax on the first $18,200: $0
• Tax on $18,201 to $45,000 ($26,800): $4,020
• Tax on $45,001 to $120,000 ($75,000): $22,500
• Income tax subtotal: $26,520
• Medicare levy (2% of $120,000): $2,400
• Total tax and levy: $28,920
• Take-home pay: $91,080

That’s your net annual income if you have no other deductions, no HELP debt, and no Medicare levy surcharge. The Australian Taxation Office (ATO) publishes these rates, and they are confirmed by.au. Remember, the Medicare levy is separate from the Medicare levy surcharge, which applies if you don’t have appropriate private hospital cover and earn above a threshold (for singles, above $93,000 in 2026–27). At $120k you may be liable for the surcharge, which adds 1% to 1.5% of your taxable income. That’s not included in the basic calculation above.

Where $120k sits on the Salary Index

The Salary Index benchmarks your gross annual salary against the national full-time adult ordinary-time earnings. The latest ABS Average Weekly Earnings (May 2026) put the national line at $2,083.70 per week, annualised to $108,352. That’s index 100. A $120,000 salary gives an index of about 110.7 – meaning you earn roughly 10.7% more than the typical full-time worker.

To put that in perspective, the national minimum wage from 1 July 2026 is $26.44 per hour, or $52,255 annualised, which is index 48.2. So $120k is more than double the minimum. But it’s below the average for some industries: Mining sits at index 154.7, and Professional, scientific and technical services at 114.7. It’s above the average for Retail trade (75.9) and Accommodation and food services (72.5). If you’re comparing offers across states, note that the ACT has the highest average index at 109.9, followed by WA at 106.9. A $120k offer in Tasmania (state index 88.6) would be well above the local average, while in the ACT it’s only slightly above.

Using the tax breakdown to compare job offers

When you see a salary in a job ad, the gross figure is only part of the story. The tax on $120k salary Australia reduces it to about $91k take-home, but other factors matter too. Does the employer pay super on top? The super guarantee is 12% from 1 July 2026, so a $120k salary plus super means an extra $14,400 into your super account. Some ads quote a total package including super – always check.

Also consider whether you’re covered by a modern award. Awards set minimum pay rates and classifications. For example, the entry-level award floor is $25.74 per hour. If your role is covered by an award, the employer must pay at least the award rate, which may be higher than the national minimum. The $120k figure is well above most award rates, but if you’re in a management or professional role, you’re likely on an award-free individual agreement.

Another factor: salary packaging. If your employer offers salary sacrifice for items like a car or super contributions, your taxable income drops, which reduces the tax on $120k salary Australia. But that’s a personal choice – the basic calculation above assumes no packaging.

How to read your pay slip and tax withheld

Your employer withholds tax from each pay through the Single Touch Payroll system. The amount withheld is based on the tax tables and your TFN declaration. At $120k, your weekly tax (excluding Medicare) would be about $510, plus $46 for Medicare, totalling $556 per week. Your take-home per week would be about $1,751. You can check your income statement through myGov after the end of the financial year to see if you’ve paid the right amount.

If you have a HELP or VET Student Loan debt, compulsory repayments start when your income is above the threshold ($51,550 in 2026–27). At $120k, the repayment rate is 4% of your income, so an extra $4,800 would be deducted. That’s not included in the basic tax calculation, but it’s a real cost for many graduates.

The bottom line for job seekers

When you’re comparing offers, don’t just look at the gross number. Use the pay guides to check award rates if applicable. Use the Salary Index to see how an offer compares to the national, state, and industry averages. And always calculate your expected take-home pay using the current tax rates. The tax on $120k salary Australia is about $28,920 including Medicare, leaving you with $91,080. That’s a solid income, but your actual spending power depends on where you live, your industry, and your personal tax situation.

Summary

• Gross $120,000 → take-home $91,080 (excluding HELP, surcharge, or packaging)
• Salary Index: 110.7 (10.7% above national average)
• Super guarantee: additional $14,400 paid by employer
• Always check if the ad says ‘plus super’ or ‘including super’
• Use the states page to see how your offer compares locally