- Published on
PAYG Withholding & Salary Take-Home Pay Guide (2026–27)
- Authors
- Name
- Charlotte Smith
- https://x.com/CharlotteSmithAU
PAYG Withholding & Salary Take-Home Pay Guide (2026–27)
If you are an employee in Australia, your employer is required by law to deduct Pay As You Go (PAYG) withholding tax from every regular pay cycle before depositing your net wages into your bank account.
What is PAYG Withholding?
PAYG withholding is the ATO system that ensures income tax is collected continuously throughout the financial year rather than in a single large tax bill at year-end.
Your employer uses ATO tax tables to calculate withholding based on:
- Your gross pay per pay period (weekly, fortnightly, or monthly).
- Whether you claimed the Tax-Free Threshold (,200) on your Tax File Number (TFN) declaration.
- Whether you have an active HELP / VET Student Loan debt.
Claiming the Tax-Free Threshold
When starting a new job, claiming the tax-free threshold reduces the amount of PAYG tax withheld each payday. You can generally only claim the tax-free threshold from one employer at a time (usually your primary job).
If you work two jobs simultaneously, claiming the tax-free threshold on both jobs can lead to an end-of-year tax bill because insufficient tax will be withheld.
Calculate Your Net Payslip Amount
To check whether your employer is withholding the correct amount of tax or to model a salary increase, use our free PAYG Calculator and PAYG Withholding Calculator.