How much of a pay rise do you actually keep?
A $10,000 raise does not add $10,000 to your bank account. Here is how tax, Medicare and HECS shape what you really take home — and why a rise is still always worth it.
A pay rise never lands in your account at full value — tax, the Medicare levy and any HECS repayment take a share of the extra. Knowing how much you actually keep helps you judge whether a raise, or a higher-paying role, is worth it, and puts the "I'll just lose it to tax" myth to rest.
Your rise is taxed at your top rate
Because a pay rise sits on top of your existing income, it is taxed at your marginal rate — the rate on your highest slice of income. Someone in the 30% bracket keeps about 68c of each extra dollar after 30% tax and the 2% Medicare levy; someone in the 37% bracket keeps about 61c.
You are never worse off
A common myth is that a raise can push you into a higher bracket and leave you with less overall. It cannot. Only the portion of income above each threshold is taxed at the higher rate, so a pay rise always increases your take-home — just not by the full gross amount.
The HECS sting
If you have a study debt, a pay rise can lift your compulsory HECS repayment, and crossing a repayment threshold can take an extra bite. This is the one case where a raise can feel underwhelming — though you are still ahead, and you are clearing your debt faster.
Worked example
James earns $90,000 and is offered a rise to $100,000 — a $10,000 gross increase. After income tax and the Medicare levy he keeps about $6,800 of it, roughly 68%. If he has a HECS debt, a higher repayment trims that further, to around $5,300 — still a solid gain, just less than the sticker suggests.
See what you keep from a raise
Enter your current and new salary to see your net gain, effective rate and the HECS impact, for 2026-27.
This is general information, not personal advice. For choosing between roles, see our guide to comparing job offers.
Frequently asked questions
Will a pay rise push me into a higher bracket and leave me worse off?
No. Australia's tax is marginal — only the income above each threshold is taxed at the higher rate. A pay rise always increases your take-home, just not by the full gross amount.
How much of a pay rise do I keep?
Roughly your marginal-rate share. In the 30% bracket you keep about 68c per extra dollar after tax and Medicare; in the 37% bracket about 61c. A HECS debt reduces it further.
Why does my raise feel so small after tax?
Because the extra income is taxed at your top marginal rate, not your lower average rate — so the percentage taken from the raise is higher than the percentage taken from your whole salary.
Does HECS reduce my pay rise?
Yes. A higher salary lifts your compulsory HECS repayment, and crossing a repayment threshold can take a noticeable extra slice out of a raise.