What is the Low Income Tax Offset (LITO)?

The Low Income Tax Offset reduces the tax payable by up to $700 for individuals earning $37,500 or less. It phases out between $37,500 and $66,667 at $0.05 per dollar above $37,500 (first $7,500) then $0.015 per dollar. It is applied after calculating your basic income tax liability and cannot create a refund on its own.

What work-related expenses can I claim?

You can claim a deduction for expenses you incurred in earning your income, provided you have records. Common claims include work-specific clothing and laundry, home office costs, tools and equipment, self-education directly related to your current role, and travel between work sites. You cannot claim commuting costs between home and work. The ATO allows a fixed-rate method of 67 cents per hour for home office expenses without needing to apportion bills.

Australian Tax Return Estimator 2024/25 — ATO Refund Calculator Australia

Australian Tax Return Estimator · AUAustralian Tax

Example result based on the prefilled values.

Refund / (Amount Owed)

A$95.50

Income Tax

A$16,304.50

Medicare Levy

A$1,600.00

Low Income Offset

A$0.00

Continue your plan

Useful next calculations

Related to this calculation

Use the Australian Income Tax Calculator

Continue with the related australian tax question this result raises.

Use the Medicare Levy & Surcharge Calculator

Continue with the related australian tax question this result raises.

When to use this calculator

Before accepting a pay change, bonus, pension contribution, or salary-sacrifice option.
When you want to compare employed, self-employed, or dividend-based income scenarios.
When you need a simple take-home estimate before running payroll or filing returns.
When you are approaching the £100,000 income level and want to understand the personal allowance taper effect.
When you are planning a salary sacrifice arrangement and need to see the net pay impact before agreeing terms.

A realistic Australia planning example

Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.

Gross Income (A$)

A$80,000

Tax Already Withheld (A$)

18000

Work-Related Expenses (A$)

500

After entering these figures, review refund / (amount owed), income tax and medicare levy together rather than in isolation — each metric tells a different part of the story. Then rerun the tool with one input adjusted to see which variable has the biggest effect on all three outputs before you settle on a plan.

How to read your results

Refund / (Amount Owed)

Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.

Income Tax

Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result or a recommendation to make a tax decision.

Medicare Levy

Low Income Offset

Method & assumptionsAuthoritative sources

This calculator estimates your Australian tax return outcome for 2024/25 using the ATO's income tax brackets, the Low Income Tax Offset (LITO), and the 2% Medicare Levy. Taxable income is calculated by subtracting allowable work-related expenses from gross income — the actual ATO process also allows deductions for charitable donations, self-education expenses, investment costs, and several other categories not modelled here. The Low Income Offset reduces tax payable by up to $700 for incomes up to $37,500, phasing out progressively to zero at $66,667. The Medicare Levy of 2% is applied on total gross income (with a low-income exemption under $26,000). The refund or amount owed is the difference between PAYG tax withheld by your employer and your actual calculated tax liability. Note that the calculator does not model the Low and Middle Income Tax Offset (which ended in 2021/22), private health insurance rebates, or the Medicare Levy Surcharge for uninsured high earners.

Common mistakes

!Using an assumption that is not supported by a current local quote, bill, statement or official source.
!Treating a generic estimate as a lender, provider, payroll or tax authority decision.
!Mixing monthly and annual inputs without converting them consistently.
!Forgetting location-specific taxes, fees, eligibility rules or payroll deductions where they apply.
!Testing only one scenario instead of checking how a cautious assumption changes the result.

What to do next

Run a second scenario with a cautious assumption so you can see the downside clearly.
Compare the result with the related calculators below before making a decision.
Check current local rules, eligibility and provider terms before applying or committing money.
Keep a record of the assumptions so you can update the estimate when a quote, bill or pay figure changes.
Use the result to prepare better questions for a lender, provider, adviser or employer rather than treating it as a final answer.

Frequently asked

Your refund is the difference between the tax your employer withheld during the year (PAYG) and your actual tax liability calculated at year end. If more was withheld than owed — common when allowable deductions reduce taxable income — you receive a refund. If less was withheld, you owe the balance to the ATO.

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