Reverse Salary Calculator

Worked example

Say you want $2,500 in your account every fortnight. That is $65,000 a year. The calculator searches for the lowest salary whose take-home pay reaches that figure and finds $81,176.32.

Checking it forwards: after the standard deduction, income tax on that salary is $14,572.80 and the Medicare levy is $1,603.52, leaving $65,000.00. Your employer also pays $9,741.16 into super, so the total package is $90,917.48.

With a HECS-HELP debt, the same take-home pay needs $84,189.63, which is $3,013.31 more, because the compulsory repayment comes out of the same pay.

Using it in salary negotiations

Job offers are quoted before tax, and often as a package that includes super. Working backwards from your budget tells you the lowest offer that actually covers it, so you can name a number with confidence.

• Compare like with like. If an offer is quoted including super, the base salary is lower than the headline. Taking home $6,000 a month needs a salary of $91,470.40, or a package of $102,446.85 including super.
• Price the raise, not the take-home. To lift take-home pay from $6,000 to $6,500 a month, salary has to rise by $8,823.36: you keep about 68% of each extra dollar at that income.
• Leave room for the year ahead. Tax thresholds and HECS-HELP thresholds change on 1 July, so check the year you will actually be paid in with the financial year menu.

How the calculation works

There is no simple formula to turn take-home pay into a salary, because tax rates step up, the low income tax offset phases out, and the Medicare levy surcharge and HECS-HELP start at thresholds. Instead, the calculator runs the same tax engine as the pay calculator over and over, halving the search range each time, until it finds the lowest salary to the cent whose take-home pay is at least your target. Because taxable income is rounded down to whole dollars, take-home pay rises in small steps, and the result is the start of the step that reaches your target.