---
title: "How PayByRoster Calculates Your Pay - Methodology Explained"
url: https://paybyroster.com/how-it-works
description: "Understand exactly how PayByRoster calculates your take-home pay. Step-by-step breakdown of Australian tax brackets, Medicare levy, HECS, and superannuation with real examples."
lang: en
---

Last updated: 30 January 2026

# How PayByRoster Calculates Your Pay

A detailed, step-by-step breakdown of our calculation methodology. Technical enough for developers and accountants to verify accuracy, readable enough for everyone to understand.

Try the calculator (https://paybyroster.com/calculate-pay)

## Calculation Flow

Roster Pattern

Gross Pay

Tax + Medicare + HECS

Net Pay

## Calculation Overview

PayByRoster calculates your annual gross pay from your roster, then deducts income tax, Medicare Levy, and HECS (if applicable), and adds superannuation on top.

Our calculator follows the same methodology used by the Australian Taxation Office (ATO) for calculating income tax. The process involves six key steps:

1. **Calculate Gross Income** — From your roster pattern, hourly rate, shift penalties, and allowances
2. **Apply Tax Brackets** — Using the 2025-26 ATO resident tax rates
3. **Add Medicare Levy** — 2% of taxable income (with low-income exemptions)
4. **Apply LITO** — Low Income Tax Offset reduces tax for incomes under $66,667
5. **Add HECS/HELP** — Compulsory repayments if you have a study debt
6. **Calculate Superannuation** — 12% of ordinary time earnings

## Step 1: Calculate Gross Income

Gross pay = (Base rate × Hours × Penalties) + Allowances, calculated for every working day in your roster over a full year.

Your gross income is calculated by applying your hourly rate across all working days in your roster pattern for a full financial year (1 July – 30 June).

### The Formula

`Annual Gross = Σ (Daily Hours × Base Rate × Day Multiplier × Shift Multiplier) + Allowances`

Sum of daily pay across all working days in the year, plus daily allowances.

### Components Explained

| Component | Description | Example |
| --- | --- | --- |
| Base Rate | Your standard hourly rate before penalties | $55.00/hour |
| Daily Hours | Hours worked per shift | 12 hours |
| Day Multiplier | Weekend/public holiday loading | 1.5× for Saturdays |
| Shift Multiplier | Night shift or other shift loadings | 1.15× for night shift |
| Allowances | FIFO, living away, travel allowances per day | $50/day |

**Working Days Per Year:** For an 8/6 roster (8 days on, 6 days off), you work approximately 209 days per year. We calculate the exact number by projecting your roster pattern across 365 days.

## Step 2: Apply Tax Brackets (2025-26)

Income tax is calculated in slices. You pay 0% on the first $18,200, then increasing rates on each bracket above that.

Australia uses a progressive tax system. This means you don't pay a flat rate on all your income — instead, different portions of your income are taxed at different rates.

### 2025-26 Tax Brackets (Residents)

| Taxable Income | Tax Rate | Tax Formula |
| --- | --- | --- |
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | 16 cents for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,288 + 30 cents for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 + 37 cents for each $1 over $135,000 |
| $190,001+ | 45% | $51,638 + 45 cents for each $1 over $190,000 |

### Plain English Calculation

`Income Tax = Base Amount + (Income − Threshold) × Rate`

Where 'Base Amount' and 'Threshold' come from the bracket your income falls into.

### Example: Calculating tax on $120,000 income

## Step 3: Add Medicare Levy

Most Australians pay 2% of their taxable income as the Medicare Levy. Low-income earners may pay less or nothing.

`Medicare Levy = Taxable Income × 0.02`

Standard rate for incomes above $27,222 (singles, 2025-26).

### Low Income Thresholds (2025-26)

| Income Range | Medicare Levy |
| --- | --- |
| Below $26,000 | Nil (fully exempt) |
| $26,000 – $32,500 | Reduced rate (phases in at 10% of excess over $26,000) |
| Above $32,500 | Full 2% |

**Medicare Levy Surcharge:** High earners ($93,000+ single) without private hospital cover may pay an additional 1.0–1.5% surcharge. PayByRoster does not currently include this in calculations.

## Step 4: Apply LITO (Low Income Tax Offset)

LITO reduces your tax by up to $700 if you earn less than $66,667. It phases out between $37,500 and $66,667.

### LITO Amounts (2025-26)

| Taxable Income | LITO Amount |
| --- | --- |
| $0 – $37,500 | $700 (full offset) |
| $37,501 – $45,000 | $700 minus 5 cents for each $1 over $37,500 |
| $45,001 – $66,667 | $325 minus 1.5 cents for each $1 over $45,000 |
| $66,668+ | Nil |

`For income $45,001–$66,667: LITO = $325 − (Income − $45,000) × 0.015`

LITO reduces to zero at $66,667.

## Step 5: Calculate HECS/HELP Repayment

If you have a HECS/HELP study debt and earn above $54,435 (2025-26), a percentage of your income is withheld as a repayment.

HECS repayments are calculated on your **Repayment Income** (taxable income + any reportable fringe benefits + net investment losses). The repayment is a percentage of your total income, not just the amount over the threshold.

### 2025-26 HECS/HELP Repayment Rates

| Repayment Income | Rate |
| --- | --- |
| Below $54,435 | Nil |
| $54,435 – $62,850 | 1.0% |
| $62,851 – $66,620 | 2.0% |
| $66,621 – $70,618 | 2.5% |
| $70,619 – $74,855 | 3.0% |
| $74,856 – $79,346 | 3.5% |
| $79,347 – $84,107 | 4.0% |
| $84,108 – $89,154 | 4.5% |
| $89,155 – $94,503 | 5.0% |
| $94,504 – $100,174 | 5.5% |
| $100,175 – $106,185 | 6.0% |
| $106,186 – $112,556 | 6.5% |
| $112,557 – $119,309 | 7.0% |
| $119,310 – $126,467 | 7.5% |
| $126,468 – $134,056 | 8.0% |
| $134,057 – $142,100 | 8.5% |
| $142,101 – $150,626 | 9.0% |
| $150,627 – $159,663 | 9.5% |
| $159,664+ | 10.0% |

`HECS Repayment = Repayment Income × Applicable Rate`

Applied to your total repayment income, not just the amount over the threshold.

## Step 6: Calculate Superannuation

Employers must contribute 12% of your Ordinary Time Earnings (OTE) to your super fund. This is on top of your gross pay, not deducted from it.

`Super Contribution = Ordinary Time Earnings × 0.12`

Superannuation Guarantee rate for 2025-26 is 12%.

### Key Points

- **OTE includes:** Base salary, shift loadings, some allowances
- **OTE excludes:** Overtime, most expense reimbursements
- **Maximum contribution base:** $62,500 per quarter ($250,000/year) — super is only mandatory up to this limit

### Division 293 Tax (High Earners)

If your income + super contributions exceed $250,000, you pay an additional 15% tax on super contributions. This is called Division 293 tax.

`Division 293 = min(Income + Super − $250,000, Super Contributions) × 0.15`

Extra 15% tax on super for high earners. Calculated on the lesser of the excess over $250k or total super contributions.

**Division 293 affects your super, not your take-home pay.** The additional tax is typically paid from your super fund, reducing your retirement savings rather than your current income.

## Worked Examples with Real Numbers

### Example 1: Standard FIFO Worker (8/6 Roster, $55/hour)

### Example 2: Night Shift Healthcare Worker (4 on/4 off)

### Example 3: High Earner with Division 293

## Penalty Rate Calculations

Penalty rates multiply your base hourly rate. They stack in a specific order: base → shift → day type → overtime.

### Default Penalty Rates

| Penalty Type | Typical Range | Notes |
| --- | --- | --- |
| Night Shift | 15–30% | Applied per shift, varies by award |
| Saturday | 50–100% | Weekend penalty |
| Sunday | 75–200% | Usually higher than Saturday |
| Public Holiday | 150–250% | State-specific holidays apply |

### Stacking Order

`Daily Pay = Base Rate × Hours × Shift Multiplier × Day Multiplier + Allowances`

Multipliers are applied sequentially. A night shift on Sunday would be: Base × Night × Sunday.

**Award-specific rules vary.** Some awards don't allow stacking (the higher penalty applies instead). PayByRoster uses Fair Work standard stacking by default — you can adjust multipliers to match your specific award.

## Edge Cases & Special Scenarios

### Partial Periods & Pro-Rata Calculations

### Tax-Free Threshold Not Claimed

### Public Holidays During Roster

### Maximum Superannuation Contribution Base

## ATO References & Compliance

PayByRoster uses official Australian Taxation Office rates and thresholds. All figures are updated for the 2025-26 financial year.

### Official Sources

- ATO Individual Income Tax Rates: https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
- ATO Medicare Levy Information: https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy
- HECS-HELP Repayment Thresholds: https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds
- Superannuation Guarantee Rates: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay
- Division 293 Tax Information: https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/division-293-tax

**Disclaimer:** PayByRoster provides estimates for informational purposes only. Results should not be considered financial or tax advice. Individual circumstances vary — consult a registered tax professional or accountant for personalised advice.

### Need Help?

Found an issue with our calculations or have questions about the methodology?

Contact us (https://paybyroster.com/contact)

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