How to Read a Payslip in Australia
Last updated: 7 May 2025
A payslip is a legal document your employer must provide every pay period. Yet many Australians don't fully understand every line on it. Here's a complete walkthrough of what each section means, with a worked example using a $85,000 salary.
The anatomy of an Australian payslip
While payslip formats vary by employer and payroll software, they all contain the same core information. Here's a typical monthly payslip for someone earning $85,000 per year:
| Payslip item | Monthly amount | Annual equivalent |
|---|---|---|
| Gross pay | $7,083.33 | $85,000 |
| PAYG tax withheld | −$1,685.00 | −$20,220 |
| Medicare levy | −$141.67 | −$1,700 |
| HECS/HELP (if applicable) | −$212.50 | −$2,550 |
| Net pay (take-home) | $5,044.16 | $60,530 |
| Employer super (11.5% SGC) | $814.58 | $9,775 |
Gross pay — what you earn before deductions
Gross pay is your total earnings before any tax or other deductions. It includes your base salary plus any allowances, overtime, bonuses, or commissions earned in that period.
On a monthly payslip, gross pay for a $85,000 salary = $85,000 ÷ 12 = $7,083.33. On a fortnightly payslip it would be $85,000 ÷ 26 = $3,269.23.
Important: Gross pay does not include your employer's super contributions (SGC). The 11.5% employer super is paid on top of your salary — it doesn't reduce your take-home pay.
PAYG tax withheld
PAYG (Pay As You Go) withholding is the income tax your employer deducts each pay period and remits to the ATO on your behalf. The amount is calculated using the ATO's tax withheld tables based on your gross pay and any tax file number (TFN) declarations you've provided.
The amount withheld is an estimate. Your actual tax liability is only confirmed when you lodge your tax return at the end of the financial year. If too much was withheld, you get a refund. If too little, you pay the shortfall.
Common reasons for under-withholding: you have multiple jobs and neither employer withholds for the combined income; you claim more than the appropriate tax offsets on your TFN declaration.
Medicare levy
The Medicare levy (2% of taxable income) funds Australia's public health system. It's withheld separately from income tax on most payslips, though some employers combine it with PAYG.
On $85,000 income: $85,000 × 2% = $1,700/year = $141.67/month.
You may pay an additional Medicare Levy Surcharge (MLS) of 1–1.5% if you earn above $93,000 (single) and don't have private hospital cover. This is assessed annually in your tax return, not withheld on your payslip.
HECS/HELP repayments
If you have a HECS/HELP student debt and earn above the repayment threshold ($54,435 in 2024–25), your employer withholds an additional amount to cover your compulsory repayment. This appears as a separate line on your payslip.
On $85,000 income, the repayment rate is 3% = $2,550/year = $212.50/month. Use our HECS calculator to see your exact repayment amount.
Net pay — your actual take-home
Net pay is what arrives in your bank account: gross pay minus PAYG tax minus Medicare levy minus HECS (if applicable) minus any other deductions (salary sacrifice, health insurance premiums, etc.).
On our $85,000 example without HECS: $7,083 − $1,685 − $142 = $5,256/month. With HECS: $5,044/month. This is a significant difference — useful to account for when budgeting for loan repayments.
Employer super contributions (SGC)
This line shows your employer's mandatory super contribution (11.5% of ordinary time earnings in 2024–25, rising to 12% on 1 July 2025). This is not deducted from your pay — it's an additional cost to your employer paid into your nominated super fund.
It should appear on your payslip even though it doesn't affect your take-home pay. If it doesn't appear, contact your employer or check your super fund account directly via myGov.
Other common payslip items
- Salary sacrifice: Pre-tax contributions to super or other approved benefits (e.g. novated car leases) that reduce your taxable income
- Leave balances: Accrued annual leave, sick leave, and long service leave — shown in hours or days
- Allowances: Tool allowances, travel allowances, uniform allowances — usually taxable
- Overtime: Hours worked beyond standard hours, typically at penalty rates (1.5× or 2× base rate)
- Year-to-date (YTD) figures: Cumulative totals from the start of the financial year (1 July)
Things to check on every payslip
- Is gross pay correct for the hours worked?
- Is super being paid? (Check super fund account quarterly)
- Are leave balances accumulating correctly?
- Is HECS being withheld if you have student debt?
- Do YTD figures match what you expect?
Employers must provide a payslip within one working day of each pay period under the Fair Work Act. If you're not receiving payslips or believe your pay is incorrect, contact the Fair Work Ombudsman.
Sources: Fair Work Act 2009, ATO PAYG withholding, ATO Medicare levy guidance. General information only — individual circumstances vary.