Tax Offsets Estimate Calculator
Estimate the Low Income Tax Offset (LITO) you may be entitled to in Australia and see your tax payable after this offset is applied.
Your results
Calculation breakdown
- LITO taper
- Offset tapers down from the maximum as income rises through the LITO thresholds
- Tax after offset
- Tax after offset = income tax − LITO (floored at zero) + Medicare levy
Worked example
On a $40,000 taxable income, the Low Income Tax Offset reduces tax payable by around $625, cutting the tax bill from about $3,970 to roughly $3,345 including the Medicare levy.
Assumptions
- Only models the Low Income Tax Offset (LITO), not other offsets such as the seniors and pensioners offset.
- LITO is applied automatically by the ATO; no separate claim is needed.
Sources
How this calculator works
This calculator estimates your Low Income Tax Offset entitlement based on your taxable income and the official LITO thresholds and taper rates, then shows your tax payable before and after the offset is applied. LITO is applied automatically by the ATO and directly reduces tax payable, not your taxable income.
Rates sourced from the Australian Taxation Office for the 2026–27 financial year. Last reviewed 01/07/2026.
Frequently asked questions
What is the Low Income Tax Offset?
LITO is an offset that reduces the tax payable of lower and middle income earners, phasing out as income rises above set thresholds.
Do I need to apply for LITO separately?
No, the ATO applies eligible offsets automatically when you lodge your tax return.
Does this include other offsets like the seniors offset?
No, this calculator only models LITO; other offsets such as the seniors and pensioners tax offset are not included.
Rates and thresholds are configured for the 2026–27 Australian financial year and should be reviewed when government settings change.