There is no special bonus tax rate
A bonus is not taxed under a separate bonus tax scale. It is added to your ordinary income for the year and assessed under the same tax brackets that apply to salary and wages. The often-quoted 47% figure is a withholding ceiling — the top marginal rate of 45% plus the 2% Medicare levy — not a bonus tax rate.
The confusion comes from the payslip: the amount withheld from a one-off payment can look much harsher than the tax you eventually owe. That usually doesn't mean payroll got it wrong — it means payroll followed the ATO withholding method for irregular payments. For the broader context on marginal brackets and the Medicare levy, see the income tax guide.
Why withholding looks high
For bonuses, commissions, and back payments, employers generally withhold using ATO Schedule 5, which annualises the one-off payment — payroll temporarily treats the bonus as if a payment like it could arrive every pay period. That pushes the withholding rate above the final extra tax on the bonus once your full-year income is reconciled.
Example
On a $95,000 salary with a $5,000 bonus, the actual additional tax is about $1,600, but the temporary withholding can be about $2,080. The gap is not a second tax — it is upfront withholding that gets reconciled in your return.
Actual tax vs withholding
The cleanest way to think about it:
Actual tax on bonus = tax on (salary + bonus) − tax on (salary alone)
That number can include more than income tax — depending on your circumstances the bonus can also increase the Medicare levy, HELP repayments, or the Medicare Levy Surcharge. If too much was withheld in the pay run, the excess usually comes back when you lodge; if too little, you can end up with a bill. The tax refund guide explains that reconciliation.
How HECS and MLS change the result
HELP repayments
On a $90,000 salary with an $8,000 bonus and a study loan, the bonus adds about $1,200 in HELP repayment on top of ordinary tax and Medicare. The HECS/HELP repayment guide covers the bands.
Medicare Levy Surcharge
On a $110,000 salary with no eligible private hospital cover, a $10,000 bonus adds about $100 in extra MLS. The MLS guide covers thresholds and the private health angle.
Source: ATO — Study and training loan thresholds and rates and ATO — Medicare levy surcharge thresholds and rates.
Super on bonuses
Bonuses that relate to ordinary hours of work are generally ordinary time earnings, so employer super is usually payable on them. Not every lump sum is treated the same way — overtime-linked payments and termination-related amounts like redundancy payouts can differ (the redundancy tax guide covers those rules), so the label on the payment matters.
What that looks like
A $10,000 bonus can mean about $1,200 in additional employer super where the payment is part of ordinary time earnings, based on the current 12% SG rate.
Source: ATO — How much super to pay.
Salary sacrificing a bonus
Instead of taking the bonus as cash taxed at your marginal rate, you can often direct it into super, where concessional contributions are taxed at a lower rate inside the fund. Two guardrails: the sacrifice agreement generally must be in place before the bonus is earned or declared, and the sacrificed amount counts toward your concessional contributions cap for the year. The salary sacrifice guide covers the cap mechanics, and the super sacrifice calculator shows the saving for your own numbers.
Worked examples
| Base salary | Bonus | Actual extra tax | Likely withholding | Possible refund gap |
|---|---|---|---|---|
| $80,000 | $10,000 | $3,200 | $4,410 | $1,210 |
| $95,000 | $5,000 | $1,600 | $2,080 | $480 |
| $130,000 | $20,000 | $7,700 | $9,400 | $1,700 |
Frequently asked questions
Is there a special bonus tax rate in Australia?
No. A bonus is taxed as ordinary income at your marginal rate. What confuses people is the withholding on the payslip: payroll may withhold more upfront using ATO Schedule 5, then the final tax is reconciled in your return.
Are bonuses taxed more than salary?
Not in the final assessment — a bonus is added to your salary and the same marginal brackets apply to both. The temporary withholding on the bonus pay run can be higher than your usual rate, which makes it look more heavily taxed, but any over-withheld amount comes back as a refund when you lodge.
Why does the tax on my payslip look higher than the actual tax?
ATO Schedule 5 annualises the one-off payment for withholding purposes. That can push the temporary withholding higher than the real extra tax on the bonus. Any excess is reconciled at tax time.
Can a bonus affect HECS repayments?
Yes. A bonus increases repayment income. That can push more of your income into HELP repayment bands, so the extra amount withheld is not always just income tax and Medicare.
Can a bonus affect the Medicare Levy Surcharge?
Yes. If you are near the MLS threshold and do not hold appropriate private hospital cover, a bonus can increase the surcharge you owe or move you into a higher MLS tier.
Does my employer pay super on a bonus?
Often yes, where the bonus forms part of ordinary time earnings. But not every one-off payment is treated the same way, so overtime-linked or termination-related amounts can differ.
Can I salary sacrifice my bonus into super?
Usually, if the sacrifice agreement is in place before the bonus is earned or declared. A sacrificed bonus is taxed at the concessional contributions rate inside super instead of your marginal rate, which can be a large saving — provided it fits inside your concessional contributions cap for the year.