---
title: "Low income tax offset calculator (LITO) | TaxCalcTool"
description: "Understand how the low income tax offset reduces Australian income tax, why it is not a deduction, and why it cannot create a refund by itself."
canonical: "https://taxcalctool.com/australia/low-income-tax-offset/"
---

Canonical page: https://taxcalctool.com/australia/low-income-tax-offset/

> This is the readable version of the published page. Use the HTML page for interactive controls. Any displayed calculation is the page’s default example, not a personal estimate. The visible source status applies to this build; consult https://taxcalctool.com/source-health.json for the latest check.

[Home](https://taxcalctool.com/)  / [Australia](https://taxcalctool.com/australia/)  / Low income tax offset calculator (LITO)

# Low income tax offset calculator (LITO)

See how much the low income tax offset reduces your income tax. Enter your salary; the calculator applies the offset automatically and shows the saving separately.

[Use the calculator](https://taxcalctool.com/australia/low-income-tax-offset/#calculator) [How it works](https://taxcalctool.com/australia/low-income-tax-offset/#explanation) [Worked example](https://taxcalctool.com/australia/low-income-tax-offset/#worked-example)

AUAustralia · Resident employee

All amounts in AUD

Annual salary before tax

$

Default example input: 42,000

Excludes employer superannuation.

Financial year1 July to 30 June

Checking official sources Annual estimate. Your payslip may differ.

[View official sources ↗](https://taxcalctool.com/sources/)

For single, full-year residents aged 18–66 with no dependants, salary only, and no itemised deductions. [Check your situation](https://taxcalctool.com/supported-scenarios/)

## An offset reduces tax after it is calculated

The calculator first works out tax using the resident income bands. It then applies the available low income tax offset, limited to the income tax it can reduce.

That is different from a deduction, which changes taxable income before the rates are applied. The engine applies the supported standard deduction automatically for the selected year; other deductions are outside this release.

[Australian tax brackets 2026–27 and 2025–26](https://taxcalctool.com/australia/tax-brackets/)

## The amount depends on income

The available offset tapers as taxable income increases and eventually reaches zero. Within the supported profile, the tool works out that amount automatically from the selected year’s rules.

The ATO also determines eligibility when processing a tax return. There is no separate payment promised by the offset shown in this estimate.

## A non-refundable offset has limits

The offset can reduce income tax to zero; an unused amount does not become a refund and does not reduce Medicare levy. Any tax refund also depends on withholding and the rest of your tax return.

Other offsets are outside the current calculator. If you receive eligible government payments, have pension-related entitlements or claim another offset, this salary-only result may not describe your final position.

## Common questions

## Read the official guidance

- [ATO: Low income tax offset](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/tax-offsets/low-income-tax-offset)
- [ATO: Tax calculation and non-refundable offsets](https://www.ato.gov.au/api/public/content/0-d300e446-ea4e-4046-a021-0dd9072e26ab)
- [Income Tax Assessment Act: standard deduction, section 25-130](https://www.legislation.gov.au/C2004A05138/2026-07-01/2026-07-01/text/original/epub/OEBPS/document_1/document_1.html)

For exact rule sections and effective dates, see the [source register](https://taxcalctool.com/sources/) .

## Your next question

- [Australian tax brackets 2026–27 and 2025–26](https://taxcalctool.com/australia/tax-brackets/)
- [Medicare levy calculator and low-income reductions](https://taxcalctool.com/australia/medicare-levy/)
- [How TaxCalcTool calculates an estimate](https://taxcalctool.com/methodology/)

[All Australian tax tools and guides](https://taxcalctool.com/australia/)