Break-Even Salary Calculator
Shows the minimum salary needed to cover living costs.
Quick Use Samples
Your Monthly Expenses
Break-Even Analysis
This is the gross salary required to have a take-home pay equal to your annual expenses, based on simplified 2024 tax brackets.
To cover your annual expenses of $39,600, you need an after-tax income of the same amount. Factoring in income tax and the Medicare levy, this requires a gross (pre-tax) annual salary of approximately $44,620. On this salary, you would pay an estimated $5,020 in taxes. This break-even salary covers only your listed expenses and does not account for savings, investments, HECS/HELP debt, or discretionary spending. It's the absolute minimum you need to earn to not go backwards financially.
💰 Ready to grow your money?
- 🔹 Raiz: Microinvest your spare change
- 🔹 Swyftx: Trade crypto with confidence
We may receive a commission from our partners if you sign up through these links. This helps us keep our tools free.
What is a Break-Even Salary?
A break-even salary is the gross annual income you need to earn to cover all of your living expenses after tax. It's the point where your net income equals your total costs, leaving you with a net balance of zero. Knowing this figure is a powerful first step in financial planning and setting income goals.
Behind the Formula
The calculator works backwards from your expenses. It first annualizes your total monthly costs to find the required net annual income. Then, it reverse-engineers the Australian tax system, adding back the income tax and Medicare levy that would be payable on that net income to determine the gross salary required to achieve it.
Expert Insights
- Your break-even salary is your financial 'survival' number, not your goal. Aiming for a salary significantly above this figure is what allows for savings, investment, and wealth creation.
- This calculation highlights the 'tax wedge' - the significant difference between gross pay and take-home pay. A $60,000 net income requirement translates to a much higher gross salary.
- As your expenses change, so does your break-even point. Reviewing this figure annually, especially after major life events like moving house or having a child, is a crucial financial health check.
Actionable Tips
- Use your break-even number as a baseline in salary negotiations to ensure any new role at least covers your fundamental living costs.
- Focus on the 'big three' expenses: housing, transport, and food. Reducing these will have the largest impact on lowering your break-even salary requirement.
- Once you know your break-even point, you can calculate your 'savings rate potential' at different salary levels, which is a powerful motivator for career progression.
Real-World Examples
A graduate moving to a capital city
A graduate calculates their total annual expenses will be $40,000. The calculator shows they need to secure a job with a gross salary of at least $48,000 to break even after tax.
A family assessing their budget
A family determines their annual household expenses are $85,000. The tool shows them they need a combined gross household income of approximately $115,000 to cover their costs.
A freelancer setting income goals
A freelancer calculates their personal and business expenses total $60,000 per year. They use the break-even calculator to determine they need to generate revenue that results in a gross income of over $78,000 to live.
Glossary of Terms
Gross Salary
Your total income before any taxes or deductions are taken out.
Net Income (Take-Home Pay)
The amount of money you receive after all deductions, like tax and Medicare, have been made.
Fixed Expenses
Costs that are the same each month, such as rent, mortgage payments, and loan repayments.