Income Gross-Up Calculator — Convert Net Income to Gross (2026)

Income gross-up converts a tax-free or net amount into the equivalent pre-tax (gross) figure. The standard use case is mortgage lending — banks calculate serviceability against gross income, but some income arrives without tax deducted (certain allowances, government benefits, FBT-exempt benefits), so it has to be grossed up to fit the lender's calculation.

The formula

Grossed-up = net amount ÷ (1 − marginal tax rate)

Example: $12,000 of tax-free income at a 37% marginal rate.

• Grossed-up = $12,000 ÷ (1 − 0.37) = $19,048

That means you'd need $19,048 of pre-tax salary to net the same $12,000 after tax. For lender serviceability, it's the $19,048 number that should be added to your gross income, not the $12,000.

Common income types that need gross-up

Government and statutory benefits (tax-free):

• Family Tax Benefit (Part A and B)
• Carer Allowance
• Some veteran benefits and pensions
• Disability Support Pension (in some scenarios)

Employer benefits:

• FBT-exempt benefits (charity, public hospital, rebatable employer salary packaging)
• Reportable fringe benefits (handled differently — lenders typically use the FBT type 1 gross-up rate of 1.8868 to convert reported benefits into a cash equivalent)

International:

• Foreign income with double-tax-treaty exemption (gross up at the foreign country's rate, treat as tax-paid in some lender models)

Marginal tax rates for 2025–26

Taxable income	Marginal rate
$0 – $18,200	0%
$18,201 – $45,000	16%
$45,001 – $135,000	30%
$135,001 – $190,000	37%
Over $190,000	45%

Plus 2% Medicare Levy (applies above $26,000 in most cases) — included in the lender's effective tax rate.

For most middle-income earners, the relevant gross-up rate is 30% or 37%. The 32.5% rate (a common historical reference) was replaced from the 2024–25 year onwards under the revised Stage 3 cuts.

Lender variation

Not every lender allows every type of gross-up:

• Family Tax Benefit — most lenders include with appropriate evidence (Centrelink statement showing 12 months of receipts)
• Disability Support Pension — most lenders include for fully-and-permanently disabled recipients
• Veteran benefits — typically included
• Reportable fringe benefits (RFB) — specific FBT gross-up rate applied; some lenders haircut by 20%
• Foreign income — varies considerably; documentation requirements heavy

Brokers typically maintain a matrix of which lenders accept which gross-ups at what rates. For complex income structures, talk to a broker before approaching a single lender directly.

When NOT to gross up

The calculator handles tax-free income. It does NOT apply to:

• Franked dividends — different mechanism (imputation credits already gross up dividend income)
• Tax-deductible expense reimbursements — these are not income at all, just cost recovery
• Capital gains — taxed at marginal rate after 50% discount; not really a gross-up situation
• Salary sacrificed amounts — these are pre-tax already, salary sacrifice converts gross to a benefit

For most mortgage and budgeting purposes, gross-up applies cleanly to genuine tax-free recurring income types.

Worked example: home loan with multiple income types

A couple applying for a mortgage:

• Partner A: $95,000 PAYG salary
• Partner B: $48,000 PAYG salary
• Family Tax Benefit Part A: $7,200 tax-free annual

Without gross-up: $95,000 + $48,000 + $7,200 = $150,200 gross (incorrect — FTB needs gross-up)

With gross-up at 32.5% marginal rate:

• FTB grossed up: $7,200 ÷ 0.675 = $10,667
• Total gross: $95,000 + $48,000 + $10,667 = $153,667 gross

The $3,500 difference flows through to roughly $20,000–$25,000 of additional borrowing capacity at typical lender DTI ratios — material on a 20-year mortgage decision.