SAPTO Calculator

How is SAPTO calculated?

SAPTO is worked out on rebate income, not taxable income, in two parts: an income test that decides whether you get anything, and a taper that decides how much. The ATO applies it when it assesses your return, using the formula in the Income Tax Assessment (1936 Act) Regulations that the calculator above runs.

Step by step, using the ATO's own example

1. Add up your rebate income. Start with taxable income, then add reportable super contributions, total net investment loss and your adjusted fringe benefits total. A taxable loss counts as nil.
2. Run the income test. A single person needs rebate income under the cut-out: $52,759 for 2025-26 and $53,874 for 2026-27. For a couple, half of the combined rebate income of both partners must be under the per-partner cut-out.
3. Find your maximum offset. $2,230 for a single person, $1,602 for each partner of a couple and $2,040 for each partner of an illness separated couple, plus any unused amount an eligible spouse transfers to you.
4. Apply the 12.5 cent taper. If your own rebate income is over the shade-out threshold, cut the maximum by 12.5 cents for each dollar of the excess and round up to the next whole dollar. José, a single pensioner in the ATO's 2025-26 example, has $39,000 of rebate income, $4,081 over the $34,919 shade-out. That takes $510.125 off $2,230, leaving $1,719.875, which rounds up to $1,720.
5. Set it against your income tax. SAPTO comes off income tax before the low income tax offset, and neither can take tax below nil. José's $3,328 of tax falls to $983 after SAPTO and $625 of LITO, which is our calculation rather than an ATO figure.

Where the thresholds come from

The regulation sets the shade-out threshold at $18,200 plus ($445 plus the maximum offset) divided by the lowest marginal tax rate, rounded up to the dollar. The cut-out is the maximum offset divided by 0.125, added to the shade-out. The $445, along with a $37,000 reduction threshold and a 1.5% reduction rate, are the pre-2020 low income tax offset settings frozen into the formula. They are not today's $700 low income tax offset, and they do not move from year to year.

SAPTO thresholds for 2025-26 and 2026-27

For 2026-27 a single senior keeps the full $2,230 up to $36,034 of rebate income, and the offset cuts out at $53,874. For 2025-26, the year most people are lodging now, those figures are $34,919 and $52,759.

Calculated from the regulation formula. Every figure matches the ATO's published tables: QC72197 for 2025-26 and QC104015 for 2026-27.

Why the thresholds rose for 2026-27

The lowest marginal tax rate fell from 16% to 15% on 1 July 2026, and the ATO confirmed there would be no change to the maximum offset amounts. Because the formula divides by the lowest marginal rate, a lower rate gives a higher threshold. The single shade-out rises by $1,115, and the cut-out moves by the same amount because it always sits $17,840 above the shade-out.

For couples, the per-partner cut-out is the figure that matters. For 2025-26 the ATO also prints the combined limits: $87,620 for a couple living together and $100,104 for an illness separated couple. For 2026-27 it has published only the per-partner figures, so the test reads: half of your combined rebate income must be under $44,663, or $51,087 if you live apart due to illness.

What counts as rebate income for SAPTO?

Rebate income is the figure every SAPTO test runs on. Section 6(1) of the Income Tax Assessment Act 1936 makes it the sum of four amounts:

• Taxable income, leaving out any assessable First home super saver released amount. A taxable loss counts as nil.
• Reportable super contributions, which covers reportable employer super contributions and personal super contributions you claim a deduction for.
• Total net investment loss: net financial investment loss plus net rental property loss.
• Adjusted fringe benefits total, built from the reportable fringe benefits amounts on your income statement, adjusted as below.

The 0.53 factor applies to one kind of employer only

Reportable fringe benefits from an employer exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986, such as a public benevolent institution, some charities, a public hospital or an ambulance service, are multiplied by 0.53 and rounded down to the dollar. Fringe benefits from any other employer count in full. The ATO's 2026 return instructions say so directly: it does not adjust the label W amount, the non-exempt total, when it works out SAPTO.

The gap is large. $10,000 of reportable fringe benefits from a public hospital adds $5,300 to rebate income. The same $10,000 from a private employer adds $10,000.

Who is eligible for SAPTO?

You need two things: the pension or age condition, and a rebate income under the cut-out for your status. You cannot claim it if you were in jail for the whole income year. The SAPTO glossary entry covers the definitions in brief.

The pension or age condition

You meet it if you received one of these during the year. The ATO says only these ten count:

• Age Pension
• Carer Payment
• Disability Support Pension, if you are age-pension age
• Education Entry Payment
• Parenting Payment (single)
• age service pension
• income support supplement
• Veteran Payment
• invalidity service pension, if you are age-pension age
• partner service pension

You can also meet it without receiving anything. If you were age-pension age and eligible for the Age Pension but did not get it, because you never claimed or because you failed the income or assets test, you qualify as long as one residence condition applies. The usual one is 10 years or more of Australian residence for age pension purposes, with at least 5 of them continuous. Others cover refugees and special humanitarian entrants, some widowed women, people on a widow B pension, widow allowance or partner allowance just before age-pension age, and people who would qualify under an international social security agreement. This is the self-funded retiree route.

Veterans have a parallel route: meet the veteran pension age test and be eligible for a Veterans' Affairs pension, allowance or benefit without receiving it, with eligible war service or qualifying service as a Commonwealth veteran, allied veteran or allied mariner.

How old do you need to be?

For 2025-26 the ATO states that you must be 67 or older on 30 June 2026 for the Age Pension, or 60 or older on that date for the veteran route. Age pension age has been 67 since 1 July 2023. The ATO has not yet published its 2027 return instructions, so no ATO page states the age test for 2026-27 yet. Some listed payments carry no age condition at all: Simon, in the ATO's example 5, gets the full offset on Parenting Payment (single).

Couples, carers and other cases

• A couple is tested on half of the combined rebate income of both partners, including any amount a trustee was liable to pay tax on for a spouse under a legal disability.
• Illness separated means you do not live together because one or both of you has an indefinitely continuing illness or infirmity, or one of you is in a nursing home, and your combined living expenses are higher as a result.
• If more than one status applied during the year, for example because you had a spouse for part of it, the ATO bases the offset on whichever gives you the greatest entitlement.
• If you qualify for both the beneficiary tax offset and SAPTO, you receive only one, whichever is worth more.
• Carer Payment is exempt from tax, and SAPTO does not apply, where both the carer and the person cared for are under age-pension age, or the carer is under age-pension age and a care receiver has died.
• Part-year residents are outside the ATO's calculator and outside this one. The ATO works out their offset when the return is lodged.

Can you transfer unused SAPTO to a spouse?

Yes, if you are both eligible. The ATO works out the transfer itself when you both lodge, so there is no separate claim. If your spouse's taxable income is $6,000 or less, their whole offset is available to you. Above $6,000 the ATO uses this formula:

Unused offset = A - ((B - $6,000) x 0.15)

A is your spouse's SAPTO amount and B is their taxable income plus exempt pension income, such as an exempt Disability Support Pension or Carer Payment. The transferred amount raises your maximum and your shade-out threshold when the amount is worked out, but not your cut-out. You still have to pass the ordinary income test.

The ATO's example 9, reproduced

A member of an illness separated couple has $48,000 of rebate income for 2025-26. The spouse, also eligible, has $10,000 of taxable income.

1. Spouse's unused offset. $10,000 is $4,000 over $6,000, and 15% of that is $600. $2,040 less $600 leaves $1,440 to transfer.
2. New maximum. $2,040 plus $1,440 is $3,480.
3. New shade-out. The simple formula would pass $37,000, so the regulation's second formula applies and gives $39,912, up from $33,732.
4. The offset. $48,000 is $8,088 over the new threshold. At 12.5 cents a dollar that is $1,011, leaving $2,469.

Without the transfer, the same $48,000 would leave this person with $257. Run on 2026-27 thresholds, the case gives a shade-out of $40,508 and an offset of $2,544. Both are our calculations: the ATO has not published either.

The formula keeps the fixed $6,000 and 15% written into the regulation. On our calculation the transferable amount reaches nil once the spouse's taxable income plus exempt pension reaches $16,680 for a couple living together, or $19,600 for an illness separated couple. A different formula applies if your spouse is a foreign resident, and the calculator above does not model it.

Does SAPTO change the Medicare levy?

Being entitled to at least $1 of SAPTO gives you a higher Medicare levy low-income threshold. A single senior pays no levy on taxable income up to $44,268, then 10 cents for each dollar above it, with the full 2% from $55,335. Everyone else starts paying above $28,011 and pays the full levy from $35,013.

For a family entitled to SAPTO the lower threshold is $61,623 and the upper $77,028, raised by $4,338 and $5,423 for each dependent child. If your SAPTO reduces to nil, you lose the seniors thresholds and use the ordinary ones. The Medicare levy calculator runs the family method on those ordinary thresholds.

On $50,000 of taxable income in 2026-27, a single senior with no add-backs gets $485 of SAPTO. That is enough to keep the seniors threshold, so the levy is $573 instead of $1,000, a saving of $427 on our calculation.

How much can a senior earn before paying tax?

A single senior whose only income is taxable income pays no income tax on up to $36,961 in 2026-27, and up to $35,814 in 2025-26. That is the $18,200 tax-free threshold, SAPTO and the low income tax offset working together. There is no Medicare levy at those incomes either, because both sit under the seniors threshold of $44,268.

Our calculation, not an ATO figure: the highest whole-dollar taxable income with nil income tax after SAPTO and LITO, found by searching the engine behind the calculator. It assumes rebate income equals taxable income, a full year of residence and, for couples, both partners on the same income so nothing transfers. Reportable super, investment losses or fringe benefits lower these figures by raising rebate income.

Above that line, the 2026-27 tax brackets set the rate on each extra dollar while SAPTO tapers away. If tax was withheld from a pension or wage during the year, the tax refund calculator compares it with what you owe.

SAPTO worked examples for 2025-26 and 2026-27

The 2025-26 column reproduces the ATO's own worked examples, calculated by the engine behind this page, and every figure matches the ATO. The 2026-27 column runs the same people on the new thresholds. The ATO has not published 2026-27 examples, so that column is our calculation.

Keith shows the couple rule at work. Jean has no rebate income, so half their combined income is $16,825, well under the cut-out. His offset still runs on his own $33,650, which is $2,656 over the $30,994 shade-out, so $1,602 falls by $332 to $1,270. Marko's $85,690 is over the single cut-out in both years, so he gets nothing even though he qualifies for the Age Pension.

Sources

Each source below was retrieved on 19 September 2026 and returned a live page.

• ATO: Seniors and pensioners tax offset (QC72197, last updated 8 June 2026). The 2025-26 table, the 12.5 cent taper and rounding, eligibility, the spouse transfer formula and worked examples 1 to 9.
• ATO: Personal income tax: new tax cuts for every Australian taxpayer (QC104015, last updated 13 May 2026). The 2026-27 SAPTO table and the 16% to 15% rate change.
• ATO: Income tests (QC72207, last updated 8 June 2026). The parts of rebate income and the 0.53 factor.
• ATO: Rebate income 2026 (QC106658, last updated 30 May 2026) and IT1 Total reportable fringe benefits amounts 2026 (QC106630, last updated 30 May 2026). Rounding down after 0.53, and no adjustment to non-exempt fringe benefits.
• ATO: T1 Seniors and pensioners tax offset 2026 (QC106619, last updated 30 May 2026). The age tests at 30 June 2026 and the tax offset codes.
• ATO: Beneficiary tax offset and seniors and pensioners tax offset calculator (QC35434, last updated 1 July 2026). Coverage to 2025-26, and the carer, part-year resident and beneficiary offset rules.
• ATO: Medicare levy reduction for low-income earners (QC27031, last updated 30 June 2026) and Medicare levy reduction (family income) (QC27032, last updated 30 June 2026). The seniors single and family thresholds.
• ATO: Low income tax offset (QC105020, last updated 8 June 2026) and About tax offsets (QC72195, last updated 8 June 2026). LITO eligibility and non-refundable offsets.
• Federal Register of Legislation: Income Tax Assessment (1936 Act) Regulations 2025 (F2025L01060, registered 9 September 2025), sections 4 and 9 to 12. The threshold, cut-out, taper and transfer formulas, with the Explanatory Statement.
• ATO Legal Database: ITAA 1936 section 160AAAA (eligibility and the couple test), section 6(1) (rebate income) and ITAA 1997 section 63-10 (the order offsets apply in).
• ATO Legal Database: Medicare Levy Act 1986 section 3 and section 8. The seniors thresholds as amended by Act No. 58 of 2026.