Income Protection Calculator Australia — FY 2025-26
Calculate your coverage needs, estimate premiums by age and occupation, and compare holding income protection inside vs outside your super fund.
Try another scenario
How to Use This Calculator
Tab "Coverage Needs"
Enter your annual salary, monthly expenses, and existing savings. The calculator determines your monthly income need at 75% of gross, how long your savings can cover expenses, and recommends a waiting period based on your financial buffer. Under "More options," adjust the waiting period tolerance and desired benefit period to see how they affect your coverage gap.
Tab "Premium Estimate"
Enter your age, gender, and occupation type (office, manual, or heavy manual). The calculator estimates your annual premium based on industry rating factors. Under "More options," set the cover amount, waiting period, benefit period, smoker status, and income to see the tax deduction at your marginal rate and the true after-tax cost of the policy.
Tab "Inside vs Outside Super"
Compare holding your income protection policy inside your super fund vs owning it directly. Enter the same personal details plus your income and super balance. The calculator shows premiums for both options, the benefit period restriction inside super (2-year APRA cap), and a recommendation based on your specific situation.
The Formulas
Annual benefit = Gross salary x 75%
Monthly benefit = Annual benefit / 12
Savings cover period:
Months covered = Existing savings / Monthly expenses
Premium estimation (simplified):
Base premium = Cover amount x Age factor x Occupation factor
Adjusted = Base x Gender factor x Waiting discount x Benefit factor x Smoker factor
Age factors: 25-34: 0.5%, 35-44: 0.8%, 45-54: 1.5%, 55-64: 2.5%
Occupation: Office 1.0x, Manual 1.5x, Heavy manual 2.0x
Gender: Male 1.0x, Female 0.85x
Waiting period discount: 14d: 1.0x, 30d: 0.85x, 60d: 0.65x, 90d: 0.50x
Benefit period: 2yr: 0.6x, 5yr: 0.8x, To age 65: 1.0x
Smoker: Non-smoker 1.0x, Smoker 1.5x
Tax deduction (outside super):
Deduction = Annual premium x Marginal tax rate
After-tax cost = Annual premium - Deduction
FY 2025-26 tax brackets (Stage 3):
$0 - $18,200: 0%
$18,201 - $45,000: 16%
$45,001 - $135,000: 30%
$135,001 - $190,000: 37%
$190,001+: 45%
Premium estimates are indicative only. Actual premiums depend on your detailed health history, occupation specifics, policy features, and the insurer. Always obtain quotes from multiple insurers or speak to a financial adviser.
Example
Sarah — Marketing Manager in Melbourne, Salary $110,000
Age 38, non-smoker, office occupation. Monthly expenses $5,500. Savings $40,000. Wants 5-year benefit period with 30-day waiting period. Cover amount: $82,500 (75% of salary).
Sarah's income protection costs just $6 per week after the tax deduction. With 7 months of savings, she could extend the waiting period to 90 days and save even more — but 30 days gives a good balance between cost and coverage speed.
Key Income Protection Facts — Australia
| Feature | Inside Super | Outside Super |
|---|---|---|
| Premium source | Super balance (pre-tax) | After-tax income (tax-deductible) |
| Benefit period | Typically 2 years (APRA cap) | 2 years, 5 years, or to age 65 |
| Premium cost | Generally lower | Higher, but tax-deductible |
| Benefit payment | May go to super fund first | Paid directly to you |
| Policy control | Limited — fund chooses insurer | Full control — you choose insurer and features |
| Impact on retirement | Reduces super balance | No impact on super |
| Tax on benefits | Taxed as income | Taxed as income |