Lesson 3: From Gross Pay to Take-Home Pay

Prepared by Chloe Hsieh

Year level: Year 10 (middle ability set)Duration: 60 minutesFocal concept/topic: Earning money: pay periods, leave loading, PAYG tax and net pay

Lesson aim:

Convert pay between weekly, fortnightly, monthly and yearly amounts, calculate leave loading, and use the ATO weekly tax table to find take-home pay, so that students can answer Lesson 1's question "Which job pays the most?"

Learning intention:

We are learning to convert pay between time periods, calculate leave loading, and use the ATO tax table to work out net pay.

Success criteria:

□ I can convert pay between weekly, fortnightly, monthly and yearly amounts using 1 year = 52 weeks, and explain why monthly pay is not 4 × weekly pay
□ I can calculate leave loading as a percentage of normal pay for the leave period
□ I can read the ATO weekly tax table to find the tax withheld
□ I can calculate net pay by subtracting the tax withheld from gross pay

Syllabus outcomes and content:

NSW Education Standards Authority (NESA, 2022)

MA5-FIN-C-01: solves financial problems involving simple interest, earning money and spending money
MAO-WM-01: develops understanding and fluency in mathematics through exploring and connecting mathematical concepts, choosing and applying mathematical techniques to solve problems, and communicating their thinking and reasoning coherently and clearly
Content:
- Calculate weekly, fortnightly, monthly and yearly earnings assuming 1 year = 52 weeks
- Calculate leave loading by finding a percentage of eligible normal pay
- Investigate sources of published tables or online calculators and use these to calculate the weekly, fortnightly or monthly tax to be deducted from a worker's pay under the Australian Pay-As-You-Go (PAYG) taxation system
- Calculate net earnings after deductions and taxation

Working Mathematically indicators:

Explain why monthly pay is not four times weekly pay (Converting pay periods)
Compare two jobs by converting their pay to the same time period (Converting pay periods, closure)
Read the correct row and column of a published table and check that the result is reasonable (PAYG tax table)
Carry out a multi-step calculation from yearly salary to net weekly pay and leave pay (Putting it together)

ICT:

None in this lesson.

LIT:

Build a "pay words" list on the board as each term appears: per annum, fortnight, annual leave, leave loading, gross, net, tax withheld, tax-free threshold
Read the column headings of the ATO tax table aloud with the class and say what each one means in everyday words
Students write the answer to the unit question in one full sentence that includes both gross and net weekly pay

Prerequisite knowledge:

From Lesson 1: wage, salary and commission calculations
From Lesson 2: pay = base rate × multiplier × hours
Finding a percentage of an amount
Reading a table

Resources:

Slides
Extract of the ATO Weekly tax table (NAT 1005, applies to payments made from 1 July 2026), covering weekly earnings $340 to $1,150. The ATO allows its material to be copied and adapted.
Worksheet (Q1–Q4 and extension)
Exit ticket
Calculators
Mini whiteboards

Before the lesson:

Print the tax table extract from the ATO PDF (NAT 1005). Check that the rows used in this lesson are on it: $350, $575, $576, $600, $700, $800, $900, $950, $1,000 and $1,125.

Labels used in this plan: WM Working Mathematically LIT Literacy ICT Technology AfL Assessment for learning AoL Assessment of learning

Key teacher question → Expected: suggested student response. Self-designed WM indicators are in italics.

Teaching sequence

Steps & timing	Teaching & learning activities
ORIENTATION0–8 minStarter: back to the job adsAfLWM	Teacher Show two retrieval questions, oldest first. Give more time to the one that matches the largest error pile from the Lesson 2 exit tickets. (Lesson 1) Jess earns a $400 retainer plus 5% commission. This week she sold $6,000 of phones. What is her pay? (Lesson 2) Ella's base rate is $25. How much does she earn for 4 hours on Saturday at time and a half? Then show today's question, from the Lesson 1 hook: "The barista earns $25 per hour. The office assistant earns $58,500 p.a. Which one earns more?" Key question: Can we answer today's question yet? What is stopping us? Expected: Not yet. One is per hour and one is per year. We need to know the barista's hours, and we need both jobs over the same time period. Reveal the learning intention and success criteria. Tell the class that today's question gets answered by the end of the lesson. Students Answer questions 1 and 2 on mini whiteboards, then suggest what is needed for today's question.
ENHANCING8–20 minConverting pay periodsLITWMAfL	Teacher LIT Add "per annum (p.a.)" and "fortnight" to the pay words list. Model weekly and fortnightly pay for the office assistant. The syllabus uses 1 year = 52 weeks, and 1 fortnight = 2 weeks. Model: office assistant, $58,500 p.a. Weekly: $58,500 ÷ 52 = $1,125 Fortnightly: $1,125 × 2 = $2,250 AfL Before showing monthly pay, students estimate the office assistant's monthly pay on whiteboards and hold them up. Write the answers on the board without names. Many will write 4 × $1,125 = $4,500. Then work it out from the yearly amount, using 12 months in a year: $58,500 ÷ 12 = $4,875. Key question: Why do the two methods give different answers, $4,500 and $4,875? Expected: A month is not exactly 4 weeks. A year has 52 weeks but only 12 months, so a month is about 52 ÷ 12 ≈ 4.33 weeks. Using 4 weeks leaves out $375 each month. Then model the barista. Model: barista, $25 per hour, working 38 hours a week Weekly: $25 × 38 = $950 Yearly: $950 × 52 = $49,400 Key question: Now can we answer today's question? Expected: Yes, if the barista works 38 hours a week. The office assistant earns $1,125 per week and the barista earns $950, so the office assistant earns $175 more per week. We do: Jess earns $700 per week. Students find her yearly and monthly pay on whiteboards before the answer is shown. Students Estimate the monthly pay before it is shown, copy the models, then complete the "we do" on whiteboards.
ENHANCING20–28 minAnnual leave and leave loadingLITWM	Teacher Explain the rules in the Fair Work Ombudsman's words. Full-time and part-time employees get 4 weeks of paid annual leave each year, and casual employees do not (Fair Work Ombudsman, 2026). Some awards also pay an extra amount during leave, called leave loading. In the General Retail Industry Award it is 17.5% (Fair Work Commission, 2026, cl. 28.3). LIT Add "annual leave" and "leave loading" to the pay words list. Model: Priya is a full-time retail worker covered by the General Retail Industry Award. Her normal pay is $1,000 per week, and she works weekdays only. She takes 4 weeks of annual leave. Normal pay for 4 weeks: $1,000 × 4 = $4,000 Leave loading: 17.5% of $4,000 = 0.175 × $4,000 = $700 Total paid for her leave: $4,000 + $700 = $4,700 Key question: Is the 17.5% worked out on one week's pay or on the whole leave period? Expected: On the normal pay for the whole leave period, which here is 4 weeks. Key question: Ella is a casual barista. Does she get leave loading? Expected: No. Casual employees do not get paid annual leave, so there is no leave loading for them. Students Copy the model and answer when named. Teacher note: Clause 28.3 pays whichever is greater, a 17.5% loading or the penalty rates the worker would have earned for those ordinary hours. Priya works weekdays only, so the 17.5% applies.
ENHANCING28–43 minPAYG tax and the ATO tax tableLITWMAfL	Teacher Explain PAYG in plain words. Under Pay As You Go, the employer takes some tax out of each pay and sends it to the ATO. Gross pay is the pay before tax. Net pay, or take-home pay, is what is left after the tax withheld is taken out. LIT Turn "tax withheld" back into a sentence with the class: "the tax the employer keeps back from each pay". Explain the tax-free threshold with one number. For most Australian residents, the first $18,200 they earn in a year has no income tax (Australian Taxation Office, 2026b). Ask: "Using 52 weeks, how much is that per week?" ($18,200 ÷ 52 = $350.) A worker chooses whether to claim it on the tax file number (TFN) declaration they give their employer (Australian Taxation Office, 2026b). LIT Hand out the tax table extract and read the column headings aloud together: "Weekly earnings", "With tax-free threshold", "No tax-free threshold". Look up $350 together. Column 2 shows $0.00 and column 3 shows $62.00. Ask what the difference tells us. In the rest of this lesson every worker has claimed the tax-free threshold, so we use column 2. Key question: For a $350 week, why is column 2 $0 but column 3 $62? Expected: $350 a week is about the tax-free amount, so a worker who has claimed the tax-free threshold has no tax taken out. A worker who has not claimed it has tax taken from every week. Model: office assistant, gross $1,125 per week Find $1,125 in the "Weekly earnings" column and read column 2. Tax withheld = $178. Net pay = $1,125 − $178 = $947 Key question: Is $178 the tax for the whole year? Expected: No. It is the tax withheld from one week's pay. We do: Ella's week from Lesson 2 earned $575. Students find the tax withheld and her net pay. (Expected: $36 withheld, net $539.) You do (worksheet): Q1. Jess earns $700 this week. Find the tax withheld and her net pay. Q2. Mia's week in Lesson 2 earned $576, which is $1 more than Ella's. Find the tax withheld and her net pay. Did the extra $1 change the tax? Q3. Priya's normal week is $1,000. Find the tax withheld and her net pay. Q4. Look up $600 in both column 2 and column 3. Which column withholds more tax, and by how much? AfL Circulate. Check that students read across the correct row, and that they subtract the tax instead of adding it. Prompt with: "Should net pay be more or less than gross pay?" Students Complete the "we do", then Q1–Q4 on their own. Teacher note: Column 2 stays at $0.00 a little past $350. On this table the first dollar of tax in column 2 is withheld at $365. If students notice, explain that the table is built from ATO formulas, and the exact tax for the year is worked out later in a tax return.
ENHANCING43–50 minPutting it togetherWMAfL	Teacher Set one multi-step problem that uses all three lessons. Students work in pairs, but each student writes their own working. Task: Sam works weekday shifts only and earns a salary of $46,800 per year. He has claimed the tax-free threshold. (a) What is Sam's gross weekly pay? (b) Use the tax table to find his tax withheld and net weekly pay. (c) Sam's award pays 17.5% leave loading. How much is he paid in total for 4 weeks of annual leave? Extension: Using 1 year = 52 weeks, how many weeks long is an average month? Use your answer to explain why "monthly pay = 4 × weekly pay" always gives too little. Students Work in pairs and check each other's table reading.
SYNTHESIZING50–60 minAnswering the unit question, and exit ticketAoLAfLLIT	Teacher Return to the Lesson 1 job ads. Key question: So which job pays the most: the barista working 38 hours a week, or the office assistant? Expected: The office assistant. Gross weekly pay is $1,125 against $950. After tax the office assistant takes home $947 and the barista $828. LIT Students write the answer in one full sentence that includes both gross and net pay. Go back to the success criteria. Students tick the ones they can now do on their exit ticket. Hand out the exit ticket (tax table extract and calculator allowed). Collect it before students leave. Preview the next lesson: "The tax withheld each week counts towards the tax you owe for the year. Next we look at how yearly taxable income is worked out." Exit ticket (a) Lucas earns $41,600 per year. What is his gross weekly pay? (b) Use the tax table (tax-free threshold claimed) to find his net weekly pay. (c) Tim says Lucas's monthly pay is 4 × his weekly pay. Write one sentence explaining why this is wrong. (d) Find each person's pay. (i) Jess earns a $400 retainer plus 5% commission. This week she sold $5,000 of phones. (ii) Ella's base rate is $25. She works 4 hours on Sunday at double time. Success criteria: tick the ones you can now do. For any you cannot tick, write the step that is still unclear. After the lesson AoL Mark the exit tickets against the success criteria of Lessons 1–3 and record each student's result. Part (d) checks commission (Lesson 1) and penalty rates (Lesson 2). AfL Read the unticked success criteria alongside the answers. Note whether errors are in converting periods, reading the table, or subtracting. Use this to plan the starter for the next lesson.

Worked solutions

Task / question	Worked solution
Starter 1	0.05 × $6,000 = $300. $400 + $300 = $700
Starter 2	$25 × 1.5 = $37.50 per hour. $37.50 × 4 = $150
Today's question	Cannot answer yet. The hourly and yearly amounts need the barista's hours and a common time period.
Office assistant	Weekly $58,500 ÷ 52 = $1,125. Fortnightly $1,125 × 2 = $2,250. Monthly $58,500 ÷ 12 = $4,875
Monthly estimate	4 × $1,125 = $4,500, which is $375 less than $58,500 ÷ 12 = $4,875
Barista (38 h)	$25 × 38 = $950 per week. $950 × 52 = $49,400 per year
We do (Jess)	Yearly $700 × 52 = $36,400. Monthly $36,400 ÷ 12 = $3,033.33
Priya's leave	$1,000 × 4 = $4,000. 0.175 × $4,000 = $700 loading. Total $4,700
Tax-free threshold per week	$18,200 ÷ 52 = $350. Table, $350: column 2 $0.00, column 3 $62.00
Office assistant tax	Table, column 2, $1,125: $178. Net $1,125 − $178 = $947
We do (Ella)	Table, $575: $36. Net $575 − $36 = $539
Q1 (Jess)	$700: $65. Net $635
Q2 (Mia)	$576: $36, the same as Ella's $575. Net $540. The extra $1 does not change the tax, because in this part of the table the tax only goes up by $1 every few dollars of pay
Q3 (Priya)	$1,000: $138. Net $862
Q4	$600: column 2 $42, column 3 $120. Column 3 withholds $78 more
Putting it together (a)	$46,800 ÷ 52 = $900
Putting it together (b)	Table, $900: $106. Net $900 − $106 = $794
Putting it together (c)	4 weeks of normal pay: $900 × 4 = $3,600. Loading: 0.175 × $3,600 = $630. Total $4,230
Extension	52 ÷ 12 ≈ 4.33 weeks. A month is longer than 4 weeks, so 4 × weekly pay leaves out about a third of a week's pay each month.
Closure	Office assistant $1,125 gross, $947 net (table $178). Barista $950 gross, $828 net (table $122).
Exit ticket (a)	$41,600 ÷ 52 = $800
Exit ticket (b)	Table, $800: $83. Net $800 − $83 = $717
Exit ticket (c)	A month is about 4.33 weeks, not 4, because a year has 52 weeks but 12 months. So 4 × weekly pay is too small.
Exit ticket (d)	(i) 0.05 × $5,000 = $250. $400 + $250 = $650. (ii) $25 × 2 = $50 per hour. $50 × 4 = $200

All tax amounts are read from the ATO Weekly tax table NAT 1005, which applies to payments made from 1 July 2026 (Australian Taxation Office, 2026a).

Adjustments and anticipated misconceptions

Misconception	Why students think this	How this lesson addresses it
A month is 4 weeks, so monthly pay = 4 × weekly pay	People often say "a month is four weeks", and a 28-day February is exactly 4 weeks.	Students' own monthly estimates compared with $58,500 ÷ 12. Extension: 52 ÷ 12 ≈ 4.33. Exit ticket (c).
Net pay is more than gross pay, or tax is added	In everyday English "gross" means disgusting and "net" sounds like a fishing net, so neither word hints at its meaning for pay.	The gross–net diagram. The prompt "Should net pay be more or less than gross pay?".
Tax withheld from one week is the tax for the year	The table gives one number and students read it as "the tax".	Key question "Is $178 the tax for the whole year?". Preview of Lesson 3b.
The tax-free threshold means the whole pay is tax-free, or it is a form of tax	The phrase is abstract and long.	Explained with one number ($18,200 a year = $350 a week), then seen in the table at $350 (column 2 $0, column 3 $62).
Leave loading is worked out on one week's pay	Students are used to weekly amounts from Lessons 1 and 2.	Key question "one week or the whole leave period?".
Every worker gets annual leave and leave loading	Students' part-time jobs are often casual, and the rule is not obvious.	Key question about Ella as a casual worker, using the Fair Work Ombudsman wording.

Students who need…	Adjustment
more support	A ruler or strip of paper to read across one row of the tax table. The worksheet starts with Ella's line worked out in full (Net pay = $575 − $36 = $539), then gives "Net pay = ____ − ____" for each question.
more challenge	The extension (weeks in a month) and the full Sam problem.
language and literacy support, including EAL/D	The pay words list stays on the board with the gross–net diagram. Table headings are read aloud and put into everyday words.

Vocabulary

Term	Definition	Image
gross pay	Pay before any tax is taken out	Diagram below
net pay (take-home pay)	Pay left after tax and other deductions are taken out	Diagram below
per annum (p.a.)	Per year
fortnight	Two weeks
PAYG withholding	Pay As You Go: the employer takes some tax out of each pay and sends it to the ATO
tax withheld	The amount of tax taken out of one pay	Table extract below
tax-free threshold	For most Australian residents, the first $18,200 of yearly income, on which no income tax is paid. Claiming it means less tax is taken out of each pay
annual leave	Paid time off work. Full-time and part-time employees get 4 weeks a year, but casual employees do not
leave loading	An extra payment during annual leave, worked out as a percentage of normal pay (17.5% in the General Retail Industry Award)

Gross pay split into net pay and tax withheld

Part of the ATO weekly tax table with the $575 row highlighted

Image credits:

Tax table: extract from NAT 1005 (Australian Taxation Office, 2026a), with the $575 row highlighted. The ATO allows its material to be copied and adapted.
annual leave: "Sun loungers" by Ed.ward, CC BY-SA 2.0. https://www.flickr.com/photos/44423341@N00/5478649673

Sources acknowledged in this lesson

Australian Taxation Office. (2026a). Pay as you go (PAYG) withholding: Weekly tax table (NAT 1005). Applies to payments made from 1 July 2026. https://www.ato.gov.au
Australian Taxation Office. (2026b). How to claim the tax-free threshold. https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/tax-free-threshold/how-to-claim-the-tax-free-threshold
Fair Work Commission. (2026). General Retail Industry Award 2020 [MA000004], cl. 28. https://awards.fairwork.gov.au/MA000004.html
Fair Work Ombudsman. (2026). Annual leave. https://www.fairwork.gov.au/leave/annual-leave
NSW Education Standards Authority. (2022). Mathematics K–10 syllabus: Stage 5, Financial mathematics A. https://curriculum.nsw.edu.au/learning-areas/mathematics/mathematics-k-10-2022/content/stage-5/facb3aa952
Names and figures other than the ATO and Fair Work figures are made up for classroom use.

Further lessons page: Lesson 3b (outline only)

Lesson 3b: Taxable income. Students work out annual taxable income by subtracting allowable deductions from yearly income. They use the ATO resident tax rates for 2026–27 to find the tax payable for the year, then compare it with the PAYG tax withheld across the year from Lesson 3 to see why a tax return can lead to a refund or a bill.