Australian Financial Glossary
Last verified · Methodology
Fifteen essential Australian financial terms explained in plain English. From home loans and stamp duty to superannuation and CGT, each definition includes a worked example and a link to the relevant free calculator.
Home Loans and Property(4)
Home Loan (Mortgage)
A loan secured against residential property used to finance the purchase of a home in Australia, commonly referred to as a home loan or mortgage.
Try the Australian Mortgage Calculator→Loan-to-Value Ratio (LVR)
The ratio of a home loan amount to the appraised value of the property, expressed as a percentage. In Australia the term LVR (not LTV) is used universally.
Try the Australian Mortgage Calculator→LVR (Loan-to-Value Ratio)
Australian shorthand for Loan-to-Value Ratio: the proportion of a property's value you are borrowing. LMI is typically required above 80% LVR.
Try the Australian Mortgage Calculator→Offset Account
A transaction account linked to a home loan where the account balance offsets the loan principal, reducing the interest charged each day.
Try the Australian Mortgage Calculator→Tax and Income(5)
Stamp Duty (Transfer Duty)
A state government tax payable on the transfer of real property in Australia. Rates vary significantly by state and territory.
Try the Stamp Duty Calculator→HECS-HELP Debt
An Australian government student loan scheme (Higher Education Contribution Scheme / Higher Education Loan Program) that defers tuition fees, repaid via the tax system once income exceeds the repayment threshold.
Try the Take-Home Pay Calculator→PAYG Withholding
Australia's pay-as-you-go tax withholding system. Employers withhold income tax from employees' wages each pay period and remit it to the ATO on the employee's behalf.
Try the Take-Home Pay Calculator→Medicare Levy
A 2% tax on taxable income that funds Australia's public health system (Medicare). Low-income earners may be fully or partially exempt. High earners without private hospital cover pay an additional Medicare Levy Surcharge (MLS) of 1-1.5%.
Try the Australian Income Tax Calculator→Low Income Tax Offset (LITO)
A non-refundable tax offset for low and middle income earners in Australia that reduces the amount of income tax payable. The maximum LITO for 2025/26 is $700.
Try the Australian Income Tax Calculator→Superannuation(4)
Superannuation (Super)
Australia's compulsory retirement savings system. Employers must contribute a percentage of an employee's ordinary time earnings into a super fund. The Superannuation Guarantee (SG) rate is 12% from 1 July 2025.
Try the Superannuation Calculator→Concessional Contribution
Super contributions made from pre-tax income, taxed at 15% inside the fund. The annual cap for 2025/26 is $30,000 (combined employer plus personal deductible).
Try the Superannuation Calculator→Non-Concessional Contribution
Super contributions made from after-tax income that are not taxed again when they enter your fund. The annual cap for 2025/26 is $120,000.
Try the Superannuation Calculator→First Home Super Saver (FHSS)
A government scheme allowing first home buyers to save a deposit inside their super fund, taking advantage of the concessional 15% super tax rate. Up to $50,000 can be released.
Try the Superannuation Calculator→Savings and Investment(2)
CGT Discount
Australian individuals who hold a capital gains asset for more than 12 months are entitled to a 50% capital gains tax (CGT) discount. Only half the capital gain is added to taxable income.
Try the Capital Gains Tax Calculator→Negative Gearing
A property or investment is negatively geared when its deductible expenses (including loan interest) exceed rental or investment income. The net loss is deductible against other income, reducing taxable income.
Try the Capital Gains Tax Calculator→Need to calculate something? Visit the Australian calculators hub for our full suite of free Australian financial tools, or browse the US financial glossary for American financial terms.