Income Protection Calculator
Estimate the monthly cover you need based on your income, dependants, expenses, and debts.
Your situation
How income protection works
1. You can't work due to illness or injury
A medical certificate from your doctor establishes that you can't perform your job duties. Cover usually requires that you were working at the time you became unable to work.
2. Waiting period elapses
After your chosen waiting period (typically 30-90 days), the insurer starts paying monthly benefits. Shorter waiting periods cost more in premium.
3. Monthly benefit paid for the benefit period
Up to 70% of your pre-disability income (sometimes more for shorter benefit periods). Payments continue until you can work again, the benefit period ends, or you reach age 65/70.
4. Tax treatment
Premiums on standalone income protection (outside super) are generally tax-deductible. Benefits are taxable as income — they replace your wage, so they're taxed like a wage.
Frequently Asked Questions
Most policies cover up to 70% of your gross pre-disability income (some allow 75-85% on shorter benefit periods). The right cover amount equals your monthly take-home pay minus expenses you wouldn't have if not working (commuting, work clothing) — plus any debts you need to service.
The time between when you stop working and when income protection starts paying. Common options: 30, 60, 90 days, or 1-2 years. Longer waiting periods = lower premiums. If you have 3+ months' emergency fund, consider a 60-90 day wait.
How long the insurer will pay you for if you can't work. Common options: 2 years, 5 years, "to age 65" or "to age 70". Longer benefit periods = higher premiums but much more protection for permanent disability.
Stepped premiums start low and increase each year as you age. Level premiums stay roughly the same but start higher. Stepped is cheaper short-term; level can be cheaper over 15-25 years if you keep the policy. Most under-35s start with stepped and convert to level later.
Yes — premiums for standalone income protection (held outside super) are generally tax-deductible. Benefits paid out are then taxable as income. Cover held inside super has different tax treatment.
Inside super: premiums come from your balance (no out-of-pocket cost), but benefits face super preservation tax rules and waiting period claims can be slower. Outside super: tax-deductible premiums, more flexible terms, but you pay from take-home pay. Many people split.
Related Resources
This is general information only, not personal financial advice. Income protection products differ materially between insurers. Talk to a licensed financial adviser before purchasing cover.
Last updated: June 2026