Australian Tax Rates


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Income Tax Rates in Australia are normally changed every year, from the start of each Financial year, which begins in July.

Each individual is allowed to earn a certain amount each year with no tax payable, and then income tax begins to be charged at higher rates based on total earned.

Using the rates shown below, for the 2020-21 year, and examples of tax would be:

Example of Tax on a $60,000 per year income:

Total income tax on $60,000 is $9,967, or 16.61% of gross taxable income. The calculation for this is:

  • No tax on the first $18,200 = $Nil
  • 19% tax on the part between $18,201 and $45,000: $26,800 taxable = $5,092 in tax
  • 32.5% on the amount between $45,001 and $120,000: $15,000 taxable = $4,875 in tax

Total tax on the $60,000 is therefore ($5,092+$4,875) = $9,967

Example of Tax on a $200,000 per year income:

Total income tax on $200,000 is $60,667, or 30.33% of gross taxable income. The calculation for this is:

  • No tax on the first $18,200 = $Nil
  • 19.0% tax on the part between $18,201 and $45,000: $26,800 taxable = $5,092 in tax
  • 32.5% on the amount between $45,001 and $120,000: $75,000 taxable = $24,375 in tax
  • 37.0% on the amount between $120,001 and $180,000: $60,000 taxable = $22,200 in tax
  • 45.0% on the amount over $180,000: $20,000 taxable = $9,000 in tax

Total tax on the $200,000 is therefore ($5,092+$24,375+$22,200+$9,000) = $60,667

Example of Tax on a $39,200 per year income:

An adult on the Australian minimum wage would earn $39,200 in the year, and would pay $3,990 in tax, which is 10.18% of that taxable income.
The current minimum wage is $19.84 per hour, which is $39,204 per year, for the full 38 hours per week.

Notes:

These calculations do not take into account any tax rebates or tax offsets you may be entitled to.
These calculations do not take into account the Medicare levy which is calculated as 2% of taxable income for most taxpayers, or the Medicare Levy Surcharge, which may be another 1% to 1.5%, depending on personal situations.

2020/21 Tax Rates

Taxable income Tax on this income
0 to $18,200 Nil
$18,201 to $45,000 19 cents for each $1 over $18,200
$45,001 to $120,000 $5,092 plus 32.5 cents for each $1 over $45,000
$120,001 to $180,000 $29,467 plus 37 cents for each $1 over $120,000
$180,001 and over $51,667 plus 45 cents for each $1 over $180,000

Source: Australian Taxation Office

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