Income Tax in Australia 2021 – 2022.
- A resident taxpayer in Australia who earns $18,200 or under, in the year, will pay NO tax on that income.
- If the annual income is $39,200 then the tax payable is $3,990. This is 10.18% of Taxable Income.
- At an income of $60,000 the tax will be $9,967. This is 16.61% of Taxable Income.
- For a higher earner at $200,000 the tax will be $ $60,667. This is 30.33% of Taxable Income.
Some people are entitled to a higher Tax Free Threshold, such as Aged pensioners, by the use of various offsets. (SAPTO)
Special rules apply to income earned by people under 18 years old and, in some cases, some of their income may be taxed at a higher rate than an adult.
2021-2022 Tax Rates for Earners classed as Tax-Resident.
| 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
The above rates do not include the Medicare Levy of 2%, or the Medicare Levy Surcharge.
Tax File Numbers.
Every income earner in Australia should have a tax reference number, called a Tax File Number, and when this is quoted to Employees and Banks (for interest payments), etc., tax is deducted from income at the current rates.
If a Tax File Number (TFN) is not quoted, then tax is deducted at the maximum rate.
You can apply for a tax file number (TFN) online only if you are currently in Australia and you have:
- a valid permanent migrant visa, or
- a valid visa with work rights, or
- a valid overseas student visa, or
- a valid visa allowing you to stay in Australia indefinitely.
Tax Return.
Every taxpayer must complete an Annual Tax Return, and this calculates any differences in tax over or under paid.
Most people need to submit their Tax return by the last day of October each year, but there are extensions for those who lodge via a Tax Agent.
Some Non-Tax payers should also complete an annual Tax Return, as they may be entitled to a rebate, even without paying anything.
Most Australians end up paying more tax, during the year, than they should, due to various allowances being only claimable at the end of the year, such as Sun Screen protection for outside workers, overtime meal allowance, and various other allowances, and they end up receiving a Tax Rebate shortly after submitting the Annual Tax Return. (This is often within 14 days).
Sources:
ATO:
ato.gov.au/…/Individual-income-tax-rates
Tax rates for Under 18 years of age:
ato.gov.au/…/Your-income-if-you-are-under-18-years-old
Tax rates for Working holiday makers:
ato.gov.au/…/Working-holiday-makers