Australian Tax Rates

The tax rates in Australia for individuals apply on a progressive basis, with the marginal rate determined by the level of income.

Resident adult taxpayers (that is taxpayers who are determined to be resident for tax purposes) receive the benefit of a tax free amount, and are (in general) taxed on their world-wide income.

Taxpayers deemed to be non-resident for taxation purposes, do not receive a tax free amount, and are generally taxed from their first dollar of their Australian source income.

Although strictly not income tax as such, the medicare levy, and the medicare levy surcharge accompanies the taxation scale as an additional  impost and is collected with each taxation assessment, and through taxes withheld from wages and similar earnings.

Medicare exemptions and reductions are available based on the taxpayer’s income level, marital and health insurance status, such that total levies can in practice vary between zero and 3.5% in total. There have been a number of alterations to the medicare formulae in the past several years.

Children are subject to specific rules which generally tax their non-wage income at a higher rate until they reach the age of 18 years as at the end of the income year (30 June).

Capital gains tax is determined by reference to the profits (and offsetting losses) generated from the sale of capital assets.

There is no separate capital gains tax as such; the capital gains tax rules operate to determine the amount, if any, of capital profit to be added to ordinary income which is then taxed according to the normal progressive tax scale.

Non-individual entities are each separately dealt with by the taxation rules, such that:

  • companies (and other forms of corporate entity) are with some exceptions taxed at a flat percentage rate. From 1 July 2015 a lower rate applies to small business companies.
  • trusts are in general only taxed on income which is accumulated (generally at the highest marginal tax rate), i.e. that income which is not fully distributed to the trust beneficiaries.

This page was last modified on 10 August 2015