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Individual income tax rates in Australia

What are the income tax rates set by the ATO each financial year and which bracket do you fall under?

When you earn money, you usually have to pay tax in Australia. However, knowing exactly what the Australian Tax Office (ATO) defines as earnings and working out what income tax rate you fall under can be tricky. So to make things easier, we've created an easy to follow guide. Below you'll find the income tax rates for Australian residents, foreign residents and working holiday makers for this financial year and next financial year.

What are income tax rates?

Income tax rates are used to work out the amount of tax you need to pay the Australian Tax Office (ATO) every financial year. If you earn money in Australia, you'll most likely have to pay income tax. The tax-free threshold is $18,200, so if you earn anything below that, you won't be required to pay income tax. Otherwise, the tax bracket you fall into will depend on how much you earn.

You need to pay income tax if you're working and are an Australian citizen, resident, foreign worker or visa holder (like a working backpacker).

Income tax rates and brackets in Australia

Income tax rates differ depending on your resident status. The tables below outline the tax brackets for residents, foreign residents and working holiday makers for both 2022-23 and 2023-24.

Australian Residents 2023-24

Income thresholdTax paid on income 2023/2024
$0 – $18,200Nil
$18,201 – $45,00019c for each $1 over $18,200
$45,001 – $120,000$5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000$29,467 plus 37c for each $1 over $120,000
$180,001 and over$51,667 plus 45c for each $1 over $180,000

Australian Residents 2022-23

Income thresholdTax paid on income 2022/2023
$0 – $18,200Nil
$18,201 – $45,00019c for each $1 over $18,200
$45,001 – $120,000$5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000$29,467 plus 37c for each $1 over $120,000
$180,001 and over$51,667 plus 45c for each $1 over $180,000

Foreign Residents 2023-24

Income thresholdTax paid on income 2023/2024
0 – $120,00032.5c for each $1
$120,001 – $180,000$39,000 plus 37c for each $1 over $120,000
$180,001 and over$61,200 plus 45c for each $1 over $180,000

Foreign Residents 2022-23

Income thresholdTax paid on income 2022/2023
0 – $120,00032.5c for each $1
$120,001 – $180,000$39,000 plus 37c for each $1 over $120,000
$180,001 and over$61,200 plus 45c for each $1 over $180,000

Working holiday makers 2023-2024
Applicable to workers on the 417 visa and 462 visa

Income thresholdTax to pay on this income (2023-24)
0 – $45,00015c for each $1
$45,001 – $120,000$6,750 plus 32.5c for each $1 over $45,000
$120,001 – $180,000$31,125 plus 37c for each $1 over $120,000
$180,001 and over$53,325 plus 45c for each $1 over $180,000

Working holiday makers 2022-2023
Applicable to workers on the 417 visa and 462 visa

Income thresholdTax to pay on this income (2022-23)
0 – $45,00015c for each $1
$45,001 – $120,000$6,750 plus 32.5c for each $1 over $45,000
$120,001 – $180,000$31,125 plus 37c for each $1 over $120,000
$180,001 and over$53,325 plus 45c for each $1 over $180,000

Finder survey: Did Australians in different states know that income protection is tax deductible?

Response
Yes62.4%
No37.6%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023

What is considered taxable income?

Your taxable income can include any of the following:

How do levies affect your tax rate?

Wondering where the Medicare levy comes in to all of this? We've broken it down in plain English below.

Medicare levy

The Medicare levy is what goes towards giving all Australians access to Medicare. You pay this levy in addition to the income tax you pay. All-in-all, it makes up 2% of your taxable income. Generally, your employer withholds this amount from you so that it can go towards the levy and it's calculated by the ATP when you lodge your tax return at the end of the year.

However, if you earn below a certain amount, you don't need to pay the Medicare Levy. In 2018/19, this was less than $22,399 and $35,419 for seniors and pensioners. If your income is between $22,398 and $27,997, you only need to pay part of the Medicare levy.

Medicare levy surcharge

Similarly, if you earn above a certain amount and don't have private health insurance, you need to pay an additional amount, known as the Medicare levy surcharge (MLS). Here's a breakdown of how much you might need to pay:

Income threshold for individualsIncome threshold for familiesRate of surcharge
Up to $93,000Up to $186,0000%
$93,001 – $108,000$186,001 – $216,0001%
$108,001 – $144,000$216,001 – $288,0001.25%
$144,001 and more$288,001 and more1.50%

If you purchase private health insurance, you won't have to pay the Medicare levy surcharge.

How to work out how much tax you'll pay

You can use Finder's tax calculator to work out how much tax you are likely to pay this financial year. By following the steps above of what's considered taxable income, you can enter your gross annual income into the calculator and it'll give you a tax figure based on that number. Keep in mind that it doesn't take into account your personal or financial situation, Medicare levy, capital gains tax you need to pay and various other factors outlined above, so you'll still need to put in a little research to work out how much you'll pay.

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