Tax Breakdown in Australia
|Salary Before Tax|
|Total Tax Due|
|Salary After Tax||Enter salary|
|Low Income Tax Offset|
|Your Take-Home Pay:|
|Your Gross Salary:|
|Effective Tax Rate:|
|Tax Deadline:||31 Oct|
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How to Use the Tax Calculator for Australia
Our Australian tax calculator is the easiest way to work out what you'll owe and earn. Just enter your yearly, monthly or weekly salary and let us do the maths! As a ready reckoner, the calculator will work out how much you'll take home after income tax and other deductions.
The tax calculator assumes that you are not married and have no children or other dependants. Other factors may apply and you could end up paying less tax, but our system will at least give you an indication of what you're really earning.
Who Should File a Tax Return in Australia?
You will need to lodge a tax return in Australia if you had tax withheld from your wages during the year, are an Australian resident earning an annual salary of more than $18,200, are a foreign resident who earned any income in Australia during the year, or if you are leaving Australia for more than one income year.
You will not usually need to file a tax return if you are in Australia on a working holiday earning less than $45,001 per year, or if you're a foreign resident who only earns income in Australia from interest, dividends and royalties.
If you fall into any of these categories, keep reading below to find out how to manage your taxes in Australia.
How to Lodge a Tax Return Online in Australia?
Nobody really wants to spend their time filing tax returns, and fortunately you can use Australia's online tax system — myTax — to complete all the necessary paperwork without lifting a pen. If you'd prefer, you can also file in traditional paper format or instruct a registered tax agent to file a tax return on your behalf.
When to File the Australian Tax Return?
The Australian tax year runs from 1 July to 30 June. In most cases, you will need to file a completed return with the Australian Tax Office by 31 October. This should include how much you earned during the year, and any expenses you may be able to deduct. If you end up owing money on your tax return, this will usually need to be paid by 21 November.
How Is Tax Managed in Australia?
How your tax payments are handled will depend on your employment status. The below sections explain how tax is managed and collected for most Australians.
Australian Tax Return
Taxpayers can lodge their return with the Australian Tax Office (ATO) any time after 30 June and must do so by no later than the self-lodgement deadline of 31 October. You will need to lodge a tax return if you have had tax withheld from any payments made to you during the income year, are an Australian resident with a taxable income of more than $18,200, or if you wish to claim any tax deductions. You do not need to lodge an Australian tax return if you are a working holiday maker with an annual taxable income of less than $45,001.
Pay-As-You-Go (PAYG) Tax
While Australian taxation is based on a self-assessment model, the pay-as-you-go (PAYG) withholding tax regime means that many employers deduct an amount from their employees' salary payments in lieu of tax liabilities. The amount withheld will roughly equate to each employee's tax liability, and should be remitted to the ATO.
How Much Tax Do Australians Usually Pay?
There's no average tax rate in Australia, as everyone pays based on their personal earnings. There are many jobs that pay a similar salary, however, so it makes sense that plenty of people want to know how much they'll end up taking home when earning one of the most common paychecks. To find out how your salary compares, visit our dedicated Salary Calculator in Australia page.
|Gross Salary||Take-Home Pay||Effective Tax Rate||Tax Due|
Taxes in Australia
Our simple tax calculator estimates your take-home pay after deductions have been made from your total salary. This includes income tax and Medicare Levy payments. See the tables below to find out the Australian tax rates for the current year.
Income tax is paid on all forms of personal income, including wages, business profits, and returns made from investments. Australia has a progressive tax system which means that you pay more tax as your income increases. This means you don't pay a flat rate of tax for all your earnings. Firstly, everyone can earn a certain amount of tax-free income known as a "tax-free threshold". For the 2022 – 2023 tax year, the first $18,200 you earn is tax-free. You'll then pay 19% on earnings between $18,201 and $45,000, 32.5% on earnings between $45,001 and $120,000, and 37% on earnings between $120,001 and $180,000. Anything you earn above $180,001 is taxed at 45%.
The Medicare levy is charged at 2% of your taxable income, and contributes to the costs of Australia's public health system (known as Medicare). This charge is applied in addition to any income tax you pay, although you may be entitled to a reduction or discount depending on your circumstances. You may also have to pay the Medicare levy surcharge (MLS) if your income is high enough and you, your spouse, or your dependent children aren't covered by an appropriate level of private patient hospital cover. You will not be liable to pay the MLS if you earn less than $90,000 per year (or $180,000 for families).
Superannuation (or just "super") is a compulsory system that requires Australians to put a minimum percentage of their income into a fund to support them through retirement. The money paid into your super is invested and the pot may grow over time. Most people will pay into their super via the Superannuation Guarantee ("SG"). This is an automatic salary deduction made by an employer, at the current rate of 9.5% of your annual salary.
Tax offsets (also known as rebates) can reduce the amount of tax you pay on your taxable income. The most common rebate is the low income tax offset (LITO). Tax offsets are worked out by the Australian Taxation Office after you lodge your tax return. Offsets can reduce the amount of tax you pay, but any surplus amount cannot be refunded to you. You'll usually be eligible for at least a partial LITO offset if your taxable income totals $66,667 or less.
Student Loan Repayments
Student loan repayments apply differently depending on which scheme you used to finance your education. Compulsory repayments begin for the Higher Education Loan Program (HELP) and other schemes once your income exceeds the minimum repayment threshold. Repayment income is calculated based on your taxable income, any reported fringe benefits, and superannuation contributions amongst other things.
Tax Rates for 2022 – 2023 in Australia
Australia uses a progressive tax system. This means that the more you earn, the higher your marginal rate of tax will be. As we've summarised below, all Australians can earn a basic amount of income before they're taxed, with the percentage rate applied increasing as their salary goes up.
|Australian Income Tax|
|Taxable Income||Rate Applied||Tax Payable|
|$0 to $18,200||0%||$0|
|$18,201 to $45,000||19%||19 cents for each $1 over $18,200|
|$45,001 to $120,000||32.5%||$5,092 plus 32.5 cents for each $1 over $45,000|
|$120,001 to $180,000||37%||$29,467 plus 37 cents for each $1 over $120,000|
|$180,000 or more||45%||$51,667 plus 45 cents for each $1 over $180,000|
|Australian Medicare Levy|
|Taxable Income||Rate Applied|
|$0 to $23,365||0%|
|$23,366 to $29,207||10% with potential for part reduction|
|$29,208 or more||2%|
|Low Income Tax Offset (LITO)|
|Taxable Income||Reduction Available|
|$37,500 or less||$700|
|$37,501 to $45,000||$700 minus 5 cents for every $1 above $37,500|
|$45,001 to $66,667||$325 minus 1.5 cents for every $1 above $45,000|
|$66,668 or more||$0|