Tax & Income
Income Tax
Progressive tax rates applied to salary and wage income, plus the Medicare levy.
What it is
Income tax is what the Australian government charges on income you earn, including salary, wages, and other assessable income. Australia uses a progressive system: rates increase in bands as your income rises, and you only pay the higher rate on the portion of income within that band, not your whole income.
Who it applies to
Australian resident and foreign resident individual taxpayers earning salary, wages, or other assessable income. Rates and the tax-free threshold differ for foreign residents.
Key figures
- Tax-free threshold (residents)
- $18,200
- 15% bracket
- $18,201 – $45,000
- 30% bracket
- $45,001 – $135,000
- 37% bracket
- $135,001 – $190,000
- 45% bracket
- $190,001+
Important limitations
Does not include the Medicare Levy Surcharge, HELP/HECS repayments, or income from investments, rental property, or capital gains — see the dedicated Medicare Levy, HELP/HECS, and Capital Gains Tax references for those.
Official sources
- Australian Taxation Office (ATO) - Tax rates for Australian residents, Medicare levy, and HELP repayment thresholds
Educational information only, not financial advice.
Related calculators
Want the full explanation?
How Australian Income Tax WorksMore in Tax & Income
- Medicare LevyA 2% levy on taxable income that funds Medicare, plus a surcharge for higher earners without private hospital cover.
- GST (Goods and Services Tax)A flat 10% tax on most goods and services, and the $75,000 turnover threshold that requires a business to register.
- Capital Gains Tax (CGT)Tax on the profit made when you sell an asset, with a 50% discount for individuals who held it over 12 months.