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how much tax do you pay in australia

You pay income tax in Australia on a sliding scale, so the exact amount depends on how much you earn, your residency status, and a few extras like the Medicare levy and any offsets.

Current income tax rates (Australian residents)

For the 2024–25 and 2025–26 financial years, the main individual income tax brackets for Australian residents are:

  • 0 – 18,200 AUD: 0% (no tax)
  • 18,201 – 45,000 AUD: 16% on each dollar over 18,200 AUD
  • 45,001 – 135,000 AUD: 30% on each dollar over 45,000 AUD, plus 4,288 AUD
  • 135,001 – 190,000 AUD: 37% on each dollar over 135,000 AUD, plus 31,288 AUD
  • 190,001 AUD and over: 45% on each dollar over 190,000 AUD, plus 51,638 AUD

These rates do not include the Medicare levy, which is generally 2% of your taxable income for most people, depending on your income and family situation.

Simple example: “How much tax do I pay?”

Let’s say you are an Australian resident with a taxable income of 60,000 AUD in 2025–26:

  1. First 18,200 AUD taxed at 0% → 0 AUD.
  2. Next 26,800 AUD (18,201–45,000) taxed at 16% → 4,288 AUD.
  3. Remaining 15,000 AUD (45,001–60,000) taxed at 30% → 4,500 AUD.
  4. Base income tax = 8,788 AUD.

If you then add a 2% Medicare levy on 60,000 AUD (1,200 AUD), total tax plus Medicare is about 9,988 AUD, which is an effective rate of roughly 16.65% of your income.

So even though part of your income is in a 30% bracket, the average tax rate on your whole income is much lower.

Quick HTML table of the main brackets

Below is an HTML table version of the resident income tax scale (excluding Medicare and offsets):

html

<table>
  <thead>
    <tr>
      <th>Taxable income (AUD)</th>
      <th>Tax on this income</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>0 – 18,200</td>
      <td>Nil</td>
    </tr>
    <tr>
      <td>18,201 – 45,000</td>
      <td>16c for each $1 over 18,200</td>
    </tr>
    <tr>
      <td>45,001 – 135,000</td>
      <td>$4,288 plus 30c for each $1 over 45,000</td>
    </tr>
    <tr>
      <td>135,001 – 190,000</td>
      <td>$31,288 plus 37c for each $1 over 135,000</td>
    </tr>
    <tr>
      <td>190,001 and over</td>
      <td>$51,638 plus 45c for each $1 over 190,000</td>
    </tr>
  </tbody>
</table>

This reflects the current Stage 3 tax settings that apply for 2024–25 and 2025–26.

Why it’s a trending topic now

People in Australia are talking about “how much tax you pay” because:

  • The Stage 3 tax changes reshaped the brackets from July 2024, cutting rates in the middle-income ranges and shifting thresholds.
  • The government has signalled further cuts in coming years (for example, reducing the 16% bracket to 15% from 1 July 2026, and then 14% later), so people are trying to work out their future take‑home pay.
  • Online tax calculators and media articles are showing before‑and‑after examples so workers can see whether they are “better off” compared with previous years.

In forum discussions and comment sections, you’ll often see people comparing:

  • Their marginal rate (the rate on their last dollar) vs their effective average rate.
  • How much extra they’ll keep per year after the latest changes.
  • Whether the cuts favour low, middle or higher income earners.

A common theme in those discussions: someone on, say, 80,000 AUD might gain several hundred dollars a year from the newer brackets because more of their income is taxed at the reduced mid-tier rates.

Key things that change your actual tax

Even with the brackets above, what you pay changes with:

  1. Residency status
    • Non-residents have different rates and usually no tax-free threshold.
  2. Medicare levy and surcharges
    • Standard levy is usually 2% of taxable income, with surcharges for higher-income people without private health insurance.
  1. Tax offsets and deductions
    • Low Income Tax Offset (LITO), work-related deductions, and other offsets can reduce the final amount.
  1. Year-to-year policy changes
    • Government budgets can tweak thresholds or rates (as they did with Stage 3 and scheduled later cuts), so “how much tax you pay in Australia” is a moving target over time.

TL;DR: To know how much tax you pay in Australia, match your taxable income to the brackets above, add the Medicare levy if it applies, and factor in any offsets or deductions. For exact numbers, you’d plug your income into a current Australian tax calculator or the ATO’s tools.

Information gathered from public forums or data available on the internet and portrayed here.