Australia

Individual - Taxes on personal income

Last reviewed - 03 July 2020

A resident individual is subject to Australian income tax on a worldwide basis, i.e. income from both Australian and foreign sources (except for certain foreign income and gains of temporary residents; see Capital gains under the Income determination section for more information).

A non-resident individual is liable to Australian income tax only on income (other than interest, royalties, and dividends, which are generally subject to withholding tax [WHT]) derived from sources in Australia, and certain statutory income that is taxable on a basis other than source (e.g. certain capital gains).

Australia has no surtaxes, alternative, or other income taxes on personal income.

Personal income tax (PIT) rates

The Australian government has implemented a seven-year Personal Income Tax Plan aimed to provide tax relief to individual taxpayers through lower PIT rates and Low and Middle Income Tax Offsets and an increase to the top threshold at which the 32.5% marginal tax rate applies. Later phases will change the thresholds for when the 32.5% and 37% marginal tax rates apply and eventually remove both of those marginal tax rates, which will result in around 94% of Australian taxpayers facing a marginal tax rate of 30% or less in the 2024/25 and later income years.

The following tables sets out the PIT rates that currently apply to resident and non-resident individuals for the years ending 30 June 2021 and 2020.

Residents

2020/21 financial year commencing 1 July 2020:

Taxable Income (AUD) Tax on column 1 (AUD) Income tax on excess (%)
Over Not over
0 18,200 - 0
18,200 37,000 - 19.0
37,000 90,000 3,572 32.5
90,000 180,000 20,797 37.0
180,000 54,097 45.0

2019/20 financial year commencing 1 July 2019:

Taxable income (AUD) Tax on column 1 (AUD) Income tax on excess (%)
Over Not over
0 18,200 - 0
18,200 37,000 - 19.0
37,000 90,000 3,572 32.5
90,000 180,000 20,797 37.0
180,000   54,097 45.0

Note: These tables do not include the Medicare levy of an additional 2% of taxable income, which applies to most residents. An additional Medicare levy surcharge of between 1% and 1.5% applies to certain higher income taxpayers not covered by health insurance for private patient hospital cover. Special rates apply to unearned income of children below the age of 18 years at year end where that income is more than AUD 416.

In addition, the above tables do not include tax offsets, including the Low and Middle Income Tax Offset (maximum of AUD 1,080) that can apply to reduce the overall tax payable for those with taxable income of less than AUD 126,000.

Non-residents

2020/21 financial year commencing 1 July 2020:

Taxable income (AUD) Tax on column 1 (AUD) Income tax on excess (%)
Over Not over
0 90,000 - 32.5
90,000 180,000 29,250 37.0
180,000 62,550 45.0

2019/20 financial year commencing 1 July 2019:

Taxable income (AUD) Tax on column 1 (AUD) Income tax on excess (%)
Over Not over
0 90,000 - 32.5
90,000 180,000 29,250 37.0
180,000   62,550 45.0

Note: Non-residents are not required to pay the Medicare levy in Australia.

The above does not take into account any tax offsets that may apply.

Working holiday makers

Special income tax rates apply to a working holiday maker who is typically an individual holding a temporary working holiday visa or a work and holiday visa in Australia. The first AUD 37,000 of a working holiday makers' income (broadly, the assessable income derived from sources in Australia, less related deductions) is taxed at 15%, with the balance taxed at ordinary rates.

Local income taxes

There are no local taxes on personal income in Australia.