Australia

Individual - Taxes on personal income

Last reviewed - 30 June 2021

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. The next phase of the tax cuts will eventually remove the 32.5% and 37% 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 2022.

Residents

The following table applies to the 2021/22 and 2020/21 financial years. Note also that these thresholds and rates are planned to apply until 30 June 2024.

Taxable Income (AUD) Tax on column 1 (AUD) Income tax on excess (%)
Over Not over
0 18,200 - 0
18,200 45,000 - 19.0
45,000 120,000 5,092 32.5
120,000 180,000 29,467 37.0
180,000 51,667 45.0

Note: This table does 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 table does not include tax offsets, including the Low Income Tax Offset (maximum of AUD 700 for those earning up to AUD 37,500) and 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 (note that the Low and Middle Income Tax Offset was extended to continue to apply to the 2021/22 income year). 

Non-residents

2021/22 and 2020/21 financial years:

Taxable income (AUD) Tax on column 1 (AUD) Income tax on excess (%)
Over Not over
0 120,000 - 32.5
120,000 180,000 39,000 37.0
180,000 61,200 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 45,000 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.