What are the tax brackets in Australia?
Tax brackets in Australia are set by the Federal Government and the Australian Tax Office (ATO). They determine the rate of tax that each Australian taxpayer pays based on their annual income.
Each taxpayer falls into a tax bracket in Australia. The specific bracket depends on their taxable income for the financial year. During the year, employers use these brackets to ensure you are taxed accordingly each pay period.
There are different income tax brackets for Australian residents, foreign residents and working holiday makers.
Australian resident tax tables 2020-21
If you know your annual income, have a look at the tax table below which shows you which tax bracket you’re likely to fall into.
It is important to note, that the below tax tables do not include the Medicare levy which is an additional 2% of your taxable income. For more information on the Medicare levy please click here.
In October 2020, the Federal Government announced changes to the 2020-21 tax year brackets, bringing forward tax cuts planned. You can read more about the cuts here.
| Taxable Income | Tax rate |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19% |
| $45,001 – $120,000 | 32.5% |
| $120,001 – $180,000 | 37% |
| $180,001 and over | 45% |
For Australian residents, the first $18,200 you earn comes under the tax-free threshold. Then, for every dollar you earn above $18,200 the relevant tax rates apply.
Australian resident tax tables 2019-20
Below are the Australian resident tax brackets for the 2019-20 financial year.
| Taxable Income | Tax rate |
| $0 – $18,200 | Nil |
| $18,201 – $37,000 | 19c for each $1 over $18,200 |
| $37,001 – $90,000 | $3,572 plus 32.5c for each $1 over $37,000 |
| $90,001 – $180,000 | $20,797 plus 37c for each $1 over $90,000 |
| $180,001 and over | $54, 097 plus 45c for each $1 over $180,000 |
Tax rate changes
Planned changes to the tax brackets in future years
In the 2019 budget, the Australian Government announced future planned changes to the tax brackets in Australia that will come into effect in stages in future tax years.
These changes will see the phasing out of the middle tax bracket over two planned stages. The first stage originally penned for 1 July 2022 was brought forward to 1 July 2020 and backdated. To learn learn more about the early introduction of the tax cuts read here.
The second stage is still scheduled for introduction in July 2020, please see the below tables for planned future tax bracket changes.
Tax brackets changes #2
These changes for the income tax rates are proposed to come into effect from 1 July 2024.
| Taxable Income | Tax rate |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19% |
| $45,001 – $200,000 | 30% |
| $200,001 and over | 45% |
Income tax rates for foreign residents
There are different tax brackets for people who are non-residents for tax purposes. They still declare any income earned while in Australia including employment income, rental income or any capital gains on Australian assets. However, their tax rates are different to residents.
The main difference for foreign residents is they don’t receive the tax-free threshold and often no Medicare levy tax needs to be paid (subject to holding a Medicare entitlement statement).
Foreign residents tax table 2020-21
| Taxable Income | Tax rate |
| $0 – $120,000 | 32.5c for each $1 |
| $120,001 – $180,000 | $39,000 plus 37c for each $1 over $120,000 |
| $180,001 and over | $61,200 plus 45c for each $1 over $180,000 |
Foreign residents tax table 2019-20
| Taxable Income | Tax rate |
| $0 – $90,000 | 32.5c for each $1 |
| $90,001 – $180,000 | $29,250 plus 37c for each $1 over $90,000 |
| $180,001 and over | $62,550 plus 45c for each $1 over $180,000 |
Income tax rates for working holiday makers
You are considered a working holiday maker if you have a visa subclass of:
- 417 (working holiday)
- 462 (work and holiday)
People classified as working holiday makers have an additional tax bracket to non-residents.
Working holiday makers do not receive the tax-free threshold, but the first $45,000 they earn is taxed at only 15c per dollar rather than the non-resident rate of 19c per dollar.
You can read more about working holiday maker tax here.
Working holiday maker tax table 2020-21
| Taxable Income | Tax rate |
| $0 – $45,000 | 15c for each $1 |
| $45,001 – $120,000 | $6,750 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | $31,125 plus 37c for each $1 over $120,000 |
| $180,001 and over | $53,325 plus 45c for each $1 over $180,000 |
Working holiday maker tax table 2019-20
| Taxable Income | Tax rate |
| $0 – $37,000 | 15c for each $1 |
| $37,001 – $90,000 | $5,550 plus 32.5c for each $1 over $37,000 |
| $90,001 – $180,000 | $22,775 plus 37c for each $1 over $90,000 |
| $180,001 and over | $56,075 plus 45c for each $1 over $180,000 |
Etax calculates your tax bracket automatically
The Etax online tax return includes an in-built tax calculator which uses all of the information you enter on the return to automatically calculate your tax refund.
Just add your income as well as deductions and the calculator works out which tax bracket you fall into and gives you an accurate refund estimate.
Give it a try today. It’s available online 24/7, 365 days a year!
