In Australia, a taxpayer's income is taxed progressively. Broadly, this means that as you earn more income your average tax rate rises.
Progressive taxation means that higher income earners pay more tax than lower income earners. This is achieved by taxing a range of income brackets as a set percentage or cents in the dollar. These income brackets are called tax brackets.
The rate of tax within these brackets is called the marginal rate of tax. For Australian residents, the first tax bracket, from $0 to $6,000, has a zero marginal rate of tax. Tax is applied to every dollar after this figure. This tax-free amount is called the tax-free threshold.
These rates apply to individuals who:
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2012.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $37,000 |
15c for each $1 over $6,000 |
|
$37,001 – $80,000 |
$4,650 plus 30c for each $1 over $37,000 |
|
$80,001 – $180,000 |
$17,550 plus 37c for each $1 over $80,000 |
|
$180,001 + |
$54,550 plus 45c for each $1 over $180,000 |
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2011.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $37,000 |
15c for each $1 over $6,000 |
|
$37,001 – $80,000 |
$4,650 plus 30c for each $1 over $37,000 |
|
$80,001 – $180,000 |
$17,550 plus 37c for each $1 over $80,000 |
|
$180,001 + |
$54,550 plus 45c for each $1 over $180,000 |
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2010.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $35,000 |
15c for each $1 over $6,000 |
|
$35,001 – $80,000 |
$4,350 plus 30c for each $1 over $35,000 |
|
$80,001 – $180,000 |
$17,850 plus 38c for each $1 over $80,000 |
|
$180,001 + |
$55,850 plus 45c for each $1 over $180,000 |
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2009.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $34,000 |
15c for each $1 over $6,000 |
|
$34,001 – $80,000 |
$4,200 plus 30c for each $1 over $34,000 |
|
$80,001 – $180,000 |
$18,000 plus 40c for each $1 over $80,000 |
|
$180,001 + |
$58,000 plus 45c for each $1 over $180,000 |
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2008.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $30,000 |
15c for each $1 over $6,000 |
|
$30,001 – $75,000 |
$3,600 plus 30c for each $1 over $30,000 |
|
$75,001 – $150,000 |
$17,100 plus 40c for each $1 over $75,000 |
|
$150,001 + |
$47,100 plus 45c for each $1 over $150,000 |
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2007.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $25,000 |
15c for each $1 over $6,000 |
|
$25,001 – $75,000 |
$2,850 plus 30c for each $1 over $25,000 |
|
$75,000 – $150,000 |
$17,850 plus 40c for each $1 over $75,000 |
|
Over $150,000 |
$47,850 plus 45c for each $1 over $150,000 |
The following table details the tax brackets of our progressive tax system for the financial year ending 30 June 2006.
|
Taxable income |
Tax on this income |
|
$0 – $6,000 |
Nil |
|
$6,001 – $21,600 |
15c for each $1 over $6,000 |
|
$21,601 – $63,000 |
$2,340 plus 30c for each $1 over $21,600 |
|
$63,001 – $95,000 |
$14,760 plus 42c for each $1 over $63,000 |
|
Over $95,000 |
$28,200 plus 47c for each $1 over $95,000 |
The above rates do not include the Medicare levy of 1.5%.
Tax offsets reduce the tax payable. Tax offsets based on taxable income levels apply to:
Other tax offsets apply to people with dependants, those living in remote areas and those who receive particular types of income or incur particular expenses.
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