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Australian Tax Rate Table

12 Sep 2014 4:40 PM - Joshua Stega, Financial Advisor Sydney

What is your tax rate?

Australia operates progressive tax system for personal income tax. This means that the more you earn, the more you pay.

The 2014/15 marginal tax rate table is provided as follows:

To provide a progressive tax system, the amount of tax you pay is divided into tax brackets. If you earn $18,200 p.a. or less, you will pay no tax. This is known as the tax free threshold. As your income increases you will fall into progressively higher tax brackets ranging from 19 cents / dollar, 32.5 cents / dollar, 37 cents / dollar and finally 45 cents / dollar earned. 

What does this mean?

For a high-income earner this means every dollar they earn over $180,001 they will pay 45 cents of that directly to the Government.

In the small print of the above table, there is a further 2% tax levied for Medicare. Medicare is the scheme that gives Australian residents access to health care. This means that you can add another two cents / dollar to the marginal tax rates outlined above.

If you want to work out your tax use one of the online calculators I recommended in a past blog post HERE


Calculate Your Average Rate of Tax

To work out exactly how much tax you are paying you want to know your average rate of tax. Your average rate of tax is, as the name suggests, the total tax you pay / your total income. Using this calculation will provide a percentage figure that you can use to complain about how much tax you pay.

Luckily there is a calculator that does just this, from the Money Smart website HERE

The Wealth Guy | Joshua Stega Financial Adviser Sydney

Joshua Stega, is head of financial advice at JAS Wealth (privately owned financial planning firm in Sydney). He helps successful individuals manage their wealth. He has a Masters in Taxation & Financial Planning, is a Fellow of the Taxation Institute, a SMSF Specialist Advisor and has significant direct investment experience.    Google+     Twitter     LinkedIn     Facebook     Instagram

M.TaxFP, LLB(Hons), B.Bus(Acc), FTI, Adv.DipFP, DipFP, SMSF Specialist