In Australia, Income tax is one of the vital source of revenue for Federal Government, collected on behalf of ATO. It is levied at progressive rates, depending on income, residency status and government debts.
In Australia, Income tax is one of the vital source of revenue for Federal Government, collected on behalf of ATO. It is levied at progressive rates, depending on income, residency status and government debts.
Australian residents for tax purpose are exempted from tax if annual gross income is less than $18200. For income of more than $18200, tax is levied at different rates.
Resident Tax Rates 2020 - 2021
| Taxable Income | Tax |
|---|---|
| $0 – $18,200 | NIL |
| $18,201– $45,000 | 19c for each $1 over $18,200 |
| $45,001 - $120,000 | $5092 plus 32.5c for each $1 over $45,000 |
| $120,001 - $180,000 | $29,467 plus 37c for each $1 over $120,000 |
| More than $180,000 | $51,667 plus 45c for every $1 over $180,000 |
Unlike Department of Home Affairs, a person can be ,
Resident for tax purpose in ATO records even if they don’t have Australian permanent visa or Australian Passport, OR
Non-resident for tax purpose even if they have visa to visit Australia.
Usually, a person with less than 6 months visa is considered as Non-Resident for tax purpose.You can
Check your eligibility here.
Working holiday makers or Backpackers are people who are holder of visa subclass 417 or 462 visa.For Backpackers, first $45000 is taxed at 15% and any amount earned after that is taxed at resident tax rates.
Check your visa status here.
NOTE: Non-residents and Backpackers are not eligible for any Tax free threshold and Tax Offsets.
Non-Resident Tax Rates 2020 - 2021
| Taxable Income | Tax |
|---|---|
| $0 – $120,000 | 32.5c for each $1 |
| 120,001 - $180,000 | $39,000 plus 37c for each $1 over $120,000 |
| More than $180,000 | $61,200 plus 45c for every $1 over $180,000 |
Backpackers Tax rates for 2020 - 2021
| Taxable Income | Tax |
|---|---|
| $0 – $45,000 | 15c for each $1 |
| $45,001 - $120,000 | $6750 plus 32.5% on each $1 over $45,000 |
| $120,001 – $180,000 | $31,125 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $53,325 plus 45 cents for each $1 over $180,000 |
Low Income Tax Offset (LITO) is available to residents for tax purpose if taxable income is less than $66,667.A person is eligible for maximum of $445 LITO if taxable income is less than $37000. For each dollar over $37000, this amount is reduced by 1.5 cents.
In addition to LITO, Low and Middle Income Tax Offset (LAMITO) is available to residents for tax purpose if taxable income is less than $126,000.A person is eligible for minimum of $255 and maximum of $1080 LAMITO.
For more information on Tax offsets, visit ATO.
Superannuation is the certain amount of money paid by your employer in your superannuation account in addition to your salary. Current standard rate for superannuation is 9.5% of your taxable income. However, some employers pay more than 9.5%. This amount is accessible only at the time of your retirement or if you are leaving country permanently.
From July 2021, superannuation is guaranteed to increase by 0.5% every financial year until it reaches 12% in July 2021.
Some companies offer a salary package where 9.5% of superannuation is included in it. For this scenario, you need to check “Incudes Super” in options when using our Calculator
For more informaton, visit ATO.
Medicare is Australian health support program which allows Australian residents to access free medical facilities.Every taxpayer who is enrolled in this program pays 2% of taxable income to support Medicare scheme.
For singles earning more than $90000 and couples earning more than $180000, there's an additional
Medicare Levy Surcharge (MLS)
of upto 2%.
From 1st July 2019, all study and training loans including HELP, VSL, SFSS, SSL, ABSTUDY SSL, TSL have to be paid back if taxable income is more than $45880.
Below is the Loan repayment threshold table for 2019 - 2020 tax year.
| Taxable Income | Repayment Rate (%) |
|---|---|
| Below $46,620 | NIL |
| $46,620 - $53,826 | 1% |
| $53,827 - $57,055 | 2% |
| $57,056 – $60,479 | 2.5% |
| $60,480 - $64,108 | 3% |
| $64,109 - $67,954 | 3.5% |
| $67,955 - $72,031 | 4% |
| $72,032 - $76,354 | 4.5% |
| $76,355 - $80,935 | 5% |
| $80,936 - $85,792 | 5.5% |
| $85,793 - $90,939 | 6% |
| $90,940 - $96,396 | 6.5% |
| $96,397 - $102,179 | 7% |
| $102,180 - $108,309 | 7.5% |
| $108,310 - $114,707 | 8% |
| $114,708 - $121,698 | 8.5% |
| $121,699 - $128,999 | 9% |
| $129,000 - $136,739 | 9.5% |
| $136,740 and above | 10% |