Income Tax in Australia
Income tax in Australia is levied upon three sources of income for individual taxpayers – personal earnings (such as salary and wages), business income and capital gains. Income received by individuals is taxed at progressive rates, while income derived by companies is taxed at a flat rate of 30%.
In Australia the financial year runs from 1 July to 30 June of the following year and Income tax is collected by the Australian Taxation Office (ATO) on behalf of The Commissioner of Taxation.
A Tax File Number (TFN) is needed before filing a tax return in Australia. Individuals without a TFN number are taxed at the highest rate.
Tax Rates for Residents in 2025
Individual income tax rates range from 0% to 45%, plus a Medicare levy of 2%.
| Taxable income | Tax on this income |
|---|---|
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
The above rates do not include the Medicare levy of 2%.
Individuals who are Australian resident for tax purposes, are taxed on their worldwide income, so they must declare any foreign income in the income tax return.
Tax for Foreign Nationals
Foreign residents, generally on a work visa, are taxed only on their Australian income. The following rates are applicable.
| Taxable income | Tax on this income |
|---|---|
| 0 – $135,000 | 30c for each $1 |
| $135,001 – $190,000 | $40,500 plus 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 plus 45c for each $1 over $190,000 |
Foreign residents are not required to pay the Medicare levy.
For individuals under the age of 18, receiving unearned income (for example, investment income), special rates may apply.
Also See – Official Government Website for Taxation office in Australia – Home | Australian Taxation Office