Australian Taxation Office: Individual Income Tax Rates

What Is The Earnings Tax?

Earnings tax is the most significant stream of profits in the tax system, it consists of 3 main pillars:

  • Individual revenues
  • Business earnings
  • Capital gains

Income tax is applied to a person’s gross income and is paid on all forms of earnings. This includes salaries from your task, making money from service and returns from investments. Earnings tax can also apply to possessions such as when a home or shares are offered.

Taxpayers with 2 or more tasks or other gross income sources need to be aware that they may be caught in an unintended tax trap as a result of the tax-free limit.

Also, check this for Individual Tax Rates 2012 & 2013

Earnings Tax Rates

Australia has a progressive tax system, which indicates that the greater your income, the more tax you pay.

You can earn approximately $18,200 in a financial year and not pay tax. This is referred to as the tax-free threshold and after which, the tax rates begin.

Tax rates for locals in 2017/18 consist of (Note: these rates do not include the Medicare levy):.

Specific Income Tax Rates.

Earnings tax in Australia is enforced by the federal government on the taxable income of people and corporations. State governments have not imposed income taxes considering The Second World war. On people, income tax is levied at progressive rates, and at one of 2 rates for corporations. The earnings of partnerships and trusts are not taxed straight, however, are taxed on its circulation to the partners or recipients. Earnings tax is the most crucial source of earnings for the federal government within the Australian taxation system. Income tax is gathered on behalf of the federal government by the Australian Taxation Workplace.

The two statutes under which earnings tax is computed are the Income Tax Assessment Act 1936 and the Earnings Tax Evaluation Act 1997; the former is gradually being re-written into the latter. Taxable earnings of people are taxed at progressive rates from 0 to 45%, plus a Medicare levy of 2%, while earnings obtained by companies are taxed at either 30% or 27.5% depending on yearly turnover, but is subject to dividend imputation.

Person – Taxes On Personal Income.

A resident person goes through Australian earnings tax on a worldwide basis, i.e. income from both Australian and foreign sources (except for certain foreign earnings and gains of short-lived homeowners; see Capital gains under the Earnings decision area for additional information).

A non-resident individual is liable to Australian earnings tax just on income (aside from interest, royalties, and dividends, which are generally based on keeping tax [WHT] originated from sources in Australia, and specific statutory earnings that are taxable on a basis other than the source (e.g. specific capital gains).

Australia has no surtaxes, option, or other income taxes on individual income.

Individual earnings tax (PIT) rates.

The Australian government has carried out a seven-year Personal Earnings Tax Plan aimed to provide tax relief to specific taxpayers through lower PIT rates and Low and Middle-Income Tax Offsets and an increase to the top limit at which the 32.5% marginal tax rate applies. Later stages will eventually get rid of both of the 32.5% and 37% marginal tax rates, which will result in around 94% of Australian taxpayers facing a limited tax rate of 30% or less in the 2024/25 and later earnings years.

Following the 2020/21 Federal Spending plan, the federal government executed measures to bring Stage 2 of its currently legislated earnings tax cuts to start from 1 July 2020 instead of the initial start date of 1 July 2022.

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