Taxes in Australia
Australia's tax system is straightforward compared to many countries. Understanding residency status is key to determining your obligations.
Tax Residency
You're an Australian tax resident if you:
- Live in Australia permanently
- Stay 183+ days in the tax year (presumed resident)
- Have your permanent home in Australia
Tax residents pay progressive rates on worldwide income with tax-free threshold.
Non-residents pay flat 32.5% from the first dollar on Australian income only.
Income Tax Rates (2025-26)
Australian Residents:
| Taxable Income | Rate | Tax On This Bracket |
|---|---|---|
| $0 - $18,200 | 0% | $0 |
| $18,201 - $45,000 | 16% | Up to $4,288 |
| $45,001 - $135,000 | 30% | $4,288 + 30% over $45K |
| $135,001 - $190,000 | 37% | $31,288 + 37% over $135K |
| $190,001+ | 45% | $51,638 + 45% over $190K |
Changes from July 2026: 16% rate drops to 15%
Changes from July 2027: 15% rate drops to 14%
Non-Residents:
| Taxable Income | Rate |
|---|---|
| $0 - $135,000 | 32.5% |
| $135,001 - $190,000 | 37% |
| $190,001+ | 45% |
Additional Taxes/Levies
| Tax | Rate | Who Pays |
|---|---|---|
| Medicare Levy | 2% | Tax residents |
| Medicare Levy Surcharge | 1-1.5% | High earners without private insurance ($90K+) |
| HELP/HECS | 1-10% | Those with student loans |
Superannuation (Retirement)
Employer contributions:
- Currently 11.5% of ordinary earnings (increasing to 12% by 2025)
- Paid into your super fund on top of salary
- Preserved until retirement (age 60+)
What to know:
- Choose your own super fund or use employer's default
- Can consolidate multiple accounts
- Tax-advantaged savings (15% tax rate)
- Some may be eligible to withdraw when leaving Australia permanently
Working Holiday Makers
Special tax rate for 417/462 visa holders:
- 15% on first $45,000
- Then non-resident rates apply
Key Tax Dates
| Date | Event |
|---|---|
| July 1 | New tax year begins |
| June 30 | Tax year ends |
| October 31 | Tax return due (self-lodging) |
| May 15 | Extended deadline via tax agent |
For New Immigrants
First steps:
- Apply for Tax File Number (TFN) - needed for employment
- Determine your tax residency status
- Keep records of overseas income if tax resident
- Consider existing tax treaties (Australia has 45+)
Lodging returns:
- myTax (online, free) for simple returns
- Tax agents for complex situations
- Many expats use agents first year, then DIY
Pro Tips
- •Apply for TFN immediately - you need it for employment
- •Tax residency is different from visa status - get advice
- •Get private health insurance if earning $90K+ to avoid surcharge
- •Superannuation is additional to salary - great long-term benefit
- •Working holiday makers pay special 15% rate on first $45K
Have questions about taxes in Australia?