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Tax in Australia

Personal Tax in Australia

Australia uses a progressive income tax system managed by the Australian Taxation Office (ATO). Understanding your tax obligations is essential when you start working in Australia.

Tax Residency vs Visa Status: Your tax obligations in Australia are determined by your tax residency status, not your visa type. You can be a temporary visa holder and still be an Australian tax resident, which means you'll be taxed at the same rates as Australian citizens and eligible for the tax-free threshold.

Income Tax Rates (2024–25)

Australia uses a progressive tax system. The more you earn, the higher rate you pay, but only on the income in each bracket. Australian residents benefit from the tax-free threshold of $18,200.

Australian Residents

Taxable IncomeRateTax Payable
$0 – $18,200NilNil
$18,201 – $45,00016%19c per $1 over $18,200
$45,001 – $135,00030%$4,288 + 30c per $1 over $45,000
$135,001 – $190,00037%$31,288 + 37c per $1 over $135,000
$190,001+45%$51,638 + 45c per $1 over $190,000

Non-Residents

Taxable IncomeTax Rate
$0 – $135,00030% (no tax-free threshold)
$135,001 – $190,00037%
$190,001+45%

The 2% Medicare Levy applies to most Australian residents on top of income tax. Low-income earners may receive a reduction or exemption.

Key Tax Concepts for Migrants

Tax File Number (TFN)

Tax File Number (TFN)

Required to work and lodge tax returns. Apply free at ato.gov.au. Without one, tax is withheld at 47%.

Tax Return

Tax Return

Financial year is 1 Jul–30 Jun; returns due 31 Oct via myTax or a registered agent. Most migrants receive a refund.

Superannuation

Superannuation

Employers must contribute 11% of your earnings. Departing temporary residents can claim it back as a DASP.

Medicare Levy

Medicare Levy

A 2% levy on taxable income funds Medicare. Most temporary visa holders ineligible for Medicare are exempt.

Work-Related Deductions

Work-Related Deductions

Claim uniforms, tools, professional memberships, work-from-home, and self-education expenses. Keep all receipts.

Foreign Income

Foreign Income

Australian tax residents must declare worldwide income. Tax treaties with many countries prevent double taxation.

The Australian Taxation Office (ATO)

The ATO administers Australia's federal tax system and is responsible for collecting taxes, issuing TFNs, and providing free online tax lodgement services.

The ATO's website (ato.gov.au) provides extensive free guidance for migrants and temporary residents on tax residency tests, superannuation, TFN applications, and DASP claims.

The myTax online portal allows most individuals to lodge their tax return for free in as little as 30 minutes, with pre-filled data from employers, banks, and government agencies.

Key Dates

1 JulyNew financial year begins
30 JuneFinancial year ends
July–AugustATO pre-fills tax return data
31 OctoberTax return lodgement deadline (self-lodging)
May (following year)Extended deadline via registered tax agent
QuarterlySuperannuation contributions from employer

Frequently Asked Questions

Yes. If you earn income in Australia you must lodge an annual tax return with the Australian Taxation Office (ATO). The Australian financial year runs from 1 July to 30 June. Tax returns are due by 31 October following the end of the financial year (or May the following year if you use a registered tax agent). You can lodge online through myTax via myGov or engage an accountant.
If you are an Australian tax resident (which includes most permanent residents and long-term temporary visa holders), you pay tax on a progressive scale: 0% on the first $18,200 (the tax-free threshold), 19% on $18,201–$45,000, 32.5% on $45,001–$120,000, 37% on $120,001–$180,000, and 45% on income above $180,000. A 2% Medicare Levy also applies to most residents. Foreign residents pay a flat 32.5% from the first dollar, so it is important to establish residency status early.
A TFN is a unique 9-digit number issued by the ATO that identifies you for tax purposes. You must provide your TFN to your employer, bank, and super fund. Without a TFN, your employer will withhold tax at the highest rate. Apply for a TFN online at ato.gov.au. Most new residents receive their TFN within 28 days. Bring your passport and visa details when applying.
Superannuation (super) is Australia's compulsory retirement savings system. Your employer contributes 11% of your gross salary into a super fund on your behalf, in addition to your salary and not deducted from it. Super contributions are taxed at a concessional rate of 15% inside the fund, rather than at your marginal income tax rate. If you leave Australia permanently, you may be able to withdraw your super balance under the Departing Australia Superannuation Payment (DASP) scheme, though it will be taxed at 35–65%.
Yes. Australian tax residents can claim deductions for work-related expenses including home office costs, work uniforms, tools and equipment, professional memberships, and work-related travel. You can claim these deductions without receipts up to $300; above $300 you need receipts. The ATO's myDeductions app makes recording expenses throughout the year easy. Deductions reduce your taxable income and can significantly reduce your tax bill.
The Medicare Levy Surcharge (MLS) is an additional 1–1.5% tax on the income of higher earners (above $93,000 for singles) who do not hold private hospital insurance. It is designed to encourage higher-income individuals to use the private system. Taking out an eligible private hospital cover policy avoids the surcharge. For most new arrivals whose income is below the threshold, the standard 2% Medicare Levy applies but not the surcharge.

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