Note: For your convenience we have included the latest income tax rates, and the income rates for the previous financial year. Over time, this page will also include relevant tax offsets, such as the Senior Australians and Pensioners Tax Offset (SAPTO), and other tax-related information such as the Medicare levy thresholds.
In July 2011, the federal government announced the introduction of a carbon tax on Australia’s biggest polluting companies. According to the government, more than half of the revenue raised from the carbon tax will be redirected to Australians in the form of tax cuts (for taxpayers) and a Clean Energy Supplement (for Age Pensioners and others). The tax cuts and supplement are designed to compensate Australians for the cost increases that are being be passed onto consumers since the carbon tax was introduced in July 2012.
In May 2013, the federal government announced that the second round of tax cuts, taking effect from the 2015/2016, would not be going ahead ((see SuperGuide article Say goodbye to 2015/2016 income tax cuts), which means the income tax rates that apply for the 2012/2013, the 2013/2014 and the 2014/2015 years, will continue to apply for future years (see table below).
Note: In the May 2012 Federal Budget, the Federal government announced further payments to taxpayers in the form of education bonuses, increases in family payments and other payments which are to be funded by not reducing the company tax rate (as initially promised to business). In May 2013, the government announced that the increases in family payments would not be going ahead (see SuperGuide article Say goodbye to 2015/2016 income tax cuts)
The tax rates applicable for the 2012/2013 and 2013/2014 years, and future years are set out below. We have included the tax rates for the 2012 year (including the low-income threshold for the Medicare levy) at the end of the article, for your reference and convenience.
Note: If you’re Age Pension age or older, you may be eligible for a higher tax-free threshold by taking advantage of the Senior Australians & Pensioners Tax Offset (SAPTO). Refer to other SuperGuide articles for more information on SAPTO.
Note: The primary source for taxpayers on any information relating to tax rates is the Australian Taxation Office website (www.ato.gov.au). SuperGuide doesn’t answer questions specifically on the income tax rates.
Income tax rates for 2012/2013 and 2013/2014 financial years
Effective from the 2012/2013 year, the tax-free threshold jumps to the first $18,200 of your income. You will be able to earn up to $20,542 (from the 2012/2013 year) before any income tax is payable, when taking into account the Low Income Tax Offset (LITO). From the 2012/2013 year, your top tax rate will be 0%, 19%, 32.5%, 37% or 45% (plus Medicare levy).
|Income tax rates for 2012/2013 and 2013/2014 financial years (and future years)|
|Income||Marginal tax rate||Tax payable|
|$18,201- $37,000||19%||19 cents for each $1 over $18,200|
|$37,001-$80,000||32.5%||$3,572 plus 32.5 cents for each dollar over $37,000|
|$80,001-$180,000||37%||$17,547 plus 37 cents for each dollar over $80,000|
|$180,001 and above||45%||$54,547 plus 45 cents for each dollar over $180,000|
Source: Adapted from information on the ATO website (www.ato.gov.au). Note that Medicare Levy of 1.5% is also payable by most taxpayers.
Income tax rates for 2011/2012 financial year
For the 2011/2012 year, you can expect a tax-free threshold on the first $6000 of your income, and you can earn up to $16,000 (for the 2011/2012 year) without paying income tax when taking into account the Low Income Tax Offset (LITO). For the 2011/2012 year, your top marginal tax rate can be 0%, 15%, 30%, 37% or 45% (plus Medicare levy).
|Income tax rates for 2011/2012 financial year|
|Income||Marginal tax rate||Tax payable|
|$6,001- $37,000||15%||15 cents for each $1 over $6,000|
|$37,001-$80,000||30%||$4,650 plus 30 cents for each dollar over $37,000|
|$80,001-$180,000||37%||$17,550 plus 37 cents for each dollar over $80,000|
|$180,001 and above||45%||$54,550 plus 45 cents for each dollar over $180,000|
Source: Adapted from information on the ATO website (www.ato.gov.au). Maximum LITO payable is $1500 up to taxable income of $16,000.
Note: For the 2011/2012 year only, if your taxable income is more than $50,000 then your income will also be subject to a flood levy. The flood levy is set out in the table below.
|Taxable income||Flood levy (for 2011/2012 year) on this income|
|$0 to $50,000||Nil|
|$50,001 to $100,000||Half a cent for each $1 over $50,000|
|Over $100,000||$250 plus 1c for each $1 over $100,000|
Table source: ATO (www.ato.gov.au)
Note: In the May 2012 Federal Budget, the Government announced that, backdated to 1 July 2011, the Medicare Levy low-income threshold will increase in line with the Consumer Price Index to $19,404 for singles (up from $18,839) and increase to $32,743 (up from $31,789). For families, the additional amount of threshold for each dependent child or student will be increased to $3,007 (up from $2,919). For the 2011/2012 year, the Medicare Levy low-income threshold for pensioners below Age Pension age increases to $30,451 (up from $30,439).