Australian income tax rates for the 2014/2015 year, (and for 2013/2014 year)

Note: For your convenience we have included the latest income tax rates, and also the income tax rates for the three previous financial years.

The tax rates applicable for the 2014/2015 year and future years are set out in the tables below. We have also included the tax rates for the 2013/2014, 2012/2013 and 2011/2012 years (including the low-income threshold for the Medicare levy) at the end of the article, for your reference and convenience.

Note: In May 2013, the previous 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 applied for the 2012/2013 and the 2013/2014 years, continues to apply for the 2014/2015 year, will continue to apply for future years (see table below).

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.

New income taxes for the 2014/2015 year

In the May 2014 Federal Budget, the government announced a temporary levy amounting to an extra 2% of income tax for those earning more than $180,000, to apply from 1 July 2014. At the time of writing, this levy was not yet law.

The former ALP government increased the Medicare levy by 0.5% to fund the National Disability Insurance Scheme (for information see SuperGuide article Medicare Levy increase helps pay for NDIS). From 1 July 2014, the Medicare levy increases to 2%, which had previously been 1.5%. Lower-income earners may not pay the levy, or pay a reduced amount, while some higher-income earners may pay as much as 3.5% of their taxable income towards the Medicare levy.

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 2014/2015 year

The tax-free threshold is the first $18,200 of your income. You can earn up to $20,542 before any income tax is payable, when taking into account the Low Income Tax Offset (LITO).

For the 2014/2015 year, your top marginal rate of income tax rate can be 0%, 19%, 32.5%, 37% or 45% (plus Medicare levy), although the top marginal tax is expected to be 47% plus Medicare levy effective from July 2014, once the temporary deficit levy becomes law.

Note: Although not yet law, the government intends to introduce a temporary increase of 2% to the top marginal tax rate, to redress, what the government says are debt issues for the country. The debt levy will apply for the 2014/2015, 2015/2016 and the 2016/2017 years, assuming it gets through parliament (for more information about the debt levy see SuperGuide article Debt ‘levy’: More income tax for high-income earners.

Income tax rates for 2014/2015 year (and future years)
Income Marginal tax rate Tax payable
$0-$18,200 0% Nil
$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 47%* $54,547 plus 47* cents for each dollar over $180,000

Source: Adapted from information on the ATO website (www.ato.gov.au). Note that Medicare Levy of 2% is also payable by most taxpayers.

*From 1 July 2014, a debt levy of 2% will be imposed on taxpayers with a taxable income greater than $180,000, and it will be imposed only on income that exceeds $180,000, taking the top marginal tax rate to 47% (plus Medicare levy). Note that the debt levy, officially known as the Temporary Budget Repair Levy, is not yet law.

Income tax rates for 2013/2014 and 2012/2013 financial years

Effective since the start of the 2012/2013 year, the tax-free threshold jumped to the first $18,200 of your income. You can earn up to $20,542 (effective since the 2012/2013 year) before any income tax is payable, when taking into account the Low Income Tax Offset (LITO).

For the 2013/2014 and 2012/2013 years, your top tax rate is 0%, 19%, 32.5%, 37% or 45% (plus Medicare levy).

Income tax rates for 2013/2014 and 2012/2013 financial years
Income Marginal tax rate Tax payable
$0-$18,200 0% Nil
$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, a tax-free threshold on the first $6000 of your income applied, and you could 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 could be 0%, 15%, 30%, 37% or 45% (plus Medicare levy).

Note: For the 2011/2012 year only, a flood levy was also payable, in addition to the income tax payable (see table at the end of the article for flood levy rates applicable for your income).

Income tax rates for 2011/2012 financial year
Income Marginal tax rate Tax payable
$0-$6,000 0% Nil
$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 (for 2012/2012 year).

Note: For the 2011/2012 year only, if your taxable income was more than $50,000 then your income was also 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: For the 2011/2012 year, the Medicare Levy low-income threshold was $19,404 (lower threshold) and $22,828 (upper threshold) for singles. For families, the additional amount of threshold for each dependent child or student is $3,007 (lower threshold) and $3,538 (upper threshold). For the 2011/2012 year, the Medicare Levy low-income threshold for pensioners below Age Pension age is $30,451 with an upper threshold of $35,824. For those on SATO (now known as SAPTO) it is $30,685 with an upper threshold of $36,100.

© Copyright Trish Power 2009-2014

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. The 2013 Budget changes to the Net Medical Expenses Tax Offset should spur some action on the pre-payment front.
    If your out-of-pocket medical expenses in the 2012-13 tax year are less than $2100 you can’t claim the Net Medical Expenses Tax Offset (NMETO) in the 2012-13 tax year. The Budget changes mean that you are therefor not eligible for the NMETO in subsequent years like 2013-14 or 2014-15 even if your out of pocket expenses in those years are above the applicable threshold. However if you are eligible for the NMETO in the 2012-13 tax year you will be eligible also in subsequent years. It may therefor be in the interests of many whose operations are planned for July 2013 or later to pre-pay some or all of the medical expenses before the June 30 2013 deadline, thus establishing eligibility for the NMETO in the 2012-13 tax year.

  2. jonelle says:

    Many valued points. My partner does earn over 100 a year but let me say just cause he does doens’t mean we are rolling in it and can’t afford the extra tax hikes. Paying over 30 000 in a tax a year and then having a tax debt is ridiculous needless to say. Trying to find 4 grand and then get charged interest on that is so very hard. We don’t own a house. We are debt up to our eyeballs before he went mining. Have only done for near on two years now and im starting to think the extra money is not worth it as it gets taken in tax. So for you people who think that if we earn lots we can afford it. I can tell you that is not the case and we still live pay day to pay day. Take money off single parents is ridiculous so they can go back to work how ridiculous when not many people who work round them with skool children and then skool holidays yep ridiculous all of this is stupid

  3. Mate, what is wrong with most of you? Have a look at other countries around the world and what do you see? Most have nothing in the way of pensions or unemployment benefits. the money for everything we have has to come from somewhere. Maybe you should be thankful for what we do have and do a little less crying about the small amount of tax we do pay.

    I say pay more tax to help support more pensioners. It wouldn’t effect anyone if they lived withing there means instead of trying to keep up with the next bloke.

    • Your right Josh, this is a good country to be living in. Some people are never satisfied, and I fear they will get to the end of their lives, having not really lived it. Maybe they need to live in the slums of India or elsewhere in the world, to get a real perspective on what is important in life.

  4. Hey i asked myself the question , What did the previous goverment give the everyday
    person when in power,I myself recieved Gst, high interest rates[ which jumped was it 4times
    in the last 6mths?] high petrol on average 1.50 lt for the last yr of office, high food bills with little competition
    road tolls on roads we already owned, rises in power gas ect down to privatisation,
    work realted issues , Now i ask myself what do i have now, lower interest rates , fuel lower
    electric gas water still rising due to privatisation, carbon tax to which was promised not to be.
    Now i’m remembering one thing the previous goverment was wanting carbon tax also , howard stated he would implement it in 2013 if re elected. And abbott stated would
    probably be put onto petrol if re elected, now why is he saying he dosn’t want it ,its all about the job not the country.Stimulus was going to hurt us all ,interest rates would go through the roof, ect ect .
    All i want to see is for the battlers be able to live and support the family with the every day things we all rely on from day to day to be affordable..Interest Rates low ,petrol low ,food bills low,,Both party’s want to empty our pockets thats all I see..Not to be trusted ..

    • Yes you are right, it is a choice between the Liberals who consistently look after their mates, those who are wealthy and Labour who consistently try to help the workers and have their eye on the future. Both have to contend with what occurs in the rest of the world as well, because unfortunately Australia is part of the rest of the world. Tough decisions have to be made sometimes, ones we dont always like. We were not immune entirely to the Global Financial Crisis, but at least the Labour party kept our heads above water. I still have a job.

      • A lot of those things were implemented by state Labor governments eg state owned electricity. Yes we got the GST from a Liberal government but how else were they to pay for the excesses of the previous Labor years?

        Then if you think you had high interest rates under the previous Liberal government, just try 19% under Labor’s Hawke-Keating reign as we experienced.

        You can throw stones at both sides. The fact remains that the Liberals manage money well, leaving substantial surpluses which Labor then manages to turn into substantial deficits within a few years. It has always been thus.

        I prefer a government who recognises the well-being of Australia, that first delivers a surplus which they can then share with the Australian people. In actual fact, most Australians recall the years from 2000-2007 as good years.

        And, by the way, did you really say it was the libs who look after their mates? How do you explain the fact that our current government and its departments are riddled with ex-union members?

  5. Julia Gillard’s new tax rates are a con and a disgrace. Here is my personal situation:
    I retired last year and am in receipt of three small pensions totalling about $32000 per annum. The details are:
    1. Comsuper pension of about $12000 per year. (I claim the tax free threshold on this pension).
    2. A super pension of about $12000 per year.
    3. A transition to retirement pension of about $8000 per year.
    I cannot claim the tax free threshold on pensions 2 and 3 as this can only be claimed once and I claimed this on pension 1. The first pension payment in July resulted in a total of $35 pension reduction in pension 2 and 3. On contacting the superannuation fund I was advised that the reduction in my pension was due to the increased taxation rates, ie, increase from 15 cents to 19 cents. I was advised that there was nothing that could be done as PAYG was deducted in accordance with ATO instructions and that I would have to recover the money at the end of the financial year when I do my tax return. In the meantime I have to live on a reduced pension.

  6. Mike McC says:

    Hi Trish,
    One question: I’am 57 years old and still working with a house loan and just enough in super to pay the house off, do you think the Federal government is likely to stop bulk withdrawals from super in the next few years? I have an Autisic son who is 31 and lives at home. My wife looks after him 24/7 but doesn’t receive the cares pension because I earn $1000 over the current ceiling for payments and have always just earned above the ceiling. We will always care for him as long as we remain able to do so and get scared the rules on bulk withdrawal of super may change.
    Your thoughts would be appreciated.

  7. Providing rabates to offset the higher cost for carbon emissions is hardly an incentive for consumers to change; this tax and the wrapper it’s good for the environment was just a way for Gillard & labour to retain power…. And keep there lofty and high paid jobs.
    Increasing the GST on high polluting products (non bi fuels, plastic etc) would great an incentive to consumers to buy Eco friendly items, as well as Co to make better products. Again, this tax wasnt for our Australian environment (less than .5% global) but all about Gillard forming Govt.

  8. If I took home $36.954 and paid $8071 in tax this financial year and have around $1000 worth of claims…
    Does anyone have a rough idea of what refundI might receive ? No private health and I grossed just over 45k

  9. Rona Seabrook says:

    The rise will do no good for people living on the streets. Perhaps instead of sending millions over seas build hostels for our needy.John Howard did not give the age pensioners much.I will say Julia has done a lot better for the poor. Don’t know who is the best of both evils Tony or Julia. I will never vote again as it only takes a couple of men to choose who runs the country. Then it takes behind the doors to select who will run the country. Why then do we have big elections. No more for me.

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