Australian income tax brackets and rates (2023-24 and 2024-25)
Now that the stage 3 tax cuts are law, most Australians will receive a tax cut in 2024-25. Until then, existing income tax rates and thresholds apply.
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The Australian income tax system for individuals is based on marginal tax rates and income thresholds. The higher a person’s taxable income in a financial year (July 1 to June 30), the more tax they pay.
In addition, most Australians pay a Medicare levy of 2% of their taxable income. Those earning higher taxable income amounts are also liable for an additional Medicare levy surcharge of 1 to 1.5%.
A person’s taxable income sources can include:
An individual can reduce their taxable income by claiming tax deductions. Common tax deductions include:
Individuals can also reduce their tax payable if they are eligible for tax offsets, such as:
It’s important to understand that unlike tax deductions, tax offsets can only be used to reduce the amount of tax payable, they can’t be used to generate a tax refund from the Australian Taxation Office (ATO). Any unused tax offset is non-refundable.
Now that the stage 3 tax cuts are law, most Australians will receive a tax cut in 2024-25. Until then, existing income tax rates and thresholds apply.
If you are eligible for the Age or DVA pension you could be in line for a handy tax rebate, depending on your taxable income and relationship status.
Our income tax calculator will show you what offsets you may be eligible for, as well as your marginal tax rate and how much income tax you effectively pay.
Low-income earners may be eligible to reduce their tax bill by as much as $700, without lifting a finger. Check our guide to who’s eligible and for how much.
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