Income tax is a reality for working Australians, and the amount you pay is determined by your earnings. This system, known as progressive taxation, means higher incomes incur higher taxes. Here’s a breakdown of the tax brackets for the 2023-2024 financial year and how recent changes may affect you.
Income Tax Brackets Australia: 2023-2024
The tax brackets for the 2023-2024 financial year remain consistent with previous years. Here’s a breakdown based on income:
| Taxable Income | Tax on this Income | Marginal tax rate |
| $0–$18,200 | Nil | 0% |
| $18,201–$45,000 | 19c for each $1 over $18,200 | 19% |
| $45,001–$120,000 | $5,092 plus 32.5c for each $1 over $45,000 | 32.50% |
| $120,001–$180,000 | $29,467 plus 37c for each $1 over $120,000 | 37% |
| $180,001 and over | $51,667 plus 45c for each $1 over $180,000 | 45% |
For example, an Australian earning $40,000 would pay around $4,142 in tax, while someone earning $100,000 would pay approximately $22,967. These figures exclude the Medicare levy of 2%.
How Are Tax Brackets Determined?
Tax brackets are set by the Federal Government based on annual revenue, aiming to maintain a tax wedge of around 26-29%. Bracket adjustments occur periodically to accommodate inflation and wage growth, preventing bracket creep.
Estimating Your Tax for 2023-2024
Use online tax calculators like those provided by the ATO or Moneysmart to estimate your tax liability for the current financial year. These tools consider various taxable incomes and deductions, providing a clearer picture of your financial obligations.
Stay informed about your tax obligations and potential savings. Contact us at 1300 952 286 or email [email protected] to discuss how you can optimize your tax situation. Visit www.boanco.com.au for more information.
Stage Three Tax Cuts Revamp Explained
Originally proposed by the Morrison government, the stage three tax cuts aim to provide relief for higher-income earners. However, adjustments by the Albanese Government prioritize benefits for lower and middle-income earners.
The revised plan retains the 37% tax bracket but raises the threshold for the top tax rate to $190,000. These changes benefit earners between $50,000 and $130,000 the most.
New 2024-2025 Tax Brackets
| Taxable Income | Tax Rate |
| $0–$18,200 | Nil |
| $18,200–$45,000 | 16% |
| $45,000–$135,000 | 30% |
| $135,000-$190,000 | 37% |
| $200,000 and over | 45% |
Stay informed about tax changes and how they affect you. Contact us at 1300 952 286 or email [email protected] to discuss how you can optimize your tax situation. Visit www.boanco.com.au for more information.