2023 Tax Rates Explained
With five different income brackets, the Medicare levy, the low income offset and hundreds of pages of tax laws, understanding personal Australian tax rates can be difficult.
There are some rules that take many taxpayers by surprise.
For example, you should know that the ATO classifies any interest you earn from savings or investments counts as part of your income.
The ATO tax rate applied to your income will vary, depending on your ‘annual taxable income’. This means money earned from employment plus other forms of income such as interest.
Australian Tax Rates for 2023 (2022-2023 tax year)
We’ve summarised Australian Tax rates for the 2022-2023 tax season below. Take a look to see which income band you are likely to be classified under.
| Income | Tax Rates |
| $0-$18,200 | $0-$18,200 |
| $18,201 -$45,000 | 19c for each $1 over $18,200 |
| $45,001-$120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
While the above tax rates give you a rough idea of the amount of tax you will pay each year, you should be aware that the Medicare Levy and the Low Income Tax Offset also affect your tax payable.
Medicare Levy
There are some exemptions but in general, Australian tax residents pay a Medicare levy, which is calculated at a flat rate of 2% of a taxpayer’s taxable income over a certain level.
At time of writing Medicare thresholds were as follows:
| Income type | Income threshold |
| Singles | $24,276 |
| Single seniors | $38,365 |
| Family | $40,939 |
| Family seniors | $53,406 |
| Increase threshold for each dependent child or student | $3,760 |
Low Income Tax Offset
As well as there being no tax on the first $18,200 there is also a low income tax offset.
The maximum value of the low-income tax offset is $700. If your income exceeds $66,667, no offset is available.
See below:
| Income | tax offset |
| Up to $37,000 | $700 |
| Between $37,501 and $45,000 | $700 minus 5 cents for every $1 above $37,500 |
| between $45,001 and $66,667 | $325 minus 1.5 cents for every $1 above $45,000. |
Taxation and calculating your Australian tax rates can be quite confusing. At Etax Local Accountants our aim is to take this confusion out of the equation. Our highly qualified accountants are very knowledgeable on all aspects of taxation in Australia and will make doing your taxes as easy as possible.
Tax Agent
