3: Individuals

Chart 3.1 Average and marginal tax rates, 2014-15

Notes: The rates shown are for a single person with no dependants who does not receive any Australian Government transfer payments. Marginal tax rates take account of the statutory rates shown in Table 3.1, as well as the Medicare levy of 2 per cent, the Temporary Budget Repair Levy (an additional 2 per cent on taxable income in excess of $180,000 per year) and the LITO. The LITO brings the effective tax-free threshold to $20,542. The 10 percentage point increase in marginal tax rates between $20,542 and $25,677 is due to the phase-out of the Medicare levy low-income concession. The 1.5 percentage point increase in marginal tax rates between $37,001 and $66,667 is due to the phase-out of the LITO.

This chart shows the average and marginal rates of tax paid at different levels of taxable income from $0 to $200,000, for a single taxpayer with no dependants and no eligibility for transfer payments. The chart shows that average rates of tax are less than marginal rates of tax at all levels of income. The chart also shows that: marginal tax rates generally increase with taxable income as described in table 3.1; no tax is paid on annual taxable income below $20,542; the phase-out of the Medicare levy low-income concession adds 10 percentage points to the statutory marginal rate of 19 per cent between taxable income of $20,542 and $25,677; and the phase-out of the low-income tax offset adds 1.5 percentage points to the statutory marginal rate of 32.5 per cent (and Medicare levy of 2 per cent) between taxable income of $37,000 and $66,667.

Average and marginal tax rates, 2014-15
Taxable Income Average tax rate Marginal tax rate
0 0 0
1000 0 0
2000 0 0
3000 0 0
4000 0 0
5000 0 0
6000 0 0
7000 0 0
8000 0 0
9000 0 0
10000 0 0
11000 0 0
12000 0 0
13000 0 0
14000 0 0
15000 0 0
16000 0 0
17000 0 0
18000 0 0
19000 0 0
20000 0 0
21000 0.006 0.29
22000 0.019 0.29
23000 0.031 0.29
24000 0.042 0.29
25000 0.052 0.29
26000 0.06 0.29
27000 0.065 0.21
28000 0.071 0.21
29000 0.075 0.21
30000 0.08 0.21
31000 0.084 0.21
32000 0.088 0.21
33000 0.092 0.21
34000 0.095 0.21
35000 0.098 0.21
36000 0.102 0.21
37000 0.105 0.21
38000 0.111 0.36
39000 0.118 0.36
40000 0.124 0.36
41000 0.129 0.36
42000 0.135 0.36
43000 0.14 0.36
44000 0.145 0.36
45000 0.15 0.36
46000 0.155 0.36
47000 0.159 0.36
48000 0.163 0.36
49000 0.167 0.36
50000 0.171 0.36
51000 0.175 0.36
52000 0.178 0.36
53000 0.182 0.36
54000 0.185 0.36
55000 0.188 0.36
56000 0.191 0.36
57000 0.194 0.36
58000 0.197 0.36
59000 0.2 0.36
60000 0.202 0.36
61000 0.205 0.36
62000 0.208 0.36
63000 0.21 0.36
64000 0.212 0.36
65000 0.215 0.36
66000 0.217 0.36
67000 0.219 0.345
68000 0.221 0.345
69000 0.222 0.345
70000 0.224 0.345
71000 0.226 0.345
72000 0.228 0.345
73000 0.229 0.345
74000 0.231 0.345
75000 0.232 0.345
76000 0.234 0.345
77000 0.235 0.345
78000 0.237 0.345
79000 0.238 0.345
80000 0.239 0.345
81000 0.241 0.39
82000 0.243 0.39
83000 0.245 0.39
84000 0.247 0.39
85000 0.248 0.39
86000 0.25 0.39
87000 0.251 0.39
88000 0.253 0.39
89000 0.255 0.39
90000 0.256 0.39
91000 0.258 0.39
92000 0.259 0.39
93000 0.26 0.39
94000 0.262 0.39
95000 0.263 0.39
96000 0.264 0.39
97000 0.266 0.39
98000 0.267 0.39
99000 0.268 0.39
100000 0.269 0.39
101000 0.271 0.39
102000 0.272 0.39
103000 0.273 0.39
104000 0.274 0.39
105000 0.275 0.39
106000 0.276 0.39
107000 0.277 0.39
108000 0.278 0.39
109000 0.279 0.39
110000 0.28 0.39
111000 0.281 0.39
112000 0.282 0.39
113000 0.283 0.39
114000 0.284 0.39
115000 0.285 0.39
116000 0.286 0.39
117000 0.287 0.39
118000 0.288 0.39
119000 0.289 0.39
120000 0.29 0.39
121000 0.29 0.39
122000 0.291 0.39
123000 0.292 0.39
124000 0.293 0.39
125000 0.294 0.39
126000 0.294 0.39
127000 0.295 0.39
128000 0.296 0.39
129000 0.297 0.39
130000 0.297 0.39
131000 0.298 0.39
132000 0.299 0.39
133000 0.299 0.39
134000 0.3 0.39
135000 0.301 0.39
136000 0.301 0.39
137000 0.302 0.39
138000 0.303 0.39
139000 0.303 0.39
140000 0.304 0.39
141000 0.305 0.39
142000 0.305 0.39
143000 0.306 0.39
144000 0.306 0.39
145000 0.307 0.39
146000 0.307 0.39
147000 0.308 0.39
148000 0.309 0.39
149000 0.309 0.39
150000 0.31 0.39
151000 0.31 0.39
152000 0.311 0.39
153000 0.311 0.39
154000 0.312 0.39
155000 0.312 0.39
156000 0.313 0.39
157000 0.313 0.39
158000 0.314 0.39
159000 0.314 0.39
160000 0.315 0.39
161000 0.315 0.39
162000 0.316 0.39
163000 0.316 0.39
164000 0.317 0.39
165000 0.317 0.39
166000 0.317 0.39
167000 0.318 0.39
168000 0.318 0.39
169000 0.319 0.39
170000 0.319 0.39
171000 0.32 0.39
172000 0.32 0.39
173000 0.32 0.39
174000 0.321 0.39
175000 0.321 0.39
176000 0.322 0.39
177000 0.322 0.39
178000 0.322 0.39
179000 0.323 0.39
180000 0.323 0.39
181000 0.324 0.49
182000 0.325 0.49
183000 0.326 0.49
184000 0.327 0.49
185000 0.328 0.49
186000 0.328 0.49
187000 0.329 0.49
188000 0.33 0.49
189000 0.331 0.49
190000 0.332 0.49
191000 0.333 0.49
192000 0.333 0.49
193000 0.334 0.49
194000 0.335 0.49
195000 0.336 0.49
196000 0.337 0.49
197000 0.337 0.49
198000 0.338 0.49
199000 0.339 0.49
200000 0.34 0.49

Chart 3.2 Who paid individuals income tax, 2011-12

Note: The chart shows the number of tax filers who paid net income tax in thousand dollar taxable income brackets up to $200,000. Tax payable is calculated by applying the individual income tax rate scale, LITO and the Medicare levy to taxable income.

Source: Treasury calculations using administrative data from 2011-12 tax returns for individuals.

This chart shows the number of taxpayers who filed tax returns, and tax payable, in 2011-12 in $1,000 increments of taxable income between $0 and $200,000. The chart further shows the amount of tax paid in 2011-12, taking account of the personal tax rate scale, Medicare Levy and Low Income Tax Offset.

Taxable income Number of taxpayers Notional tax paid
1,000 8300 0
2,000 4474 0
3,000 3404 0
4,000 3033 0
5,000 2724 0
6,000 2773 0
7,000 3760 0
8,000 3248 0
9,000 2824 0
10,000 2517 0
11,000 2216 0
12,000 2246 0
13,000 3013 0
14,000 3760 0
15,000 4386 0
16,000 4989 0
17,000 97595 150
18,000 100728 300
19,000 105233 450
20,000 126493 660
21,000 133701 910
22,000 130970 1160
23,000 129499 1395
24,000 127669 1560
25,000 127437 1725
26,000 128199 1890
27,000 129512 2055
28,000 132955 2220
29,000 134793 2385
30,000 140090 2550
31,000 145083 2755
32,000 153883 2960
33,000 154883 3165
34,000 157589 3370
35,000 161333 3575
36,000 164517 3780
37,000 183444 3985
38,000 173070 4340
39,000 165791 4695
40,000 164655 5050
41,000 160524 5405
42,000 156882 5760
43,000 154104 6115
44,000 150667 6470
45,000 148413 6825
46,000 144522 7180
47,000 143548 7535
48,000 138183 7890
49,000 133340 8245
50,000 132933 8600
51,000 127337 8955
52,000 124513 9310
53,000 120717 9665
54,000 117120 10020
55,000 116061 10375
56,000 112707 10730
57,000 110513 11085
58,000 107754 11440
59,000 105371 11795
60,000 104379 12150
61,000 101499 12505
62,000 97812 12860
63,000 95357 13215
64,000 93524 13570
65,000 91305 13925
66,000 88473 14280
67,000 85650 14635
68,000 82571 14970
69,000 80500 15285
70,000 79303 15600
71,000 77351 15915
72,000 75500 16230
73,000 73848 16545
74,000 71742 16860
75,000 71091 17175
76,000 69085 17490
77,000 68366 17805
78,000 67406 18120
79,000 69155 18435
80,000 90188 18750
81,000 67418 19135
82,000 60786 19520
83,000 57808 19905
84,000 55271 20290
85,000 53076 20675
86,000 50266 21060
87,000 48366 21445
88,000 45861 21830
89,000 44725 22215
90,000 42895 22600
91,000 41126 22985
92,000 39613 23370
93,000 38117 23755
94,000 37023 24140
95,000 35901 24525
96,000 34190 24910
97,000 33669 25295
98,000 32454 25680
99,000 31441 26065
100,000 31150 26450
101,000 29651 26835
102,000 28419 27220
103,000 27255 27605
104,000 26123 27990
105,000 25413 28375
106,000 24496 28760
107,000 23567 29145
108,000 23061 29530
109,000 22418 29915
110,000 21614 30300
111,000 21041 30685
112,000 20470 31070
113,000 19777 31455
114,000 19263 31840
115,000 19290 32225
116,000 18506 32610
117,000 17956 32995
118,000 17289 33380
119,000 16631 33765
120,000 16551 34150
121,000 15960 34535
122,000 15507 34920
123,000 15055 35305
124,000 14701 35690
125,000 14535 36075
126,000 14182 36460
127,000 13675 36845
128,000 13513 37230
129,000 13008 37615
130,000 12950 38000
131,000 12143 38385
132,000 12037 38770
133,000 11821 39155
134,000 11496 39540
135,000 11259 39925
136,000 10824 40310
137,000 10741 40695
138,000 10251 41080
139,000 10025 41465
140,000 9781 41850
141,000 9545 42235
142,000 9355 42620
143,000 9212 43005
144,000 8854 43390
145,000 8653 43775
146,000 8558 44160
147,000 8405 44545
148,000 8109 44930
149,000 8059 45315
150,000 8303 45700
151,000 7571 46085
152,000 7349 46470
153,000 7139 46855
154,000 6929 47240
155,000 6777 47625
156,000 6645 48010
157,000 6610 48395
158,000 6379 48780
159,000 6226 49165
160,000 6153 49550
161,000 5991 49935
162,000 5774 50320
163,000 5663 50705
164,000 5610 51090
165,000 5561 51475
166,000 5262 51860
167,000 5334 52245
168,000 5252 52630
169,000 5056 53015
170,000 5025 53400
171,000 5052 53785
172,000 4978 54170
173,000 4805 54555
174,000 4798 54940
175,000 4910 55325
176,000 4967 55710
177,000 5081 56095
178,000 5186 56480
179,000 5646 56865
180,000 9788 57250
181,000 6120 57715
182,000 4576 58180
183,000 4142 58645
184,000 4045 59110
185,000 3894 59575
186,000 3724 60040
187,000 3721 60505
188,000 3560 60970
189,000 3393 61435
190,000 3299 61900
191,000 3221 62365
192,000 3133 62830
193,000 3195 63295
194,000 3031 63760
195,000 2870 64225
196,000 2846 64690
197,000 2749 65155
198,000 2721 65620
199,000 2798 66085
200,000 2747 66550

Chart 3.3 Employment status by taxable income, 2014-15

Source: Treasury estimates using Treasury’s version of STINMOD

This stacked column chart has columns at $5,000 increments of taxable income from $0 to $60,000 showing the number of people who are: in part time employment; in full time employment; unemployed; or not in the labour force at each income range. 

Income range Part time employed Full time employed Unemployed Not in Labour Force
$0 54,377 52,603 242,780 1,898,230
$0-$5,000 203,476 58,887 83,358 847,345
$5,000-$10,000 223,882 41,423 80,591 367,419
$10,000-$15,000 226,442 67,873 251,899 699,219
$15,000-$20,000 334,473 96,084 49,672 1,289,202
$20,000-$25,000 474,249 161,544 31,551 1,163,065
$25,000-$30,000 456,407 200,935 9,670 192,042
$30,000-$35,000 416,590 280,293 0 72,891
$35,000-$40,000 300,467 504,213 0 55,047
$40,000-$45,000 186,335 575,998 0 25,804
$45,000-$50,000 113,438 608,221 0 26,363
$50,000-$55,000 97,058 564,721 0 23,126
$55,000-$60,000 59,125 547,801 0 15,517

Chart 3.4 Top marginal tax rates comparison, OECD countries, 2013

Source: OECD 2014, Tax Database — Personal Income Tax Rates, OECD, Paris, viewed 24 November 2014.

Note: Numbers for Australia are for 2013-14. Australia’s top marginal tax rate for 2014-15 has increased to 49 per cent (45 per cent top statutory personal income tax rate plus 2 per cent Medicare levy plus 2 per cent Temporary Budget Repair Levy).

This chart shows the top marginal individuals’ income tax rates for all OECD countries in 2013, taking account of central government and sub-central government individuals’ income tax rates where applicable. It also shows the income threshold from which that top marginal individuals’ income tax rate takes effect, as a multiple of average earnings. Australia’s top marginal tax rate is 46.5 per cent, which is around the average for all OECD countries, however Australia’s top marginal tax rate applies from a relatively low threshold when compared to other OECD countries.

  Top tax rate - central, sub-central and social security rates (per cent) Top threshold as a multiple of average earnings
Hungary 34.5 0
Estonia 22.6 0.2
Czech Republic 31.1 0.4
Belgium 59.5 1
Ireland 52 1
Denmark 56.2 1.2
Netherlands 53.1 1.2
New Zealand 33 1.3
Iceland 44.4 1.5
Sweden 56.7 1.5
Norway 47.8 1.6
Austria 43.7 2
Australia 46.5 2.3
Poland 38.8 2.4
Finland 56.6 2.5
Luxembourg 45 3.1
Turkey 35.8 3.3
Switzerland 41.8 3.4
Mexico 31.7 4
Slovak Republic 35.1 4
United Kingdom 47 4.2
Japan 51.1 4.6
Slovenia 61.1 5.4
Greece 46 5.5
Germany 47.5 5.8
Israel 50 6.2
United States 47.7 8.5
Korea 41.9 8.7
Italy 47.3 10.1
Canada 49.5 10.6
Spain 52 11.7
Chile 39.5 12.8
France 54.9 15.1
Portugal 61.3 16.2

Chart 3.5 Use of concessions and losses, by total income, 2011-12

Source: Treasury estimates based on ATO 2014, Taxation Statistics 2011-12, ATO, Canberra.

This chart shows the extent to which certain concessions and losses were used in different income ranges in 2011-12. The chart shows that the use of reportable fringe benefits, reportable and personal superannuation contributions, and financial and property losses increased in dollar terms as total income increased.

The chart also shows that the use of these items as a proportion of total income is around 6 per cent for total incomes between $20,000 and $1,000,000. However this proportion increases significantly for total incomes below $20,000 and deceases significantly for taxable income over $1,000,000.

Total income, 2011-12 Reportable fringe benefits (average amount per taxfiler, left axis) Financial and rental property losses (average amount per taxfiler, left axis) Reportable employer and personal superannuation contributions (left axis) Total of these items as a share of total income (right axis) (per cent)
< $20,000 247 582 141 10.6
$20,000 to $50,000 1033 536 556 6.1
$50,000 to $100,000 1195 1047 1760 5.7
$100,000 to $250,000 1791 2250 4539 6.2
$250,000 to $1m 5698 6506 10743 5.8
> $1m 10923 18654 15982 2.2

Chart 3.6 Major sources of income and deductions, 2011-12

Source: ATO 2014, Taxation Statistics 2011-12, ATO, Canberra.

Notes: ‘Business income’ and ‘business deductions’ are income earned and deductions incurred by individuals carrying on a business (for example, as a sole trader). ‘Other income’ includes distributions from partnerships and trusts; taxable Australian Government transfer payments; and allowances, benefits, earnings and tips. ‘Other deductions’ includes charitable donations and the cost of managing tax affairs. ‘Superannuation contributions’ includes reportable employer superannuation contributions and personal superannuation contributions, but not superannuation guarantee contributions. ‘Reportable fringe benefits’ does not fully reflect remuneration in the form of fringe benefits as, among other things, it does not include fringe benefits below the $2,000 threshold (that are not required to be reported) or fringe benefits that are exempt from tax.

This chart shows the major sources of assessable income, non-assessable income and deductions reported in Australia’s individual income tax returns in 2011-12. Salary and wages is by far the largest source of assessable income, followed by business income and other income. Business expenses are the largest source of deductions, followed by rental deductions and work related expenses.

  $bn
Salary and wages 535.6
Work-related expenses 19.4
Business income 101.7
Business expenses 74.5
Dividend and interest income 46.3
Dividend and interest deductions 2.5
Rental income 34.0
Rental deductions 41.9
Capital gains 24.1
Capital losses 14.9
Other income 93.5
Other deductions 10.8
Reportable fringe benefits 13.2
Superannuation contributions 17.1