For many Australians, tax season is a stressful time. Keeping up with the most recent changes to the 2024 tax brackets can make the process easier.
This article will give you an idea of how much tax you will pay during the 2023-24 financial year if you are an Australian worker. In this blog, we will cover a tax overview, the Medicare levy, and the different tax brackets that are used in Australia. You’ll pay a different rate of tax depending on one of the following situations you follow:
- Resident tax rate
- Non-resident tax rates
- Working Holiday tax rates
Tax overview
Taxes paid by people and corporations to the government in Australia are used to pay for public services and goods including national defence, infrastructure, and education.
Although tax rates can change between years, the 2024 tax brackets remain unchanged for the upcoming financial year.
Australian taxpayers may pay the same amount on tax if they have earned the same amount as the previous year.
What is the Medicare levy?
The Australian government imposes the Medicare levy to fund the public healthcare system, called Medicare. Currently, the Medicare levy is set at 2% of an individual’s income, with the money being used to help relieve costs associated with medical services in Australia.
Example: Jane earns $70,000 for the financial year. Jane will be required to pay $1,400 ($70,000 x 2%) for the Medicare levy over and above her income tax bracket rates.
Resident tax rates
What is a resident for tax purposes?
A person who resides in Australia has a permanent residence there and spends more than half of the income year there is considered a resident for tax reasons.
The following lists the resident tax rates.
| Taxable income | Tax on this income |
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 19 cents 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 |
Example: Sam is a resident that earns $80,000 per year. Sam will be required to pay $5,092 and 32.5c for every $1 over $45,000.
Sam earns $35,000 ($80,000 – $45,000) over $45,000, so she must pay $11,375 ($35,000 x 32.5 cents).
By adding the $11,375 and $5,092, we get Sam’s income tax payable of $16,467 for the year.
Including the Medicare levy of 2% ($80,000 x 2% = $1,600), Sam has a total tax payable of $18,067.
Foreign resident tax rates
What is a foreign resident for tax purposes?
A non-tax resident is referred to as a foreign resident. In essence, it is everyone who is not regarded as a resident for tax purposes.
The following lists the non-resident tax rates.
| Taxable income | Tax on this income |
| 0 – $120,000 | 32.5 cents for each $1 |
| $120,001 – $180,000 | $39,000 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $61,200 plus 45 cents for each $1 over $180,000 |
Example: Dale is a foreign resident and earns $80,000 in Australia. Dale is required to pay 32.5 cents for each $1.
$80,000 x 32.5 cents = $26,000
As foreign residents are exempt from paying the Medicare levy, David’s total tax payable is $26,000.
Working Holiday Maker (WHM) tax rates
What is a Working Holiday Maker for tax purposes?
Young adults can travel to Australia for a year on a 12-month vacation under a programme run by the Australian government, however, they must work part-time during the trip. Working Holiday Makers are people who work in these circumstances.
The following list includes the working holiday maker tax rates.
| Taxable income | Tax on this income |
| 0 – $45,000 | 15% |
| $45,001 – $120,000 | $6,750 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $31,125 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $53,325 plus 45 cents for each $1 over $180,000 |
Example: Callum is a Working Holiday Maker, and he earns $80,000 while he is in Australia. Callum is required to pay $6,750 plus 32.5 cents for each $1 over $45,000.
Callum earns $35,000 over $45,000 ($80,000 – $45,000), so he is required to pay $11,375 ($35,000 x 32.5 cents)
By adding $6,750 and $11,375, Callum has an income tax payable of $18,125.
As Working Holiday Makers are not required to pay the Medicare levy, John has a total tax payable of $18,125.
Use an online tax calculator!
Quickly calculate your own taxes, without the hassle of calculating them yourself by using One Click Life’s online tax calculator. One Click Life is an online tax adviser, that ensures that you get the most out of your tax return.