In Australia, the tax-free threshold is the amount of income on which no tax is payable. For the 2023-24 financial year, the tax-free threshold is $18,200 for Australian residents. This means that if you are an Australian resident for tax purposes for a full year, you will not have to pay tax on the first $18,200 of your income.
If you earn less than $18,200, you are still required to file a tax return, but you can claim the tax-free threshold. If you paid tax during the financial year but earned below the tax-free threshold, you will be eligible to receive a tax refund. However, if you claimed the tax-free threshold but earned over $18,200, you will need to pay tax on the excess.
Australia has a progressive tax system, which means that the more income you earn, the higher the percentage of tax you pay. The tax rates for Australian residents for the 2023-24 financial year are as follows:
- $0 – $18,200: 0%
- $18,201 – $45,000: 19%
- $45,001 – $120,000: 32.5%
- $120,001 – $180,000: 37%
- $180,001 and over: 45% .
