Australian Income Tax Rates

From 1 July 2005 the following income tax rates apply in Australia:

0 to 6,000 - 0%
6,001 to 21,600 - 17%
21,601 to 63,000 - 30%
63,001 to 80,000 - 42%
80,001+  - 47%

Interesting contrast with our system, where higher income earners pay less and lower income earners pay more.  On the other hand, Australia has compulsory super payments they have to make which we don't...

Comments

[Che Tibby]

and those payments are a damn nuisance. there's no way to access the money even if you really, really need it. it's also a burden on employers, meaning that many people are forced to work on casual rates, so employers can avoid the payments.

keeps the unemployment stats down though.

pity about the complete lack of job security.

[Peter FitzPatrick]

I think super is an excellent idea. My problem with it is not that you can't access it, that is one of the major advantages in my view. Compulsory saving is a great notion, however I feel the government should contribute much more to lower paid workers' super for whom 9% doesn't add up to much.

While ideologically I oppose the tax cuts, I am looking forward to then.

[My Right]

Jordan - a touch simplistic to throw out Income Tax rates in isolation. Agreed it is the most substantial revenue collection, but I don't think you would get away with even proposing a 'fart tax' in Australia - those 'levies' are par for the course here.

[Rich]

Dunno about a fart tax but if the Aussies had a bullshit tax they could get the top rate down below 40% easy as...

I always thought Aus had lots of extra levies and taxes, road tolls, medicare levy. They don't have an ACC levy, but motorists and employers have to pay for 3rd party insurance which winds up costing rather more. Plus states can and do levy taxes such as stamp duty.

[Simon]

The aussies have a capital gains tax as well. The medical levy is the same as the ACC levy. The company rate is 30% so I guess like in NZ self-employed people can cap their income tax to the company tax rate. Tough cheese for salary earners. In aussie you get a tax rebate if you pay your own private medical insurance. This is the way of the future as is a low income tax-free band.

While just comparing tax rates in highly successful Singapore the rates for salaried employees is

0 to 20,000 Nil
20,001 to 30,000 4%
30,001 to 40,000 6%
40,001 to 80,000 9%
80,001 to 160,000 15%
160,001 to 320,000 19%
320,000 plus 22%

[stef]

I'm in Korea paying 4% tax, there are also levies for pension and health which the employer is supposed to match dollar for dollar (though my employer pays the whole lot including tax, utlities and lunch for me)

[Simon]

The other thing about Aussie is the income tax rates are trending down. Under National in the 1990’s the income tax rate trended down. Internationally as societies living standards rise the income tax rates fall. Strangely in NZ although incomes have increased the Labour government has actually raised tax rates. My guess for the tax increases was to buy off the left of the party while letting Cullen simply continue managing an economy we have today set up by National in the 1990’s.

[GeniusNZ]

Sometimes you just have to buy off people. Not doing so would just make too many problems.

Anyway since labour has been in charge seem to have out grown most of the rest of the developed world so the trade of may have been worth it.

[Jordan]

Simon - what about the nordic states, which tend to contradict your thesis? As their societies developed, tax rates and public services expanded.

[S Heath]

Taxpayers in Aussie have many many deductions. A friend working for the Australia arm of the same company with similar position had a $17,000 tax refund in the same year I had $300 from the one claim I could make.

Simple line item rates mean nothing, just like in Canada were I could claim medical costs, self directed retirement savings (RRSP's) and lots and lots of other things.

[Scott]

Che Tibby:
Australian employers are required to pay superannuation for employees earning over $450 a month (pre-tax income) from that employer; there are hardship mechanisms to access the money early, however they are exceedingly difficult, however you pretty much have to be dying to access the money early.

I don't believe that your thesis on the compulsory superannuation guarantee being a driving force for casualisation is correct. In fact, in many enterprise agreements (a kind of collective contract in Australia), many employers pay above the guaranteed minimum, and provide a superannuation matching scheme (so that the employer matches every dollar invested by the employee). In fact, I know of many employers who contribute up to 17 per cent to their employees superannuation, on top of healthy pay packets.

[Max Soy]

The tax rates in my motherland - land of the Soybeans:

Tax is calculated on a monthly basis. Everyone gets a tax-free threshold of Y900 a month (which is peanuts) beyond which the below are payable
0 - Y500 ($1NZ ~ Y6): 5%
Y500-Y2000: 10%
Y2000-Y5000: 15%
Y5000-Y20000: 20%
Y20K-Y40K: 25%
Y40K-Y60K: 30%
Y60K-Y80K: 35%
Y80K-Y100K: 40%
Y100K or more: 45%

Remember this is income per MONTH so multiply by 12 to give the yearly figures (or multiply by 2 to give the yearly figures in Aotearoan dollars).

I still fear whether selfishness of the general public will cave in to Brash's tax cuts. Perhaps during my winter uni break I might even come over to observe and meddle (mixed in with some tramping); as long as our equivalent institution continues in our entrenched culture of intrigue and vendettas we will never get anywhere in our lifetimes.

[Che Tibby]

scott.

you obviously do not work in the service industry! there you're lucky to make any extras at all on account of being paid in cash.

no holiday pay, no super.

[Simon]

JC, Sweden has a lower company tax rate than NZ at 28%. Employees pay about 30% up to roughly $60,000 then 50% on additional earnings. But again central govt tax rates have been coming down. Also the Nordic countries are bringing their taxes in line with the wider EU and they are trending down. Slow process though.

[Scott]

Che Tibby:

Cash-in-hand jobs are different to casual jobs (you seem to confuse the two in your two comments). Many casuals pay tax, receive their legal entitlements, etc. If you are a casual employee, you will not receive any holiday/sick leave entitlements in Australia. Given how difficult it is to run accounts with laundering cash through the system to pay cash-in-hand to employees, I doubt that it is an endemic as you would make out.

Scott.