Understanding the answer to ‘how much tax do I pay in Australia?’ is key to ensuring you’re meeting your obligations as a private individual or as a business owner. By gaining clarity on what you will owe and knowing ahead of time what to set aside money for, you can prevent yourself from facing a costly bill or penalty later down the line.
If you’re wondering, with an’’ABN how much tax do I pay?’, we’ve collated all the resources and information you need to make sense of the Australian tax system. As trained tax professionals, we’re here to offer advice and guidance to provide peace of mind. You can leave the stress of tax compliance in our capable hands. Here’s everything you need to know:
Australian Individual Taxes
As a resident individual in Australia, you’re required to pay certain taxes on any income you make, alongside certain taxes from other sources, such as capital gains tax, if you sell a property. Knowing the answer to ‘how much tax do I pay?’ depends on the amount of money you earn, requiring you to submit a yearly tax return. While an employer takes taxes out of your wages before they are paid to you, you still need to file a personal individual tax return each year.
What are the individual tax rates in Australia?
The tax rate you pay in Australia as a resident typically depends on the income you bring in. Depending on which threshold you pass, the percentage of your income that is taxable will vary. To understand your personal obligations, using a how much tax do I pay in Australia calculator is the ideal solution, such as this official calculator available from the ATO.
What other taxes might apply?
Alongside income tax, other taxes may apply if you’re a citizen of Australia. These include:
- A Medicare levy, which helps to fund Australia’s public health system, totalling 2% of your taxable income.
- A Medicare levy surcharge where you earn above a specific income threshold and do not have private patient hospital cover, up to 1.5% of your taxable income.
- Working holiday maker tax, where you work in Australia from another country, with tax withheld at 15% of your earnings.
- First home saver scheme, where voluntary pre and post-tax contributions are made into your super fund to save towards your first home.
- Compulsory repayments for study and training support loans.
Other taxes, such as capital gains tax, also apply if you sell property or in specific circumstances like investment and cryptocurrency sales. ‘How much tax do I pay on crypto in Australia?’ is important to know to ensure you meet your legal obligations.
Australian Business Taxes
When looking at ‘How much tax do I pay for Australia?’, businesses have a different set of rules and obligations to individuals. Alongside standard company tax rates, businesses are also expected to report on and pay capital gains tax, goods and services tax and payroll tax as applicable to the size and type of business. These include:
Company tax rates are the basic tax you pay as a business in Australia – typically 25 to 30%. The most recent tax rates can be found on the ATO here.
Capital Gains Taxes
Capital gains tax is an obligatory percentage of tax you pay when your business sells an asset, such as property, at a profit or gain. You can find the latest details on this tax here.
Goods and Services Tax
Goods and services tax is a financial obligation for any business that offers goods, services and other items sold or consumed in Australia, usually at a 10% rate. Find out more about this tax here.
Payroll taxes apply to all wages you pay employees of your company, which are calculated based on your state or territory. You can find the latest information on payroll tax here.
Land taxes apply to the ownership of land within a particular state and includes several tiers of fixed rates plus up to 2.55% of the value of the land itself, alongside other surcharges and costs. The latest information on land tax in Victoria can be found here, or check relevant state based rules on government websites.
FAQs about Taxes You Owe in Australia
How much tax do I withhold from employees?
When calculating the amount of tax you withhold from employees, it’s essential to be accurate and up to date in your current payroll obligations. Using an official calculator, such as the one provided here by the ATO, provides the insight and guidance necessary to withhold the correct amount for every employee you hire.
How do I file my taxes?
You’ll need to complete a tax return within the specified deadline, whether a business or individual.
How do I find my tax file number?
If you’re struggling to source your tax file number, the first place to look is your ATO app or online account, where your TFN should be listed. If you’re still struggling to find your number, our complete guide to TFNs provides all the information you need here.
Tax Compliance Matters
Ensuring you meet tax compliance is vital in Australia, whether you’re a citizen or a business. If you’d like to avoid potential penalties and ensure you’re meeting all your obligations, working with tax specialists is the ideal way to gain peace of mind. Our team at Pherrus has extensive experience supporting our clients with tax preparation and filing.
Whether you’re an individual looking for essential support or a business needing help with complex finances, our team is here to help. Get in touch with us directly to discuss your tax requirements or discover more of our relevant guides and articles to learn more about the Australian tax system. Our expert team of professionals are here to support you.