If you are an Australian resident for tax purposes, you need to pay income tax on your earnings. But how does the Australian tax system work and what are the tax rates for 2023? In this blog, we will give you a brief introduction to the Australian tax system and the 2023 individual income tax rates. We will also explain what the Medicare levy is and how it affects your tax.
The Australian tax system
The Australian tax system is based on self-assessment, which means that you are responsible for reporting your income and claiming any deductions or offsets you are entitled to. You do this by lodging a tax return every year, either online, on paper or with the help of a registered tax agent.
The amount of tax you pay depends on your taxable income, which is your total income minus any deductions. The more you earn, the more tax you pay. This is called a progressive tax system.
The Australian Taxation Office (ATO) collects income tax from individuals and businesses, as well as other taxes such as goods and services tax (GST), fringe benefits tax (FBT) and excise duties. The ATO also administers various government benefits and services, such as superannuation, family assistance and child support.
The 2023 individual income tax rates
The individual income tax rates for 2023 are as follows:
Tax on this income
$0 – $18,200
$18,201 – $45,000
19c for each $1 over $18,200
$45,001 – $120,000
$5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000
$29,467 plus 37c for each $1 over $120,000
$180,001 and over
$51,667 plus 45c for each $1 over $180,000
These rates do not include the Medicare levy of 2%, which is an additional charge to help fund the public health system. The Medicare levy is reduced or exempted for some low-income earners or people who meet certain criteria¹⁴.
How we can help
If you need help with lodging your tax return or understanding your tax obligations, we can help. At GoTax, we offer online tax services for individuals and businesses. We can help you prepare and lodge your tax return quickly and easily, and maximise your refund or minimise your liability. We can also advise you on deductions, offsets and other tax matters.
Don't wait any longer - contact us today and get your tax sorted!
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