income Tax Rates 2024 | 2024 Gotax
Get a handle of the 2024 Income tax rates that effect you
The income tax rates for Australian residents for the financial year 2023-24 are as follows:
| Income thresholds | Rate | Tax payable on this income |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 19% | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | 32.5% | $5,092 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | 37% | $29,467 plus 37c for each $1 over $120,000 |
| $180,001 and over | 45% | $51,667 plus 45c for each $1 over $180,000 |
These rates are unchanged from the previous year, and there is no talk of any reinstatement of the $1500 offset that made everyone happy for 2022.
A word of caution here, Medicare is a significant cost that can get overlooked. It is currently at 2% of your taxable income. Also consider any debts you may have for your education. If you have an existing educational debt and exceed repayment thresholds for the year, make sure you advise your employer. To not do so will almost result in a significant bill payable in next years tax.
For your guidence, here are two examples of how to calculate the tax on wages of $45,000 per year and $145,000 per year:
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Salary of $45,000 per year:
The first step is to determine the taxable income by subtracting the tax-free threshold of $18,200 from the annual salary of $45,000. This gives us a taxable income of $26,800.
Next, we need to calculate the tax payable on this income. The tax rate for income between $18,201 and $45,000 is 19 cents for each dollar over $18,200. Therefore, the tax payable on the taxable income of $26,800 is:
($26,800 - $18,200) x 0.19 = $1,524So, the total tax payable on a salary of $45,000 per year is $1,524.
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Salary of $145,000 per year:
The first step is to determine the taxable income by subtracting the tax-free threshold of $18,200 from the annual salary of $145,000. This gives us a taxable income of $126,800.
Next, we need to calculate the tax payable on this income. The tax rate for income between $45,001 and $120,000 is 32.5 cents for each dollar over $45,000. The tax rate for income between $120,001 and $180,000 is 37 cents for each dollar over $120,000. The tax rate for income over $180,000 is 45 cents for each dollar over $180,000. Therefore, the tax payable on the taxable income of $126,800 is:
($45,000 - $18,200) x 0.19 + ($120,000 - $45,000) x 0.325 + ($126,800 - $120,000) x 0.37 = $34,097So, the total tax payable on a salary of $145,000 per year is $34,097.
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