Frequently Asked Questions
How is income tax calculated in Australia?
Australian income tax is calculated using a progressive tax scale — the more you earn, the higher your marginal tax rate. The current rates range from 0% (up to $18,200 tax-free threshold) up to 45% for income over $190,000. Most Australians also pay a 2% Medicare Levy. The Low Income Tax Offset (LITO) reduces tax further for lower earners.
What is GST and how does it work?
GST (Goods and Services Tax) is a 10% tax on most goods and services sold in Australia. Businesses registered for GST collect it from customers and pay it to the ATO. To add GST: multiply the price by 1.1. To remove GST from a GST-inclusive price: divide by 1.1. Our GST calculator handles both instantly.
How does the 50% CGT discount work?
If you've held an asset (such as shares or investment property) for more than 12 months before selling, you're entitled to a 50% capital gains tax discount. This means only half of your capital gain is added to your taxable income. This discount does not apply to assets held for less than 12 months or to companies.
Which Australian states have the highest payroll tax?
Payroll tax rates and thresholds vary significantly by state. Generally, rates range from around 4.75% to 6.85% depending on the state and your payroll size. Some states have higher thresholds before payroll tax kicks in. Use our Payroll Tax Calculator to see the exact rates and thresholds for your state.