Australia Tax Rates

Income Tax Brackets

Australia uses a Pay As You Go (PAYG) withholding system with five progressive income tax brackets for residents. The tax-free threshold is AUD 18,200, meaning the first AUD 18,200 of taxable income is not taxed. From 1 July 2026, income from AUD 18,201 to AUD 45,000 is taxed at 15% (reduced from 16%), income from AUD 45,001 to AUD 135,000 at 30%, income from AUD 135,001 to AUD 190,000 at 37%, and income exceeding AUD 190,000 at 45%. A further reduction to 14% for the second bracket is legislated for 1 July 2027. Non-residents do not receive the tax-free threshold and are taxed from the first dollar of Australian-sourced income at different rates.

Corporate Tax

Australia's standard corporate tax rate is 30% for companies that do not qualify as base rate entities. A reduced rate of 25% applies to base rate entities, which are companies with an aggregated turnover of less than AUD 50 million and no more than 80% of their assessable income derived from base rate entity passive income. The corporate tax system is integrated with the dividend imputation system, which allows shareholders to receive franking credits for tax already paid at the corporate level, effectively eliminating double taxation on distributed profits.

Capital Gains Tax

Capital gains in Australia are not taxed at a separate rate but are included in the taxpayer's assessable income and taxed at their marginal income tax rate. However, individuals and trusts that hold a capital asset for more than 12 months are entitled to a 50% CGT discount, effectively halving the taxable gain. This means the top effective rate on long-term capital gains is approximately 23% (being 50% of the 45% top marginal rate, plus the 2% Medicare Levy reduces the effective discount slightly). Complying superannuation funds receive a one-third CGT discount on assets held for more than 12 months. Companies do not receive any CGT discount.

VAT / Sales Tax

Australia's Goods and Services Tax (GST) is a broad-based consumption tax levied at a flat rate of 10% on most goods, services, and other items sold or consumed in Australia. Certain items are GST-free (zero-rated), including most basic food items, medical and healthcare services, educational courses, childcare, exports, and certain religious and charitable activities. Some financial supplies and residential rent are input-taxed (exempt), meaning no GST is charged but the supplier cannot claim input tax credits. The GST is administered by the ATO and is remitted through the Business Activity Statement (BAS) system.

Cryptocurrency Tax

The ATO treats cryptocurrency and other digital assets as property (CGT assets), not as currency or foreign currency. Disposing of cryptocurrency — whether by selling, exchanging, gifting, or using it to purchase goods and services — is a CGT event that may result in a capital gain or loss. If the cryptocurrency was held for more than 12 months, the 50% CGT discount applies, reducing the effective top rate to approximately 23%. Cryptocurrency received as payment for goods or services, through mining, staking, or airdrops may be treated as ordinary income and taxed at the individual's marginal rate.

Tax Treaties

Australia has a network of approximately 45 double taxation agreements (DTAs) in force, covering most of its major trading partners. These treaties are designed to prevent double taxation and fiscal evasion, and they typically allocate taxing rights between the two contracting states on various types of income including business profits, dividends, interest, royalties, and capital gains. Australia's treaty network is particularly strong in the Asia-Pacific region, reflecting its deep economic ties with countries such as Japan, China, Singapore, New Zealand, and South Korea. Australia also participates in the OECD's Multilateral Convention to Implement Tax Treaty Related Measures (MLI) and is an active participant in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).

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