Income Tax

Income Tax in Australia is paid by most employees on a Pay as you Earn basis.

The Australian Tax Office (ATO) have rates set for each tax year beginning on the 1st of July each year.

The Income Tax rates for 2011/2012 are:

zero on the first $6,000 of income
15% on the next $31,000 ($6,001 – $37,000)
30% on the next $43,000 ($37,001 – $80,000
37% on the next $100,000 ($80,001 – $180,000)
45% on all remaining income above $180,000

The low income tax rebate for 2011-12 means that most people earning under $16,000 will pay no tax.

The Income Tax rates for 2009/2010were:

zero on the first $6,000 of income
15% on the next $29,000 ($6,000 – $35,000)
30% on the next $45,000 ($35,000 – $100,000
38% on the next $80,000 ($100,000 – $180,000)
45% on all remaining income above $180,000

There is a low income offset rebate available to all people on low incomes, and this, for the 2009/10 tax year, means that most people earning under $15,000 will pay no tax.

Almost everyone in Australia needs to lodge a tax return every year with the ATO, even those who pay no tax need to advise the ATO of that to avoid being chased for non lodgement of tax returns.

Most Tax returns need to be completed by the end of October, 4 months after the tax year ends on 30th June. Taxpayers registered with a Tax Agent are allowed to have that time limit extended to the deadline alloctaed to that particular Tax Agent.

Most employees will have tax calculated based on their pay period, and many taxpayers end up paying too much tax during the year. Consequently, a large number of taxpayers actually get tax refunds at the end of each tax year, and normally within 14 days of lodginng their end of year tax return.

In 2006-07 there where 11.8 million taxpayers, and 9.9 million of these received refund payments. Many refunds are in the region of $500 to $1,000.

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