2022-2023 At a Glance: Taxable Income Rates in Australia
Published on April 27, 2023
2022-23 Income Tax Rates for Australian Residents
The Australian Tax Office (ATO) is responsible for collecting income tax from working Australians during each financial year. In Australia, the financial year starts on 1st July and concludes on 30th June the following year.
Keep in mind that we are currently in the 2022-23 financial year which ends on 30th June 2023.
The tax brackets and rates applicable to Australian residents for this financial year can be found below:
| Income Thresholds | Tax Rate | Tax Payable |
|---|---|---|
$0 to $18,200 | 0% | N/A |
$18,201 to $45,000 | 19% | 19c for each $1 over $18,200 |
$45,001 to $120,000 | 32.5% | $5,092 plus 32.5c for each $1 over $45,000 |
$120,001 to $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 |
Source: Australian Taxation Office (ATO)
If you’re unsure or have any hesitations with your taxes, consider getting bookkeeping services or perhaps a personal accountant.
How Is Income Tax Calculated in Australia?
1. For Individuals
2. For Businesses
Similar to individuals, businesses are also subject to different tax rates. The taxation system in Australia is arranged in such a way that calculation methods depend on a business’ structure – may it be a sole trader, partnership, trust, or company.
As a business owner, you may also claim tax deductions for operating expenses, including employee wages, rent, utilities, and interest on loans. As for capital expenses, you might want to look into the possible claims you can make when purchasing equipment or vehicles.
Pro tip
Learn the distinction between immediate deductions and those that need to be depreciated over time.
3. For Foreign and Temporary Residents
Foreign and temporary residents working in Australia are subject to different tax rates than residents. The main difference is that foreign residents do not have a tax-free threshold.
Don’t Let Taxes Stand in the Way of Your Success
Understanding your tax obligations doesn’t have to be a headache. By learning the basics – your tax threshold, possible deductions, and requirements – you get to make sure that you’re on the right side of the taxman while keeping more of your hard-earned money in your pocket.
The Bookkeeping Studio is here to help make the tax experience a breeze for you. With our support, you can make smart decisions and enjoy the financial rewards that come with them. The best part is that you’ll get peace of mind, knowing you’re in good hands. Reach out to us today.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
