The Tax Structure in Australia is Not Your Friend



Taxes are never fun. No one likes tax time, and if you live in Australia, you might dread it. But why? Wikipedia clears up the tax structure and why most that makeover 18k are unhappy. They wrote, “On individuals, income tax is levied at progressive rates, and at one of two rates for corporations. The income of partnerships and trusts is not taxed directly but is taxed on its distribution to the partners or beneficiaries. Income tax is the most important source of revenue for the government within the Australian taxation system. Income tax is collected on behalf of the federal government by the Australian Taxation Office.”


Making Under 18k A Year?

You’re golden. Seriously, if you’re making under 18k a year, you owe zero in taxes. Though you might find it difficult to live a wealthy life, you won’t have to pay high taxes to the ATO. The exact amount you can make before tax is $18,200. The goal for anyone wanting to utilize tax strategies is to get to this bracket.


What Abou 46k?

As soon as you start making 46k or higher, you’ll move up to the next tax bracket. This will include you paying a total of $5,092, then 32.5 cents for each $1 you make over $45,000. That would mean you would pay 32.5% taxes on the $1,000 you earned over $45,000. Then, you'll have to add the $5,092 for making $45,000 or higher.


You’ve Succeeded Making Over 180k— Now What?

We don’t want to scare you. But, if you’ve already been making over 180k a year, then you know just how brutal the taxes can be. As of 2021, those that make over $180,000 a year will receive a tax bill of $51,667, and any amount you make over $180,000, you'll have to pay $0.45 for each dollar. That is 45% of your income. Once you reach this level, it's critical to look for tax strategies to get under 180,000 and into a lower bracket.


Final Thoughts

If you haven’t sought International tax services, you should. There is no reason to pay more than you should. There aren’t any awards given for paying more, so don’t do it. Seek out tax services to uncover different strategies that might work for you. This could include becoming a Pty Ltd or setting up a family trust. Almost anything is better than handing over 45% of your money to the ATO.