Tax system in Australia
Australian tax residents are generally taxed on worldwide income. Foreign residents are taxed on Australian-source income. Personal income tax is progressive, and the Medicare levy of 2% usually applies on top for residents.
Companies pay 25% if they qualify as base-rate entities or 30% under the general company rate. Capital gains are brought into the income-tax system rather than taxed under a separate flat CGT rate, with a common 50% discount for individuals who hold assets more than 12 months.
Australia does not levy a general net wealth tax or a federal inheritance or estate tax. State stamp duties, land tax, superannuation death-benefit tax and later CGT on inherited assets can still create wealth-transfer costs.
Tax rates at a glance
- Income tax
- 0% - 45%Progressive
- Wealth tax
- 0%
- Inheritance tax
- 0%
- Capital gains tax
- Marginal (often 50% discount)
- Corporate tax
- 25% / 30%
- Dividend tax
- Marginal + franking credits
- GST
- 10%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsFoundersInvestorsProperty owners
Watch out for
- Australia is not a low-tax country for high personal incomes. The top rate is 45% before the Medicare levy.
- No inheritance tax does not mean succession is tax-free. Super death benefits and CGT on later disposal of inherited assets still matter.
- State stamp duty and land tax can dominate property-purchase economics more than the federal income-tax rate.
- Division 7A, residency tests and controlled foreign company rules can surprise founders moving money between companies and themselves.
Frequently asked questions
Is Australia a high-tax country?
For individuals, yes at higher incomes. Progressive rates reach 45% plus Medicare levy. Company tax is more moderate at 25% or 30%, and there is no general wealth or inheritance tax.
Does Australia have a wealth tax?
No. Australia does not levy a general annual net wealth tax.
Does Australia have inheritance tax?
No federal inheritance or estate tax currently applies, but other taxes can still arise around superannuation and capital gains.