Question 1

What are the 2024-25 Australian income tax rates?

Accepted Answer

From 1 July 2024 (Stage 3 tax cuts): $0–$18,200 tax-free; $18,201–$45,000 at 19%; $45,001–$135,000 at 32.5%; $135,001–$190,000 at 37%; above $190,000 at 45%. These rates apply to Australian tax residents only — non-residents have no tax-free threshold.

Question 2

What is the Medicare Levy?

Accepted Answer

The Medicare Levy is 2% of taxable income and funds Australia's public health system. Most Australian residents pay the full levy. A low-income exemption/shading applies for incomes below approximately $26,000. High-income earners without private hospital cover also pay the Medicare Levy Surcharge (MLS, 1%–1.5%) — not included in this calculator.

Question 3

What is the Low Income Tax Offset (LITO)?

Accepted Answer

The LITO reduces income tax for lower-income earners. For 2024-25: up to $700 offset for income ≤ $37,500; phases out at 5c per $1 from $37,500–$45,000; then 1.5c per $1 from $45,000–$66,667. The offset cannot create a refund — it reduces tax payable to zero at most.

Question 4

What is Superannuation?

Accepted Answer

The Superannuation Guarantee requires employers to contribute 11.5% of ordinary time earnings (2024-25) to an employee's super fund. Super contributions are not taken from your take-home pay — they are paid on top of your gross salary. Super is taxed at 15% inside the fund (concessional contributions).

Question 5

How are Working Holiday Makers taxed?

Accepted Answer

Working Holiday Makers (visa subclass 417 or 462) are taxed at 15% on the first $45,000, then at standard non-resident rates above that. They are NOT eligible for the tax-free threshold, LITO, or Medicare Levy exemption. A separate tax return must be lodged after the tax year.

Question 6

What is the tax-free threshold?

Accepted Answer

Australian residents can earn up to $18,200 per year completely tax-free. If you are an Australian resident for the full year, you should claim the tax-free threshold from your main employer by completing a Tax File Number (TFN) declaration. Non-residents do not get a tax-free threshold.

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