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As the 2023 financial year is coming to an end, it is important to understand the Australian tax rates and how it will impact you financially. In this article, we will explore the marginal tax rates in Australia in 2023 and how it is treated if you are an Australian tax resident or a non-tax resident.  

 

What is the marginal tax rate?

The marginal tax rate is the amount of additional tax for every dollar earned. In Australia, there are currently five tax brackets, with the highest being for individuals who earn over $180,000 per year. The tax rate for this bracket is currently 45%.  

 

It is important to note that tax brackets and rates can change from year to year. 

So, what will the tax rates be in Australia in 2023?  

 

The table below shows the tax rates in Australia. 

 

ATO tax rates 

  

Taxable income 

Resident tax 

Non tax resident 

 $0-$18,200 

Nil 

32.5 for each $1 

$18-201 – $45,000 

19c for each $1 over $18,200 

32.5c for each $1 

$45,000 -$120,000 

$5,092 plus 32.5c for each 

$1 over $45,000 

32.5c for each $1 

$120,001 - $180,000 

$29,467 plus 37c for each 

$1 over $120,000 

$39,000 plus 37c for each 

$1 over $120,000 

$180,000 and over 

$51,667 plus 45c for each 

$1 over $180,000 

$61,200 plus 45c for each 

$1 over $180,000 

 

It is important to understand that the highest tax rate for both resident and non-tax residents is 45%.  

 

So, how does this information impact you? If you are an individual who earns over $180,000 per year, you will continue to be subject to the highest tax rate of 45% in 2023. If you are a non-tax resident you are paying $10,000 more compared to a tax resident on the highest tax scale. 

 

Therefore, it is need to undertake proper tax planning before end of financial year to lower your tax rate.  

 

Also below is a summary of tax differences between an Australian tax and non-tax resident.   

 

Resident for tax purposes 

Non resident for tax purposes 

Lower tax. Tax free threshold 

Higher tax. No tax-free threshold 

Tax on worldwide income 

Only taxed on Australian sourced income (most commonly Aust real property) 

Pay Medicare levy 

No Medicare levy 

Interest income assessed at taxpayer’s 

marginal tax rate 

Interest taxed at flat 10%, or 45% if no overseas 

address (or TFN) provided 

Liable for CGT on worldwide assets 

CGT only on “taxable Australian property” (most commonly Aust real property) 

 

One resource that can be helpful in navigating tax laws and regulations is Max Accountants. Max Accountants is a professional accounting firm based in Australia that offers a range of services, including tax advice and compliance. Their team of experts can help individuals and businesses understand their tax obligations and maximize their financial position. 

 

Newer: Low and middle income earner tax offsets to be hit in 2023 financial year
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