If you’re working in Australia or planning to, understanding how much tax you’ll pay is essential. The individual tax rates for 2025 in Australia have been updated, and they affect how much money ends up in your pocket.
Whether you’re a student, employee, or freelancer — knowing your tax obligations can save you from surprises and help with better financial planning.
Let’s break it down in simple terms.
💡 What Are Individual Tax Rates?
Individual tax rates determine how much income tax Australians pay to the Australian Taxation Office (ATO). These rates are progressive — meaning the more you earn, the higher your tax rate will be.
Australia uses a tiered tax bracket system, so you only pay the higher rate on income that exceeds the threshold for each bracket.
🧾 Individual Tax Rates for Residents in 2025
The following are the official individual income tax rates for Australian residents for the 2024–25 financial year:
| Taxable Income | Tax Rate |
|---|---|
| $0 – $18,200 | 0% (Tax-free threshold) |
| $18,201 – $45,000 | 19% for income over $18,200 |
| $45,001 – $135,000 | 30% for income over $45,000 |
| $135,001 – $190,000 | 37% for income over $135,000 |
| $190,001 and above | 45% for income over $190,000 |
These rates do not include the Medicare Levy, which is generally 2% of your taxable income.
✅ Tip: Want to know exactly how much tax you’ll pay? Try this free Income Tax Calculator based on the latest 2025 rates.
🔄 What Changed in 2025?
In 2025, the Australian Government simplified the tax brackets by:
The 16% bracket was introduced, down from 19%, benefiting earners in the $18,201–$45,000 range.
The 30% bracket expanded up to $135,000, up from a prior cap of $120,000.
The 37% threshold now begins at $135,001 instead of $120,001, easing pressure on middle incomes.
The 45% tax applies only above $190,000 (up from $180,000)
These changes are part of the Stage 3 tax cuts, already legislated and now in effect.
👨👩👧👦 Who Do These Tax Rates Apply To?
These 2025 individual tax rates apply to:
- Australian residents for tax purposes.
- Full-time or part-time employees.
- Freelancers, sole traders, and small business owners (on personal income).
- Temporary residents and some foreign residents have different tax rates (see ATO).
💵 Example Tax Calculations
Let’s say you earn $90,000 a year:
- First $18,200 → tax-free
- Next $26,800 (from $18,201–$45,000) → taxed at 19% = $5,092
- Remaining $45,000 (from $45,001–$90,000) → taxed at 30% = $13,500
- Total Tax Payable = $5,092 + $13,500 = $18,592 (plus Medicare levy)
To avoid manual math, use the Take-Home Pay Calculator for fast results.
👩⚕️ Medicare Levy – Don’t Forget!
Most Australians also pay a 2% Medicare Levy, which helps fund the public healthcare system. It’s added on top of your income tax.
Some low-income earners and exempt individuals don’t need to pay this — check the ATO’S website for more details
🧠 Helpful Tools to Plan Your Finances
Here are a few free tools you can use:
These calculators are designed to give you instant tax insights based on your actual income and situation.
🔚 Final Thoughts
Understanding the individual tax rates for 2025 in Australia is crucial if you want to plan your finances, budget smartly, and avoid tax-time surprises. The ATO has made the system simpler, but using the right tools makes it even easier.
So, before your next pay cycle hits, head over to SalaryCalculators.com.au and take control of your tax with just a few clicks!