Understanding Australian Tax Rates: A Look from 2015 to Today

Tax rates are the backbone of any nation’s revenue system, influencing how individuals and businesses plan, save, and grow. In Australia, both personal and corporate tax rates have undergone several changes over the years. Whether you're a business owner, investor, or everyday taxpayer, understanding these shifts is essential for effective financial decision-making.

This blog explores how Australia’s tax rates have evolved from 2015 to the present day, offering insight into what changed, why it changed, and what it means for taxpayers.

Personal Income Tax Rates: 2015 to Present

Let’s start with the tax rates for individual Australian residents. These rates are structured in tiers (or brackets), where the amount of tax increases progressively with income. Here's a comparison of key changes over the years.

2015–16 Tax Year 

$0 – $18,200: Nil
$18,201 – $37,000: 19%
$37,001 – $80,000: 32.5%
$80,001 – $180,000: 37%
$180,001 and over: 45%
Note: A 2% Medicare Levy applied, and a 2% Temporary Budget Repair Levy was charged on incomes above $180,000.

2016–17 Tax Year 

$0 – $18,200: Nil
$18,201 – $37,000: 19%
$37,001 – $87,000: 32.5%
$87,001 – $180,000: 37%
$180,001 and over: 45%

2018–19 Tax Year 

$0 – $18,200: Nil
$18,201 – $37,000: 19%
$37,001 – $90,000: 32.5%
$90,001 – $180,000: 37%
$180,001 and over: 45%
Note: The Low and Middle Income Tax Offset (LMITO) was introduced, providing up to $1,080 in relief for those earning between $48,000 and $90,000.

2019–20 Tax Year 

$0 – $18,200: Nil
$18,201 – $37,000: 19%
$37,001 – $90,000: 32.5%
$90,001 – $180,000: 37%
$180,001 and over: 45%
Note: The LMITO continued, and the upper threshold for the 32.5% bracket was raised from $87,000 to $90,000 as part of the Stage 1 tax cuts.

2020–21 Tax Year

$0 – $18,200: Nil
$18,201 – $45,000: 19%
$45,001 – $120,000: 32.5%
$120,001 – $180,000: 37%
$180,001 and over: 45%
Stage 1 & Stage 2 Reforms (2020–21):

• The 19% threshold was raised to $45,000.
• The 32.5% threshold increased from $80,000 to $120,000.
• LMITO was temporarily retained.

2021–22 Tax Year 

$0 – $18,200: Nil
$18,201 – $45,000: 19%
$45,001 – $120,000: 32.5%
$120,001 – $180,000: 37%
$180,001 and over: 45%
Note: LMITO continued.

2022–23 Tax Year $0 – $18,200: Nil
$18,201 – $45,000: 19%
$45,001 – $120,000: 32.5%
$120,001 – $180,000: 37%
$180,001 and over: 45%
Note: Final year for LMITO.

2023–24 Tax Year 

$0 – $18,200: Nil
$18,201 – $45,000: 19%
$45,001 – $120,000: 32.5%
$120,001 – $180,000: 37%
$180,001 and over: 45%
Note: LMITO was not available.

2024–25 Tax Year (Current) 

$0 – $18,200: Nil
$18,201 – $45,000: 16%
$45,001 – $135,000: 30%
$135,001 – $190,000: 37%
$190,001 and over: 45%
Note: Revised Stage 3 tax cuts now in effect.

Stage 3 Tax Cuts (Effective from 1 July 2024) Originally announced in 2018 and revised in 2024:

Impact: Flatter tax system benefiting middle to high-income earners, boosting take-home pay and aiming for economic growth.

Superannuation Contributions Tax While not strictly part of income tax, superannuation tax has also evolved:

• Before 2017: Concessional contributions taxed at 15%.
• From 1 July 2017: Cap reduced to $25,000. Division 293 tax (30%) applied above $250,000 income.
• From 1 July 2021: Cap increased to $27,500.
• From 1 July 2024: Cap increased to $30,000.

From 2015 to today, Australia’s tax landscape has evolved toward easing the burden on low-to-middle-income earners and supporting small businesses. With revised Stage 3 tax cuts now in place, we are seeing a more simplified system with reduced rates for many taxpayers.

Understanding these shifts isn't just for accountants or CFOs. Whether you're managing a household or running a business, staying across tax changes helps you make smarter financial choices.

If you need help navigating how these tax rate changes affect you or your business, get in touch with our team. We're here to simplify the complex and help you make sense of the numbers that matter.