💸 Are Australians Paying Too Much Tax? Let’s Break It Down
It’s tax season. Your payslip’s looking thinner than expected. The question crosses your mind: Am I being taxed too much?
If you’ve ever felt that way, you're not alone. Across Australia, workers of all ages — from early-career professionals to growing families — are questioning whether the system is working for them or against them. But when we step back and look at the numbers, the story is more nuanced than it seems.
📊 How Does Australia’s Tax System Compare Globally?
Australia’s income tax system is progressive, which means higher earners pay a larger percentage of their income in tax. For the 2024–25 financial year, here’s how it breaks down:
$0 – $18,200: Tax-free
$18,201 – $37,000: 19%
$37,001 – $87,000: 32.5%
$87,001 – $180,000: 37%
Over $180,000: 45%
(Source: ATO)
Sounds high? Maybe. But in context, it's not excessive.
According to the OECD, the average tax wedge — the total taxes paid by a single worker — across member countries is 34.8%. Australia’s sits at 24.9%, putting us below the global average. (Source: ABC News)
📈 So Why Does It Feel So High?
Part of the issue lies in bracket creep — when inflation pushes wages into higher tax brackets even though purchasing power hasn’t really changed. Over time, this erodes take-home pay, making it feel like we’re being taxed more without actually earning more.
Adding to that perception, recent OECD data shows that Australia saw the fastest growth in personal income tax burden among advanced economies last year — even if we’re still technically below the average. (Source: News.com.au)
🔧 What’s Changing?
To address these concerns, the Australian government has announced staged tax cuts:
From 1 July 2026, the 16% rate drops to 15%
From 1 July 2027, it drops again to 14%
(Source: ATO – Tax Cuts 2026)
These reforms aim to ease the pressure and help Australians keep more of what they earn.
✅ Final Takeaway
Are Australians overtaxed? Technically, no. But rising costs, bracket creep, and wage stagnation create real pressure — especially for middle-income earners.
The key is not just how much we’re taxed, but how fairly and transparently the system evolves over time. With reforms on the horizon, the hope is a system that’s not only competitive, but also feels fairer for every Aussie.