The good and bad about our income tax rates

An international survey has found a large gap between our income tax rates and the rest of the world, with the findings good and bad for Aussie taxpayers.

According to UK-based research company UHY Haines Norton, low-income Australians have some of the lowest taxes around the globe. But our high income earners are amongst the highest taxed.

In a survey of 20 developed countries, when calculating “take-home pay, Australia was 18th for tax on low-income earners, with only Dubai which does not tax incomes at all and Ireland, taking out less tax.

Australians earning $25,000 a year end up with about 93.6 per cent of their money in their take-home pay. This compares with only 72.6 per cent in Germany and 75 per cent in France.

However, for those earning high incomes it’s a different story, with big salaries also attracting big taxes.

Australians on $200,000 a year only take home 67.4 per cent of that about $134,800. The same high-income earners in Russia get to keep $174,000, in Japan it is $144,000 and in the US they pocket $140,000.

Worse off, however, are Italians who only get $108,000 from their $200,000, while the French get $117,500 and the Brits get $122,000.

In a report in  tax specialist Adrian Raftery, the founder of, said the results for low-income earners are not surprising, given they benefited from relief measures when the goods and services tax was introduced in 2000.

“Of concern is seeing Dubai and Ireland below Australia on the list of the lowest taxed countries, as both countries experienced a lot of pain in the global financial crisis particularly with their housing markets,” Raftery says.

“That makes me question, are low tax rates the reason for driving up property values which are unsustainable in the long term?

“If so, are we next in line for a big housing correction?

“The survey also shows that we are living in the lucky country. Boom times and comparatively low tax rates, not to mention the beaches and the lifestyle,” Raftery says.

However, UHY’s Nazzari says that compared with other “newer” economies, Australia does impose a high tax burden on its big earners.

This “income penalty” is likely to affect skilled professionals and tradesmen thinking of working in Australia which in turn can adversely affect the operating and investment performance of many companies.

“With the economy heavily dependent on the resources and services sectors, this puts us at a disadvantage in the competition for skilled workers,” Nazzari says.

“Particularly given we have low unemployment and are looking more and more to immigration to help alleviate skills shortages.

“Many high earners will be highly skilled and they are usually very mobile.

“Australia has come through the global recession relatively strongly, which gives us an opportunity to make ourselves more competitive on tax, as other countries raise taxes to shore up their public finances,” he says.



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit

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