I bet you don’t like paying tax.
I know I don’t.
But I also recognise that it’s important for all of us to pay our fair share to pay for our roads, police, hospitals and our politicians.
Okay maybe we shouldn’t have to pay for the politicians – now that’s being a little bit nasty isn’t it?
Because at present no one would really want to be a politician – would they?
But back to tax…
The latest taxation statistics for 2017-18 show there were 14,907 Australians who declared a total income of more than $1 million in 2017-18.
Combined, they reported $37.4 billion of income — an average of just over $2.5 million each — and collectively paid $15.9 billion in tax, a total tax rate around 42.5 per cent.
Higher earning taxpayers paying zero net tax:
|Taxpayer total income||Number of people who did not pay tax|
|$100,001 to $150,000||1,069|
|$150,001 to $180,000||262|
|$180,001 to $250,000||355|
|$250,001 to $500,000||308|
|$500,001 to $1m||100|
The Australia Institute’s senior research fellow David Richardson said it wasn’t just millionaires getting away with tax minimisation.
Now I’m not suggesting they were cheating the tax man
For 54 of those millionaire earners, they paid no tax because they had organised their affairs so they had sufficient deductions to lower their taxable income below the tax-free threshold of $18,200.
And for whatever reason, one other million-dollar earner fell below the threshold but still paid $721 in tax that year.
A further 19 people who earned more than $1 million that year declared taxable incomes above the tax-free threshold but still managed to avoid paying tax, presumably due to various offsets and rebates.
Negative gearing property remained a popular tax break but the bulk of these wealth Aussies gave donations and gifts that were tax deductible totalling just over $1.4 billion and made up almost three-quarters of the gap between total and taxable incomes.
And now I know some people are going to say this is unfair.
They’re going to suggest there are some people on the minimum wage paying more tax on those with multi million dollar incomes.
As I said the beginning, I think it’s important for all of us to pay a fair share of tax, but I also recognise the importance of structuring your affairs to legally minimise the amount of tax you need to pay.
In fact that’s something our team at Metropole Wealth Advisory specialise in.
Top salaries by occupation
The ATO statistics also explain average taxable income by occupation and state.
- Only 3.4 per cent of all workers earned more than $180,001 in 2017-18
- 16.1 per cent in the $87,001 to $180,000 bracket.
- More than 40 per cent had a taxable income between $37,001 and $87,000,
- 21.7 per cent earned between $18,201 and $37,000, and
- Almost 19 per cent earned $18,200 or less.
The lowest-earning professions were dominated by hospitality, with farm work and baggage handlers also featuring.
Fast-food cooks are the lowest earners (average income $18,608), followed by hospitality employees ($19,102), hospitality apprentices or trainees ($19,431), farmers ($20,089), farm, forestry or garden workers, apprentices or trainees ($20,686), and baggage handlers ($22,244).
Top paid occupations:
|Occupation||Average Taxable Income|
|Internal medicine specialist||$301,129|
|Other medical practitioners||$215,728|
|Judicial or other legal professionals||$184,958|
|Chief executive officer or managing director||$170,336|
The lowest average wages were recorded in Western Australia for fast food cooks, hospitality employees, and trainees or apprentices in hair dressing, hospitality and recreation. All received below $3000.
The lowest average taxable incomes recorded were for trainees apprentices in the food, drink or meat processing industry in South Australia, and apprentices and trainees in hospitality, farm or forestry work in Queensland.
All three groups reported incomes below $17,000.
The lowest income area across NSW was 2308 (Newcastle University) on $21,054, while Victoria’s 3889 (Manorina, Cabbage Tree Creek) was the bottom of the state with a reported income of $27,079.
In Queensland the highest income earners were in the Ascot and Hamilton area, at $108,288, while postcode 4732 (Tablederry, Muttaburra) reported the lowest income in the state at an average $14,681.
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