A Guide to Australia’s Tax Types

1. Company income tax

Companies incorporated in Australia are taxed on their worldwide income, whether earned in Australia or overseas. Company tax is generally levied on net income; profits from selling assets are also taxable, alongside ordinary business income. Companies also potentially pay capital gains tax and Fringe Benefits Tax. The standard company tax rate is 30%; smaller companies (broadly, those with aggregated turnover under $50 million and no more than 80% passive income) pay the lower “base rate entity” rate of 25%. A company’s tax losses carry forward to offset future income, with no time limit on how long they can be carried forward, subject to meeting the relevant tests.

2. Individual income tax

Australian tax residents are taxed on income from all sources, in Australia and overseas; non-residents are taxed only on their Australian-sourced income. Rates differ by residency: residents pay individual income tax from 0% up to 45%, plus a 2% Medicare levy for most taxpayers (with reductions or exemptions for lower incomes). Non-residents are taxed from 32.5% up to 45%, with no tax-free threshold and no Medicare levy. The government reviews and adjusts the income thresholds and rates periodically. For FY2025-26, the resident individual brackets are:

Our tax calculator can estimate your outcome based on these current rates.

3. Interest withholding tax

If an Australian company borrows from a non-resident lender, interest paid to that lender is generally subject to a 10% withholding tax.

4. Capital gains tax (CGT)

Under Australian tax law, assets acquired on or after 20 September 1985 are potentially subject to capital gains tax when disposed of. Assets acquired before that date are generally exempt.

5. Dividend income

Australia has taxed dividend income since 1 July 1987. Australia (and New Zealand) use a dividend imputation system, under which shareholders receive a credit for company tax already paid on the profits behind the dividend (a “franking credit”), reducing or eliminating further tax on that income. Different rules apply to dividends paid to foreign shareholders depending on whether the underlying profit has already been taxed.

6. Stamp duty

Stamp duty is a state tax, payable on transactions like mortgage registrations, share transfers, and property purchases. Because it’s state legislation, the rules and rates differ across states and territories. As a general rule, a transaction subject to stamp duty isn’t legally effective until the duty is paid. Use our property stamp duty calculator as a starting point for an estimate.

7. Land tax

Also a state tax, land tax is levied on property owners based on the value of land they hold, above a threshold that varies by state.

8. GST

GST (Goods and Services Tax) is Australia’s equivalent of the VAT systems used in many other countries. Introduced from 1 July 2000, it’s charged at 10% on most goods and services at each stage of production and distribution. Fresh food is one of the few GST-free categories. Businesses and service providers must register with the ATO once they meet the registration threshold; GST paid on business purchases (input tax credits) generally offsets the GST charged on sales.

Tax in Australia touches almost every financial decision you make, from how you’re paid, to how you invest, to how you eventually sell an asset. If you’d like help understanding how any of this applies to your situation, get in touch.