EugeneS Posted May 6, 2012 Share Posted May 6, 2012 Hi folks! I wonder, how much money is being paid in taxes in OZ? According to my brief investigation (mostly from the internet), I've concentrated it in the list below.However it seems a bit strange to me and I'll explain why.. According to my knowledge (again - internet and people who I speak to in OZ), the standard of living is very high in OZ. And by saying that I mean the quality and availability of employment, poverty rate, hours of work required to purchase necessities, number of vacation days per year, affordable (or free) access to quality healthcare, quality and availability of education, cost of goods and services, economic and political stability and more... Considering the above, the taxes not seem to be very high comparing to the taxes in Scandinavian countries for example, which also offer a very high standard of living but the taxes there are much higher. Partly due to high social security payments (which as far as I understand does not even exist in OZ??). Could someone review the below list and correct me if I miss anything? If the below is correct, I'd be interested to find an explanation for this difference. So the first and the most significant - Personal Income Tax. Which is described pretty simple in the below table: [TABLE=width: 500] [TR] [TD]Taxable income[/TD] [TD]Tax on this income[/TD] [TD]Effective tax rate[/TD] [/TR] [TR] [TD]0-6K$[/TD] [TD]-[/TD] [TD]0%[/TD] [/TR] [TR] [TD]6K$-37K$[/TD] [TD]15c for each $1 over $6,000[/TD] [TD]0 – 12.6%[/TD] [/TR] [TR] [TD]37K$-80K$[/TD] [TD]$4,650 plus 30c for each $1 over $37,000[/TD] [TD]12.6 – 21.9%[/TD] [/TR] [TR] [TD]80K$-180K$[/TD] [TD]$17,550 plus 37c for each $1 over $80,000[/TD] [TD]21.9 – 30.3%[/TD] [/TR] [TR] [TD]180K$ and over[/TD] [TD]$54,550 plus 45c for each $1 over $180,000[/TD] [TD]30.3 – less than 45%[/TD] [/TR] [/TABLE] Capital gains tax - this one is obviously irrelevant for those who does not have any investments into capital assets. Goods and Services Taxes - Regular VAT (value added tax), which is 10% of most supplied goods and services. Property Taxes and Excise Taxes - those are the taxes for certain property (usually commercial and hence seems to irrelevant?) and taxes for goods like cigarettes, alcohol, fuel etc... Now that seems to be just it. So if we take, for example, a salary of 60K$ a year, the overall tax will be 4,650+0.3*(60,000-37,000)=11550$, which is just below 20%! Then if I add here the VAT, the overall tax will build up to ~30%, as far as I see it.. Which again - is not much.. Will be happy to get some replies here. Thanks! Eugene Link to comment Share on other sites More sharing options...
Guest canadiantooz Posted May 6, 2012 Share Posted May 6, 2012 You are spot on as this is my initial analysis as well. I think this is very competitive. Cheers Link to comment Share on other sites More sharing options...
Guest Mattt Posted May 6, 2012 Share Posted May 6, 2012 I wouldn't consider VAT as part of income tax. The fact that VAT in Australia is low at 10% doesn't mean anything in isolation - another country could have 20% taxes but half the price of the nett goods. Link to comment Share on other sites More sharing options...
fleabo Posted May 7, 2012 Share Posted May 7, 2012 There are fewer things that you get here that are free at the points of use. Or in other words, you have choice as to which services you pay for (from your taxed income) and access, and those which you decide not to have. When you live here, you will find out (school fees, doctor fees, prescriptions, dental, etc.) - it all adds up. And when you add it up, you end up paying just as much/little as you do elsewhere in the developed world, after all, people generally don't go to work for nothing, and therefore have to be paid. Link to comment Share on other sites More sharing options...
RockDr Posted May 7, 2012 Share Posted May 7, 2012 there's also UK national insurance vs Aus superannuation. one is deducted from wages, the other is considered to be on top of wages. Link to comment Share on other sites More sharing options...
EugeneS Posted May 7, 2012 Author Share Posted May 7, 2012 after all, people generally don't go to work for nothing, and therefore have to be paid. No argue about that :wink:. However still there are countries which demand much higher taxes to support high standard of living comparing to OZ. Eventually the money must be taken from somewhere.. Take me for instance (not UK), I pay much higher income taxes in addition to 5% healthcare tax (comparing to the 1.5% in OZ, and even this in case you earn more than 75K$) and social security which is about ~6% of may salary. Eventually it all sums up to more than 30% of my salary and this is without taking into account excise taxes on gas etc... And after all that I'm not even close to all the public services available for free (or practically free) in OZ. I just want to understand how this situation can happen? Or in other words, where the money comes from?? :biggrin: Link to comment Share on other sites More sharing options...
EugeneS Posted May 7, 2012 Author Share Posted May 7, 2012 there's also UK national insurance vs Aus superannuation. one is deducted from wages, the other is considered to be on top of wages. Hi there! Thank you for your reply! Can you please provide some details regarding the Aus superannuation you've mentioned? I'm not familiar with it? Is it an additional tax or is it just included as a part of income tax? Thank you! Link to comment Share on other sites More sharing options...
RockDr Posted May 7, 2012 Share Posted May 7, 2012 in australia employers have to pay 9% of your salary into a superannuation fund which you can access when you reach retirement age. The state pension is as far as I understand it just a top up fund for those who don't have enough to survive on. So if you look at how much money you get NET out of the total money your employer pays, rather than just your salary, you'll find the total tax/etc comes out closer to what you'd expect when comparing to countries where the state pension scheme is fully paid for by taxes. Link to comment Share on other sites More sharing options...
fleabo Posted May 7, 2012 Share Posted May 7, 2012 May be you should be asking the question 'where is my money currently going' if you are paying so much but receiving so little? No argue about that :wink:.However still there are countries which demand much higher taxes to support high standard of living comparing to OZ. Eventually the money must be taken from somewhere.. Take me for instance (not UK), I pay much higher income taxes in addition to 5% healthcare tax (comparing to the 1.5% in OZ, and even this in case you earn more than 75K$) and social security which is about ~6% of may salary. Eventually it all sums up to more than 30% of my salary and this is without taking into account excise taxes on gas etc... And after all that I'm not even close to all the public services available for free (or practically free) in OZ. I just want to understand how this situation can happen? Or in other words, where the money comes from?? :biggrin: Link to comment Share on other sites More sharing options...
Guest RichB Posted May 7, 2012 Share Posted May 7, 2012 May be you should be asking the question 'where is my money currently going' if you are paying so much but receiving so little? Our money is being blown on refugees and lots of other wastage which has no benefit at all for us the people who are paying it.. The government here and likewise in other countries are a corporation and are just out to squeeze as much money out of us as they can, with their never ending taxes, fees, and daft surcharges..I guess England is worse though..the population doesnt seem to mind being blatantly bled dry... Link to comment Share on other sites More sharing options...
EugeneS Posted May 7, 2012 Author Share Posted May 7, 2012 May be you should be asking the question 'where is my money currently going' if you are paying so much but receiving so little? This is a good question and I've been asking it for too long right now.. I guess that this is one of the main reasons which made me seek for a better life in OZ. Anyway, just to make myself more clear, my initial question was not "Why are the taxes so low in OZ?", but "Maybe I miss something?". BTW, as I already mentioned, all the countries which provide very high living standards take their price for that. And I have no problem with that since everything has to be paid for. Just was curious how a country can maintain high standards of living without being paid appropriately? Link to comment Share on other sites More sharing options...
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