Does Australia use progressive tax brackets?

Yes, Australia uses a progressive income tax system where higher portions of income are taxed at higher rates. The top marginal rate is 45.0%. This means your effective (average) rate is always lower than the top bracket rate. For the 2023-2024 financial year, the first A$18,200 of your income is tax-free. Income between A$18,201 and A$45,000 is taxed at 19%. From A$45,001 to A$120,000, the rate is 32.5%. The next bracket, A$120,001 to A$180,000, is taxed at 37%. Any income over A$180,000 is hit with the top marginal rate of 45%. Keep in mind these rates don't include the Medicare Levy, which adds another 2% for most residents, bringing the effective top rate to 47%. So, if you earn A$200,000, you aren't paying 47% on the whole amount, only on the portion above A$180,000. Understanding these brackets is key to budgeting. If you're planning a move, project your income to see which brackets you'll fall into and get a clearer picture of your take-home pay.