Do we pay more tax than other nations?

Liz Gibbs • August 10, 2023

Do we pay more tax than other nations?

It depends on how you look at the statistics. Australia relies heavily on income tax, collecting 40% of tax revenue from personal income. That makes Australia the fourth highest taxing nation for personal tax in the OECD – but we were second highest in 2019 if that makes you feel better.

Take home pay on par with OECD average

But, if you are looking at take home pay there is a separate measure for that. The Employee tax on labour income looks at our take home pay once tax is taken out and benefits have been added back in. This shows that the take home pay of an average single worker is 77% of their gross wage compared to the OCED average of 75.4%. For the average worker with a family (one married earner with 2 children), once tax and family benefits are taken into account, the Australian take home pay average is 84.1% compared to the OECD average of 85.9%. All of this means that Australia is a high taxing nation but returns much of that in the form of means tested benefits.

No Social Security Contributions tax like other nations

Australia also does not have social security contributions like other nations. These contributions represent an average of 27% of the total tax take for OECD nations.

And, because Australia has a progressive tax system, the pain of taxation is felt more by higher income earners. The top 11.6% of Australian income earners contribute 55.3% of the tax revenue from personal income tax.

Tax cuts due to commence 1 July 2024

With the final round of legislated income tax cuts due to commence on 1 July 2024, this should reduce the overall dependence on personal income tax relative to corporate and other taxes.

Do we personally pay more tax than other nations?

So, do we personally pay more tax than other nations? If you are a high-income earner the answer is likely to be yes. If not, the answer is no.

Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please email us at RGA Business and Tax Accountants at reception@rgaaccounting.com.au . All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.

< Older Post

Newer Post >

Cut Waste, Boost Profits: A Simple 5-Step Process

By Liz Gibbs • May 15, 2025

Did you know that waste can eat up as much as 30% of your operating costs? That’s a huge chunk of your budget! And yet, many businesses just accept it as part of doing business—focusing on increasing sales instead of fixing inefficiencies. But here’s the thing: why push more sales through a system that’s not running smoothly?

GIC Tax Deduction Is Ending – Time to Rethink Your ATO Debt Strategy

By Liz Gibbs • May 14, 2025

From 1 July 2025, the General Interest Charge (GIC) on unpaid ATO debts will no longer be tax-deductible. That means holding onto tax debt could cost you more than you think, especially if you’re counting on the deduction to ease the burden.

Truck driver entitled to claim meal expenses

By Liz Gibbs • May 13, 2025

In a recent decision, the Administrative Review Tribunal ('ART') upheld a truck driver's claim for meal expenses, notwithstanding that those expenses had not been fully substantiated.

Increase to rate for working from home running expenses from 1 July 2024

By Liz Gibbs • May 12, 2025

The ATO has updated its guidelines for claiming work-from-home expenses, making things a bit simpler for many people.

How to Avoid Common CGT Mistakes

By Liz Gibbs • May 11, 2025

Just because you have a clearance certificate, it doesn’t mean you’re off the hook for other CGT (Capital Gains Tax) obligations.

Friendly Reminder: Minimum Pension Drawdown

By Liz Gibbs • May 9, 2025

If you’re receiving an account-based pension from your SMSF, there’s a minimum amount you need to withdraw each year. This amount is worked out using a percentage based on your age and your pension account balance as at 1 July 2024-or on a pro-rata basis if you started your pension partway through the 2025 financial year.

Tiny Habits, Big Wins: How Small Changes Can Make a Huge Difference

By Liz Gibbs • May 8, 2025

Let’s chat about micro habits—those small, super-manageable actions that can actually lead to some pretty big improvements in how we manage our time and priorities. If you’ve ever left a workshop full of great ideas only to forget them a week later, you’re not alone. That’s where micro habits come in. They’re easy to stick with and surprisingly powerful.