Tax Programs

Tax Programs#

This document provides comprehensive coverage of Australian tax programs modeled in PolicyEngine Australia.

Personal Income Tax#

Tax Brackets and Rates (2024-25)#

Australia uses a progressive income tax system with the following brackets:

Taxable Income

Tax Rate

Description

\(0 - \)18,200

0%

Tax-free threshold

\(18,201 - \)45,000

19%

Low income bracket

\(45,001 - \)135,000

30%

Middle income bracket (Stage 3 cuts)

\(135,001 - \)190,000

37%

High income bracket

$190,001+

45%

Top marginal rate

Reference: ATO Individual Income Tax Rates

Implementation#

# parameters/gov/ato/income_tax/rates.yaml
rates:
  bracket_1: 0.0    # Tax-free threshold
  bracket_2: 0.19   # 19% rate
  bracket_3: 0.30   # 30% rate (Stage 3)
  bracket_4: 0.37   # 37% rate
  bracket_5: 0.45   # 45% rate

Medicare Levy#

Standard Levy#

  • Rate: 2% of taxable income

  • Purpose: Funds Australia’s public health system

Low Income Thresholds (2024-25)#

  • Singles: No levy below \(26,000; shade-in to \)32,500

  • Families: No levy below \(43,846; additional \)4,027 per child

  • Seniors/Pensioners: Higher thresholds at \(42,000/\)52,500

Medicare Levy Surcharge#

Additional levy for high-income earners without private health insurance:

Income (Singles)

Income (Families)

Surcharge Rate

< $97,000

< $194,000

0%

\(97,000 - \)113,000

\(194,000 - \)226,000

1.0%

\(113,001 - \)151,000

\(226,001 - \)302,000

1.25%

> $151,000

> $302,000

1.5%

Reference: Medicare Levy

HECS-HELP Student Loan Repayments#

Repayment Thresholds and Rates (2024-25)#

HECS-HELP uses an income-contingent repayment system:

Repayment Income

Repayment Rate

Below $54,435

0%

\(54,435 - \)62,850

1.0%

\(62,851 - \)66,620

2.0%

\(66,621 - \)70,618

2.5%

…

…

Above $159,663

10.0%

Features:

  • 18 income bands with progressive rates

  • Repayments calculated on “repayment income” (taxable income + reportable fringe benefits + other amounts)

  • Automatic withholding through PAYG system

Reference: Study and Training Loan Repayment

Superannuation#

Superannuation Guarantee#

  • Current Rate: 11.5% (2024-25)

  • Scheduled Increase: 12% from July 2025

  • Minimum Income: $450 per month threshold

Contribution Caps (2024-25)#

  • Concessional Cap: $30,000 per year

  • Non-concessional Cap: $120,000 per year

  • Contributions Tax: 15% on concessional contributions

Division 293 Tax#

  • Threshold: $250,000 combined income

  • Additional Tax: 15% (total 30%) on super contributions for high earners

Reference: Super Guarantee

Goods and Services Tax (GST)#

  • Standard Rate: 10%

  • Exemptions: Basic food, education, health, childcare

  • Input Tax Credits: Available for businesses

Note: GST modeling requires consumption data and is planned for future releases

State and Territory Taxes#

Payroll Tax#

Varies by state, typically:

  • Rate: 4.85% - 6.85%

  • Threshold: \(600,000 - \)2,000,000 annual payroll

Land Tax#

Progressive rates based on land value:

  • Exemptions for principal residence

  • Varies significantly by state

Stamp Duty#

Transfer duty on property purchases:

  • Progressive rates from 1.25% to 7%

  • First home buyer concessions available

Note: State taxes planned for implementation by jurisdiction

Implementation Status#

Currently Implemented#

✅ Personal income tax (all brackets and rates) ✅ Medicare levy and surcharge ✅ HECS-HELP repayments ✅ Superannuation guarantee contributions

Planned Implementation#

⏳ Capital gains tax ⏳ Fringe benefits tax ⏳ GST with consumption modeling ⏳ State and territory taxes ⏳ Local government rates

Testing#

All tax calculations are validated against:

  • ATO tax calculators

  • Published tax tables

  • Real-world scenarios

  • Edge cases and boundary conditions

See tests/policy/baseline/test_income_tax.yaml for comprehensive test cases.

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