Tax rates
In Australia, a taxpayer's income is taxed progressively. Broadly, this means that as you earn more income your average tax rate rises.

Progressive taxation means that higher income earners pay more tax than lower income earners. This is achieved by taxing a range of income brackets as a set percentage or cents in the dollar. These income brackets are called tax brackets. The following tables detail the tax brackets of our progressive tax system for the financial years ending 30 June 2004 and 30 June 2005.

The rate of tax within these brackets is called the marginal rate of tax. For Australian residents, the first tax bracket, from $0 to $6,000, has a zero marginal rate of tax. Tax is applied to every dollar after this figure. This tax-free amount is called the tax-free threshold.

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