"Australia is one of the highest-taxed countries in the world" is one of those lines that gets repeated until it sounds like fact. So how does our income tax actually stack up against comparable countries? The honest answer is: our top rate is middling, but the income where it starts biting is low — and that combination is what people are really feeling.
Australia's top rate: 45%, plus the Medicare levy
An Australian resident pays a top marginal income tax rate of 45% on every dollar of taxable income above $190,000, a threshold that was lifted from $180,000 as part of the Stage 3 changes that took effect on 1 July 2024. On top of that sits the 2% Medicare levy, so the true top marginal rate on high incomes is closer to 47%.
That 47% is the number to carry into any comparison. It's not the whole story of what anyone pays — that depends on deductions, offsets and the progressive brackets below — but it's the rate that applies to the next dollar earned by a high earner.
How the peers compare
Here are the top marginal rates in a spread of comparable economies, and the income at which each one starts. A few of these are federal-only headline rates that climb higher once state, provincial or municipal taxes are added — noted where that's the case.
| Country | Top marginal rate | Roughly where it starts |
|---|---|---|
| Australia | 45% (47% with Medicare levy) | A$190,000 |
| United Kingdom | 45% | £125,140 |
| New Zealand | 39% | NZ$180,000 |
| United States (federal) | 37% | US$640,600 (single); states can add more |
| Canada (federal) | 33% | Provinces push the combined top rate past 53% |
| Sweden | ~52% combined | State 20% band on higher incomes, plus ~32% municipal tax |
| Singapore | 24% | S$1,000,000 |
Read down that column and Australia's headline rate isn't an outlier. It's level with the UK, above New Zealand, well above the US federal rate and Singapore, and comfortably below the combined rates in Canada's higher-tax provinces and in Sweden.
The rate isn't the story — the threshold is
Where Australia stands out is not the 45% rate but how soon you reach it. Our top bracket starts at $190,000. That's a high salary, but it's a little over twice the earnings of a typical full-time worker — not a stratospheric income.
Contrast that with the United States, where the 37% federal rate doesn't apply until taxable income passes US$640,600 for a single filer, or Singapore, where the 24% top rate only touches income above S$1,000,000. In those systems the top rate is reserved for genuinely high incomes. In Australia, a senior professional, a specialist tradesperson working overtime, or a dual-role manager can find themselves paying the top marginal rate on part of their income.
New Zealand tells the same story from the other side: a 39% top rate that starts at NZ$180,000, with no compulsory health levy on wages and no broad capital gains tax — which is a large part of why the trans-Tasman comparison so often favours Wellington on paper.
Marginal rate vs what you actually pay
None of this means someone on $200,000 hands over 47% of their income. That's the classic confusion between the marginal rate — the rate on your next dollar — and the effective rate, the share of your whole income that goes to tax once the lower brackets and the tax-free threshold are counted. Because Australia's system is progressive, the effective rate is always well below the marginal rate.
The OECD's annual Taxing Wages work, which measures the actual tax and social-contribution burden on average earners across member countries, generally places Australia in the middle of the pack for a typical single worker — not near the top. The gap between the scary marginal number and the real effective burden is exactly why the "highest-taxed country" line rarely survives contact with the data.
The bottom line
Australia's top income tax rate of 45%, or 47% once the Medicare levy is added, sits mid-table among comparable economies — matched by the UK, beaten by Sweden and high-tax Canadian provinces, and higher than the US federal rate, New Zealand and Singapore. What sets Australia apart is that the top bracket arrives relatively early, at $190,000. So the country isn't uniquely high-taxed, but middle and upper-middle earners do hit the top rate sooner than their peers in several comparison countries. Rates and thresholds change with each budget, so the ranking is a snapshot, not a fixed order.