Complete side-by-side comparison of Canadian and Australian tax systems including federal/provincial vs federal tax, CPP/EI vs Superannuation, Medicare Levy, and total tax burden analysis for those considering a move down under.
Key differences between Canada and Australia tax systems at a glance
| Category | <è<æ Canada | <æ<ú Australia |
|---|---|---|
| Federal Income Tax Range | 15% - 33% | 0% - 45% (includes Medicare Levy) |
| Provincial/State Taxes | 0% - 20.5% (varies by province) | 0% (no state income tax) |
| Social Security Contributions | 5.95% CPP + 1.66% EI = 7.61% | 2% Medicare Levy |
| Retirement Savings | 5.95% CPP (deducted from salary) | 11.5% Superannuation (employer pays, not you!) |
| Tax-Free Threshold | CAD$15,705 (Basic Personal Amount) | AU$18,200 (tax-free threshold) |
| Healthcare System | Universal (free at point of use) | Universal Medicare (funded by 2% levy) |
| GST/VAT Rate | 5% GST + 0-10% PST (varies) | 10% GST (federal) |
| Capital Gains Tax | 50% of gains taxed at marginal rate | 50% discount if held >12 months |
| Tax Filing Deadline | April 30 | October 31 |
Tax rates are remarkably similar between Canada and Australia:
" Lower incomes (CAD$40k / AU$45k): Canada ~28-35% total, Australia ~30-35% total
" Middle incomes (CAD$75k / AU$95k): Canada ~35-42% total, Australia ~35-40% total
" Higher incomes (CAD$120k / AU$150k): Canada ~42-48% total, Australia ~42-47% total
" HUGE DIFFERENCE: Australia's 11.5% Superannuation is paid BY YOUR EMPLOYER on top of your salary. Canada's 5.95% CPP is deducted FROM your paycheck.
" Result: Australians effectively get 11.5% more total compensation for retirement than Canadians
| <è<æ Canada Federal Tax Brackets 2025 | ||
|---|---|---|
| Income Range | Tax Rate | Notes |
| CAD$0 - CAD$55,867 | 15% | First bracket |
| CAD$55,868 - CAD$111,733 | 20.5% | - |
| CAD$111,734 - CAD$173,205 | 26% | - |
| CAD$173,206 - CAD$246,752 | 29% | - |
| CAD$246,753+ | 33% | Top federal rate |
| Plus provincial taxes: 0-20.5% depending on province | ||
| <æ<ú Australia Federal Tax Brackets 2024-25 | ||
|---|---|---|
| Income Range | Tax Rate | Notes |
| AU$0 - AU$18,200 | 0% | Tax-free threshold |
| AU$18,201 - AU$45,000 | 16% | Includes 2% Medicare Levy |
| AU$45,001 - AU$135,000 | 30% | + 2% Medicare = 32% total |
| AU$135,001 - AU$190,000 | 37% | + 2% Medicare = 39% total |
| AU$190,001+ | 45% | + 2% Medicare = 47% total (top rate) |
| No state/provincial income tax - one simple system! | ||
Canada - Ontario (CAD$75,000):
" Federal tax: ~CAD$11,325 (15.1%)
" Provincial tax (Ontario): ~CAD$4,330 (5.8%)
" CPP + EI: ~CAD$5,260 (7%)
" Total: CAD$20,915 (27.9%)
" Take-home: CAD$54,085 (72.1%)
Australia (AU$85,000):
" Income tax + Medicare: ~AU$19,717 (23.2%)
" Total: AU$19,717 (23.2%)
" Take-home: AU$65,283 (76.8%)
" PLUS: Employer contributes AU$9,775 (11.5%) to Super - you don't pay this!
Australia: 4.7% lower tax AND you get 11.5% Super on top = significantly better deal
| Aspect | <è<æ CPP (Canada Pension Plan) | <æ<ú Superannuation |
|---|---|---|
| Employee Contribution | 5.95% (deducted FROM your salary) | 0% (optional voluntary contributions) |
| Employer Contribution | 5.95% (matches employee) | 11.5% (on TOP of your salary) |
| Who Pays | You lose 5.95% of your paycheck | Employer pays 11.5%, you keep 100% of salary |
| Income Cap | CAD$68,500 (2025) | No cap |
| Annual Contribution (CAD$75k salary) | You pay: CAD$4,076 Total: CAD$8,152 |
You pay: $0 Employer pays: CAD$8,625 (~AU$9,775) |
| Investment Control | None (government-managed) | You choose super fund & investments |
| Access Age | Age 60-65 | Age 60 (preservation age) |
Canada (CAD$75,000 salary):
" Your gross: CAD$75,000
" You lose: CAD$4,076 (5.95%) to CPP from your paycheck
" Your actual salary: CAD$70,924 after CPP deduction
Australia (AU$85,000 salary = ~CAD$75,000):
" Your gross: AU$85,000 (CAD$75,000)
" You lose: AU$0 to Super
" You keep: Full AU$85,000 salary
" Employer ALSO contributes: AU$9,775 (~CAD$8,625) to your Super account
Over 40-year career:
" Canada: You contribute ~CAD$163k, total fund ~CAD$326k
" Australia: You contribute $0, employer contributes ~CAD$345k, total fund ~CAD$700k+
Australia's Super system means you retire with DOUBLE the retirement savings without losing any take-home pay
| Province/Note | Provincial Tax Rate | Combined Tax Burden |
|---|---|---|
| <è<æ Canada - Provincial Taxes | ||
| Alberta (Lowest) | 10% - 15% | ~25-40% combined |
| Ontario | 5.05% - 13.16% | ~28-42% combined |
| British Columbia | 5.06% - 20.5% | ~28-48% combined |
| Quebec (Highest) | 15% - 25.75% | ~35-55% combined |
| <æ<ú Australia - No State Tax | ||
| All States & Territories | 0% (no state income tax) | ~16-47% federal only |
" Canada: Must file federal + provincial returns (2 tax systems, complex)
" Australia: One tax return, one system, much simpler
" Moving within country: Canada = different provincial rates, Australia = no tax changes
" Example: CAD$100k in Quebec = 55% total tax burden vs AU$110k in Sydney = 42% - that's a 13% difference!
How much you actually keep at different income levels
| Scenario | <è<æ Canada Take-Home | <æ<ú Australia Take-Home | Winner |
|---|---|---|---|
| CAD$50k / AU$57k (AB vs AU) | ~CAD$38,200 (76%) | ~AU$47,500 (~CAD$42,000, 83%) | <æ<ú Australia (+10% more) |
| CAD$75k / AU$85k (ON vs AU) | ~CAD$54,085 (72%) | ~AU$65,283 (~CAD$57,700, 77%) | <æ<ú Australia (+6.7% more) |
| CAD$100k / AU$113k (ON vs AU) | ~CAD$69,400 (69%) | ~AU$79,183 (~CAD$70,000, 70%) | =ð Roughly equal |
| CAD$150k / AU$170k (ON vs AU) | ~CAD$98,500 (66%) | ~AU$106,800 (~CAD$94,400, 63%) | <è<æ Canada (+4% more) |
| CAD$150k / AU$170k (QC vs AU) | ~CAD$80,250 (54%) | ~AU$106,800 (~CAD$94,400, 63%) | <æ<ú Australia (+18% more!) |
Exchange rate: 1 CAD = 0.88 AUD. Both include healthcare/Medicare.
CAD$75k in Ontario:
" Take-home: CAD$54,085
" CPP contribution (from your salary): -CAD$4,076
" Effective take-home: CAD$54,085
AU$85k in Australia (~CAD$75k):
" Take-home: AU$65,283 (~CAD$57,700)
" Super contribution: AU$0 (employer pays AU$9,775 on top)
" Effective take-home: CAD$57,700
" PLUS: Employer contributes CAD$8,625 to your Super (vs CAD$4,076 you paid in Canada)
Australia wins: 6.7% higher take-home pay + 11.5% free Super contribution = 18.2% better total compensation
Compare Canada and Australia taxes with your specific income, province/territory, and personal situation
=° Try Free Tax Calculator| Factor | <è<æ Canada | <æ<ú Australia |
|---|---|---|
| Minimum Vacation Days | 10 days (2 weeks) + provincial holidays | 20 days (4 weeks) + 10-13 public holidays |
| Sick Leave | Varies by employer (often unpaid) | 10 days/year mandated (paid) |
| Parental Leave | 18 months at 33% or 12 months at 55% of salary | 18 weeks at minimum wage (~AU$850/week) |
| Minimum Wage | CAD$17.30/hour (federal, 2025) | AU$23.23/hour (~CAD$26.40) |
| Average Salary | ~CAD$65,000 | ~AU$95,000 (~CAD$83,900) |
| Climate | Cold winters (-20°C common) | Warm/hot year-round (10-30°C) |
| Cost of Living (Major Cities) | Toronto/Vancouver: High | Sydney/Melbourne: Very High |
| Healthcare Wait Times | Long for specialists (months) | Moderate (weeks for specialists) |
" Can't handle hot weather (Australia averages 25-35°C year-round)
" Have strong family/social ties that matter more than money
" Earn CAD$150k+ in low-tax province like Alberta (take-home advantage narrows)
" Prefer better parental leave (Canada's 18 months beats Australia's 18 weeks)
" Are established in career and don't want to start over
" Worried about distance from family (16+ hour flights, major time difference)
" Want significantly better retirement savings (11.5% Super paid BY employer vs 5.95% CPP you pay)
" Earn CAD$50k-120k (Australia offers 5-15% better take-home + Super)
" Hate Canadian winters and want warm weather year-round
" Want 4 weeks vacation instead of 2 weeks (double Canada's minimum)
" Value tax simplicity (one return vs federal + provincial)
" Want higher minimum wage (AU$23.23 = CAD$26.40 vs CAD$17.30)
" Are young (under 35) and can adapt to new country/culture
" Work in skilled trades, tech, healthcare (Australia needs these skills)
Australia is better for most income levels due to lower overall taxes AND 11.5% employer-paid Superannuation (vs 5.95% CPP you pay in Canada). At CAD$75k, Australia offers 6.7% more take-home pay PLUS AU$9,775 free Super contribution = 18% better total compensation.
Canada (Ontario): CAD$20,915 (27.9%) total = CAD$54,085 take-home
Australia (AU$85k equivalent): AU$19,717 (23.2%) = AU$65,283 (~CAD$57,700) take-home
Australia: 4.7% lower tax + 11.5% free Super = significantly better deal.
Canada: You pay 5.95% FROM your salary, employer matches 5.95%
Australia: Employer pays 11.5% ON TOP of your salary, you pay $0
This is Australia's huge advantage - you get retirement savings without losing take-home pay!
No! Australia abolished state income taxes. You only pay federal tax (one simple system). Canada has federal (15-33%) + provincial (0-25.75%), requiring two tax returns and making the system much more complex.
Yes, through skilled migration if you have in-demand skills (trades, tech, healthcare, engineering). Australia uses a points system favoring younger workers (under 45) with relevant qualifications. Working Holiday visa available for ages 18-35 (2 years).
Explore other tax comparisons to make informed decisions