Complete side-by-side comparison of United States and Australian tax systems including federal income tax, Social Security vs Medicare Levy & Superannuation, state taxes, and total tax burden analysis.
Key differences between USA and Australia tax systems at a glance
| Category | <ú<ø United States | <æ<ú Australia |
|---|---|---|
| Federal Income Tax Range | 10% - 37% | 0% - 45% (includes Medicare Levy) |
| Medicare/Healthcare Levy | 1.45% (+ 0.9% for high earners) | 2% Medicare Levy (flat rate) |
| Social Security/Super | 6.2% Social Security | 11.5% Superannuation (paid by employer) |
| State/No State Taxes | 0% - 13.3% (varies by state) | 0% (no state income tax) |
| Tax-Free Threshold | $14,600 (standard deduction) | AU$18,200 (tax-free threshold) |
| Capital Gains Tax | 0% - 20% (federal) + state | 50% discount if held >12 months, taxed at marginal rate |
| Healthcare System | Private (employer/individual paid) | Universal Medicare (tax-funded) |
| Sales Tax (GST) | 0% - 10% (varies by state) | 10% GST (federal) |
| Tax Filing Deadline | April 15 | October 31 |
The tax rates are surprisingly similar between USA and Australia:
" Lower incomes ($30k-50k): USA ~22-28% vs Australia ~25-30% total
" Middle incomes ($50k-100k): USA ~25-35% vs Australia ~30-37% total
" Higher incomes ($100k+): USA ~30-50% (depending on state) vs Australia ~38-47% total
" Key difference: Australia's 11.5% Superannuation is paid by EMPLOYER (not deducted from your salary), so you effectively get a "free" retirement contribution
" Australia includes: Universal Medicare, 4 weeks annual leave (mandated), 10 days sick leave, Long Service Leave
| <ú<ø USA Federal Tax Brackets (Single Filer) | ||
|---|---|---|
| Income Range | Tax Rate | Notes |
| $0 - $11,600 | 10% | Lowest bracket |
| $11,601 - $47,150 | 12% | - |
| $47,151 - $100,525 | 22% | - |
| $100,526 - $191,950 | 24% | - |
| $191,951 - $243,725 | 32% | - |
| $243,726 - $609,350 | 35% | - |
| $609,351+ | 37% | Top rate |
| <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) |
USA ($75,000):
" Federal tax: ~$10,294 (13.7%)
" FICA (Social Security + Medicare): $5,738 (7.65%)
" Total federal: $16,032 (21.4%)
" Plus state tax (0-13.3% depending on state)
" Healthcare insurance: $5,000-15,000/year (separate)
Australia (AU$115,000):
" Income tax + Medicare Levy: ~AU$30,667 (26.7%)
" Superannuation: AU$13,225 (11.5%) - PAID BY EMPLOYER, not you
" Your total: AU$30,667 (26.7% of your salary)
" Healthcare included via Medicare Levy
Australia's effective rate is ~5% higher, but includes Medicare and you get 11.5% Super contribution from employer
| Aspect | <ú<ø Social Security | <æ<ú Superannuation |
|---|---|---|
| Employee Contribution | 6.2% (mandatory, deducted from salary) | 0% (optional voluntary contributions) |
| Employer Contribution | 6.2% (on top of salary) | 11.5% (mandatory, on top of salary) |
| Who Pays | You pay 6.2% from your paycheck | Employer pays 11.5%, you keep your full salary |
| Income Cap | $168,600 (2026) | No cap |
| Access to Funds | Age 62-67 (depending on birth year) | Age 60 (preservation age) |
| Investment Control | None (government-managed) | You choose your super fund & investments |
| Typical Monthly Benefit | $1,907 average (2026) | Depends on your balance (average ~AU$250k at retirement) |
USA: You pay 6.2% Social Security from YOUR salary ($4,650/year on $75k income)
Australia: Employer pays 11.5% Superannuation ON TOP of your salary ($8,625/year on $75k income) - you don't lose ANY of your paycheck
Example on AU$100,000 salary:
" You receive: AU$100,000 in your pocket
" Employer also contributes: AU$11,500 to your Super account
" Total compensation: AU$111,500, but you only pay tax on AU$100,000
Over a 40-year career, this "free" 11.5% compounds to build substantial retirement savings (avg AU$250k-500k)
| State/Comparison | State Income Tax | Total Tax Burden |
|---|---|---|
| <ú<ø USA States (Examples) | ||
| Texas (No State Tax) | 0% | ~21-37% federal only |
| Florida (No State Tax) | 0% | ~21-37% federal only |
| California (High State Tax) | 1% - 13.3% | ~33-50% combined |
| New York | 4% - 10.9% | ~30-48% combined |
| <æ<ú Australia (All States) | ||
| New South Wales, Victoria, Queensland, etc. | 0% (no state income tax) | ~16-47% federal only |
Australia abolished state income taxes in 1942 and never brought them back. This simplifies the tax system significantly:
" USA: Must file federal + state returns (2 tax systems)
" Australia: One tax return, one system
" Moving within country: USA = tax implications, Australia = no tax changes
" Comparison: Living in Sydney (0% state tax) vs California (13.3% state tax) = 13% more take-home in Australia at high incomes
| Aspect | <ú<ø USA | <æ<ú Australia |
|---|---|---|
| Healthcare Tax | 1.45% Medicare (only for 65+) | 2% Medicare Levy (covers everyone) |
| Insurance Premiums | $400-800/month individual $1,200-2,000/month family |
$0 (included in levy) Optional private: $100-300/month |
| Deductibles | $1,000-8,000/year | $0 for public system |
| Co-Pays | $20-50 per visit | $0 for public, bulk-billed doctors |
| Hospital Costs | $10,000-50,000+ (after insurance) | $0 in public hospitals |
| Prescription Drugs | $10-500+ per medication | Max AU$31.60 per script (PBS scheme) |
| Annual Healthcare Cost | $6,000-35,000/year (incl. premiums + out-of-pocket) | $1,500-3,000/year (2% levy on $75k-150k income) |
USA Example ($75,000 income):
" Medicare tax: $1,088 (1.45%) - doesn't cover you until 65
" Health insurance premium: $7,200/year ($600/month average)
" Deductible + co-pays: $2,000/year
" Total: $10,288/year (13.7% of income)
Australia Example (AU$115,000 income):
" Medicare Levy: AU$2,300 (2%) - covers you completely
" Additional costs: $0 (public system)
" Total: AU$2,300/year (2% of income)
Australia's healthcare costs ~11% less of your income than USA, with better coverage
How much you actually keep at different income levels
| Scenario | <ú<ø USA Take-Home | <æ<ú Australia Take-Home | Winner |
|---|---|---|---|
| $50,000 / AU$77,000 (Texas) | ~$41,500 (83%) | ~AU$63,500 (82%) | =ð Tie (similar) |
| $75,000 / AU$115,000 (Florida) | ~$59,000 (79%) | ~AU$84,300 (73%) | <ú<ø USA (+6% more) |
| $100,000 / AU$154,000 (Texas) | ~$75,000 (75%) | ~AU$106,700 (69%) | <ú<ø USA (+6% more) |
| $100,000 / AU$154,000 (California) | ~$63,000 (63%) | ~AU$106,700 (69%) | <æ<ú Australia (+6% more!) |
| $150,000 / AU$231,000 (NY) | ~$95,000 (63%) | ~AU$145,000 (63%) | =ð Tie (similar) |
| $200,000+ (High earners) | ~58-65% take-home (state dependent) | ~53-60% take-home | <ú<ø USA (in no-tax states) |
Notes: (1) USA figures exclude $6k-25k/year healthcare costs. Australia includes Medicare. (2) Australia figures don't include 11.5% employer Super contribution you receive. (3) Exchange rate: 1 AUD = 0.65 USD
USA $100k in Texas:
" Take-home: $75,000
" Healthcare costs: -$10,000
" Employer retirement: +$6,200 (401k match, if available)
" Effective take-home: $71,200
Australia AU$154k:
" Take-home: AU$106,700 (~$69,355 USD)
" Healthcare costs: $0 (included)
" Employer Super: +AU$17,710 (~$11,511 USD)
" Effective take-home: $80,866 USD equivalent
When you include healthcare + Super, Australia offers 13% more total compensation at this income level
If you're an American living in Australia (or considering the move), you still need to file US taxes. The US is one of only two countries that taxes citizens on worldwide income, regardless of where they live.
Taxes for Expats (TFX) specializes in helping Americans abroad navigate complex tax situations including:
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Compare USA and Australia taxes with your specific income, state, and personal situation
=° Try Free Tax Calculator| Factor | <ú<ø USA | <æ<ú Australia |
|---|---|---|
| Minimum Vacation Days | 0 (not mandated) | 4 weeks (20 days) mandated |
| Sick Leave | 0 (varies by employer) | 10 days/year mandated |
| Parental Leave | 0 weeks paid (federal) | 18 weeks paid at minimum wage |
| Minimum Wage | $7.25/hour federal | AU$23.23/hour (~$15.10 USD) |
| Average Salary (2026) | ~$60,000 | ~AU$95,000 (~$61,750 USD) |
| Worker Protections | At-will employment (can be fired anytime) | Strong unfair dismissal laws |
| Long Service Leave | None | 2-3 months paid after 10 years (varies by state) |
| Public Holidays | 0 mandated federal | 10-13 days (varies by state) |
" Earn $150k+ and can live in a no-tax state (Texas, Florida, Nevada)
" Have excellent employer-provided healthcare
" Want to maximize short-term take-home pay
" Are in tech/finance with stock options and high compensation
" Don't mind less vacation time and weaker worker protections
" Prefer managing your own retirement contributions
" Value work-life balance (4 weeks vacation + 10 sick days + public holidays)
" Want universal healthcare without insurance stress or medical bankruptcy risk
" Like "free" retirement savings (11.5% Super paid by employer on top of salary)
" Earn $50k-120k (similar or better total compensation after benefits)
" Want stronger worker protections and job security
" Prefer living in a country with no state income tax (tax simplicity)
" Value quality of life metrics (Australia ranks #5 globally vs USA #20)
For middle incomes ($50k-100k), they're surprisingly similar (~5% difference). USA has slight edge in low-tax states. But Australia includes Medicare, 4 weeks vacation, and 11.5% employer Super contribution. When including total compensation, Australia often provides better value.
Slightly - about 3-7% higher at most income levels. But Australia has NO state income tax (USA has 0-13.3%), includes Medicare in the 2% levy (USA pays $5k-25k/year separately), and employer pays 11.5% Super on top of your salary.
USA (Texas): ~$25,000 (25%) taxes, take-home $75,000
Australia: ~AU$36,300 (31%) taxes, take-home AU$99,700 (~$64,805 USD)
However, USA must pay $10k healthcare separately, and Australia receives AU$11,500 (~$7,475 USD) employer Super contribution.
USA: You pay 6.2% from your salary for Social Security
Australia: Employer pays 11.5% Super ON TOP of your salary (you keep 100% of your paycheck)
This is Australia's massive advantage - you get retirement savings without losing any take-home pay.
Yes, through skilled migration (if you have in-demand skills), employer sponsorship (if company sponsors you), or business/investor visas. Australia uses a points-based system favoring younger workers (under 45) with in-demand skills in tech, healthcare, engineering, trades.
Explore other tax comparisons to make informed decisions