Tax in Australia: GST, income tax, company tax, capital gains
10%
A broad 10% tax on most goods and services sold in Australia. The rate is verified against Australian Taxation Office on 19 August 2026; the top personal income-tax rate is 45% (2026-27 tax year, Australian Taxation Office (ATO)), and the headline company tax rate is 30% (ATO).
GST in Australia
Value-added: businesses charge GST on sales and claim credits for GST on purchases, paying the net via a BAS.
- Standard rate
- 10%
- Local name
- GST — Goods and Services Tax
- Type
- GST
- Reduced rates
- None on record
- Registration threshold
- AUD 75,000 turnover/yr
- Filing
- Quarterly or monthly (BAS)
- Authority
- Australian Taxation Office
- Current rate since
- 1 January 2000
Introduced 1 July 2000
Introduced on 1 July 2000 by the Howard Coalition government at a flat 10%, the GST was the third attempt at an Australian consumption tax: Keating floated one at the 1985 Tax Summit (dropped after opposition) and Hewson built his 1991 "Fightback!" platform around it before losing the 1993 "unloseable election." Howard won the 1998 election calling it a "mandate for GST," and the revenue flows to the states.
What it replaced: The federal Wholesale Sales Tax (WST), a tax levied at the wholesaling point since 1930 that had grown into a tangle of rates ranging up to 32%; the GST also let the states scrap a range of inefficient taxes and duties.
Income tax in Australia
The top personal income-tax band is 45% for the 2026-27 tax year (shown as 45% + 2% Medicare in the rates table, which includes levies).
Company tax in Australia
The headline company tax rate is 30%, with 25% for qualifying smaller companies. In effect since 1 July 2021.
Base-rate entities (aggregated turnover under $50m, no more than 80% passive income) pay 25%; all other companies 30%.
Capital gains tax in Australia
- Shares
- The net capital gain is added to assessable income and taxed at the marginal income tax rates, after a 50% discount where the asset was held at least 12 months.
- Property
- The net capital gain is added to assessable income and taxed at the marginal income tax rates, after a 50% discount where the asset was held at least 12 months.
- Holding period
- At least 12 months, not counting the day of acquisition or of the CGT event, for the discount (resident individuals).
Did you know? Australia tax facts
A birthday cake helped sink a GST and an election: in 1993, Opposition Leader John Hewson couldn't say whether his proposed GST would make a birthday cake cheaper or dearer, fumbling about icing and candles on live TV.
The 3 March 1993 'birthday cake interview' with Mike Willesee on A Current Affair is widely blamed for Hewson losing the 'unloseable' federal election ten days later, on 13 March 1993; the GST didn't arrive until Howard finally legislated it seven years on.
Source: Wikipedia — Birthday cake interview ↗Australia's GST has been frozen at 10% for over 25 years, partly because changing the rate legally requires the unanimous agreement of every state and territory plus both houses of federal Parliament.
Treasury states plainly that 'legislation requires that changes to the GST base or rate require unanimous agreement by all State and Territory governments, as well as both houses of the Australian Parliament' — a political straitjacket flowing from the 1999 Intergovernmental Agreement that has kept the rate untouched since 1 July 2000.
Source: Australian Treasury — Tax White Paper, At a glance ↗Whether a frozen meal is taxed can hinge on a judge deciding what counts as a 'prepared meal' by common experience — and Simplot (maker of Birds Eye products) lost that argument in 2023.
In Simplot Australia v Commissioner of Taxation [2023] FCA 1115 the Federal Court ruled frozen vegetable-, rice- and pasta-based products were taxable 'prepared meals' or 'combination foods', applying 'common experience and common sense' about what an everyday meal is rather than the maker's own marketing.
Source: Grant Thornton — GST and food: Federal Court challenges the concept of a prepared meal ↗A tub of Chobani yoghurt became taxable purely because it came with a separate pouch of cookie and white-chocolate pieces — making it a 'combination food'.
In a 16 June 2023 ruling the Administrative Appeals Tribunal sided with the Tax Commissioner that Chobani's Flip Strawberry Shortcake yoghurt, sold with baked cookie and white-chocolate bits, was a taxable combination food rather than GST-free plain yoghurt.
Source: HWL Ebsworth — Case alert: Tribunal finds yoghurt combination not GST-free ↗Tampons were taxed at 10% as a non-essential item for nearly two decades while condoms, sunscreen and lubricant were GST-free — until the 'tampon tax' was finally scrapped in 2019.
After a campaign of nearly two decades, Commonwealth, state and territory treasurers unanimously agreed on 3 October 2018 to make menstrual products GST-free from 1 January 2019, giving up about $30 million a year in revenue.
Source: TIME — Australia Ditches Controversial 'Tampon Tax' After Outcry ↗Australia's first income tax was a state tax: South Australia levied one in 1884, the Commonwealth followed in 1915 to pay for the First World War, and in 1942 Canberra took over income tax from the states altogether.
Wikipedia records that 'the first income tax in Australia was imposed in 1884 by South Australia', that federal income tax 'was first introduced in 1915, as a wartime measure', and that in 1942 the federal government took over the raising of all income tax 'to the exclusion of the States' — an arrangement that still stands.
Source: Wikipedia — Income tax in Australia · checked 10 October 2026 ↗In 1951 Australia's top marginal income tax rate was 75%, charged on incomes above £10,000; from 1955 until the mid-1980s it sat at 67%.
Wikipedia's rate history: 'the top marginal tax rate for incomes above £10,000 (equivalent to $425,000 today) was 75 per cent' in 1951, and 'From 1955 until the mid-1980s the top marginal tax rate was 67 per cent'. The year-by-year tables then show 60% in 1983–86, 49% in 1987–88 and 47% from 1990–91.
Source: Wikipedia — Income tax in Australia · checked 10 October 2026 ↗The Medicare levy began at 1% of taxable income when Medicare launched in February 1984; it has since doubled to 2%, the last step taken on 1 July 2014.
Wikipedia: 'When Medicare was introduced by the Hawke Labor government in February 1984, it was accompanied by a Medicare levy to help fund it', set 'at 1% of personal taxable income', and 'From 1 July 2014 the Medicare levy rose from 1.5% to 2.0%'.
Source: Wikipedia — Income tax in Australia · checked 10 October 2026 ↗Australian companies pay a flat 30% on profits — unless they are a 'base rate entity' with annual turnover up to $50 million, which pays 25%. Two rates, nothing in between.
Wikipedia: 'company tax is calculated at a flat rate of 30% (25% for small businesses)', with base rate entities having 'an annual turnover of $50 million giving a tax rate of 25%'. Income taxes are described as 'the most significant form of taxation in Australia'.
Source: Wikipedia — Taxation in Australia · checked 10 October 2026 ↗Capital gains tax arrived in Australia on 20 September 1985 — and anything bought before that day is still exempt as a 'pre-CGT asset', four decades on.
Wikipedia: 'A capital gains tax (CGT) was introduced in Australia on 20 September 1985'; 'Any asset acquired before 20 September 1985, known as a pre-CGT asset' is outside the tax. The family home is 'the most significant' of the exemptions.
Source: Wikipedia — Capital gains tax in Australia · checked 10 October 2026 ↗Since September 1999 individuals who hold an asset for at least a year pay CGT on only half the gain — a 50% discount that replaced cost-base indexation. Companies get no discount; super funds get one-third.
Wikipedia: the Howard government ended indexation in September 1999 and 'introduced a 50% discount on the capital gain for individual taxpayers'; 'If an asset is held for at least 1 year then any gain is first discounted by 50% for individual taxpayers'; 'The 50% CGT discount is not available to companies'; superannuation funds 'are entitled only to a 33% CGT discount'.
Source: Wikipedia — Capital gains tax in Australia · checked 10 October 2026 ↗Compulsory super started in 1992 at just 3% of wages. The Superannuation Guarantee reached 9% in 2002 and finally hit 12% on 1 July 2025 — a 33-year climb.
Wikipedia: legislation for the Superannuation Guarantee was passed by the Keating Government in 1992 with employer contributions set at '3% of the employees' income'; the rate rose 'to 9% by 2002' and 'the SG from 1 July 2025 onwards has been 12%'.
Source: Wikipedia — Superannuation in Australia · checked 10 October 2026 ↗Australians had $4.43 trillion invested in superannuation as of March 2026 — a pool built on a compulsory system that began with a 3% contribution in 1992.
Wikipedia cites $4.43 trillion in superannuation assets as of March 2026, up from $4.2 trillion at December 2024. Anyone born after 30 June 1964 has a preservation age of 60.
Source: Wikipedia — Superannuation in Australia · checked 10 October 2026 ↗Super contributions are taxed at a concessional 15% inside the fund — but anyone earning over $250,000 pays an extra 15% under Division 293, taking the rate to 30%.
Wikipedia: concessional contributions are taxed by the fund at a 'contributions tax' rate of 15%, and 'Individuals earning over $250,000 pay 30%' — the Division 293 tax.
Source: Wikipedia — Superannuation in Australia · checked 10 October 2026 ↗University was free in Australia from 1974 to 1988: the Whitlam government abolished fees in 1974, and they returned in 1989 with HECS, the income-contingent loan repaid through the tax system.
Wikipedia records that the Whitlam government 'abolished university fees' in 1974 and that the Hawke government set up the Higher Education Contribution Scheme in 1989; HELP later 'replaced' HECS, and HELP debts are indexed to the 'Consumer Price Index (CPI) on 1 June each year'.
Source: Wikipedia — Tertiary education fees in Australia · checked 10 October 2026 ↗
More stories, for every country that has one, on the tax facts page.
Ask your AI assistant about tax in Australia
The figures on this page are callable by any MCP-compatible assistant through the free Tax MCP. Add https://taxmcp.ai2fin.com as a custom connector in Claude, ChatGPT, Cursor or your own agent — no login, no API key — then ask:
- “What is the GST rate in Australia, and what is the source?”
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- “What is the company tax rate in Australia and how is it sourced?”
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Australia, answered
Questions about tax in Australia
- What is the GST rate in Australia?
- The standard GST (Goods and Services Tax) rate in Australia is 10%, verified against Australian Taxation Office on 19 August 2026. Value-added: businesses charge GST on sales and claim credits for GST on purchases, paying the net via a BAS.
- What is the top income tax rate in Australia?
- The top personal income-tax band in Australia is 45% for the 2026-27 tax year, verified against Australian Taxation Office (ATO) on 20 August 2026. The free income-tax calculator on this site works through the bands below it, and shows the rate table it used.
- What is the company tax rate in Australia?
- The headline company tax rate in Australia is 30%, with 25% for qualifying smaller companies, verified against ATO on 6 October 2026. Base-rate entities (aggregated turnover under $50m, no more than 80% passive income) pay 25%; all other companies 30%.
- How is capital gains tax charged in Australia?
- In Australia, gains are added to income and taxed at the ordinary rates, verified against Australian Taxation Office on 6 October 2026. On shares: The net capital gain is added to assessable income and taxed at the marginal income tax rates, after a 50% discount where the asset was held at least 12 months. Holding period: At least 12 months, not counting the day of acquisition or of the CGT event, for the discount (resident individuals).
- Can an AI assistant look up tax rates for Australia?
- Yes. The free Tax MCP at https://taxmcp.ai2fin.com gives Claude, ChatGPT, Cursor or any MCP-compatible agent the same sourced figures as this page: the GST rate, an income-tax estimate, the company tax rate, the capital gains rule and a side-by-side comparison with other countries, each answer citing the authority and the date it was checked. Add the endpoint as a custom connector; there is no login or API key.
Sources
- Australian Taxation Office
- Australian Taxation Office (ATO)
- ATO
- Australian Taxation Office
- Wikipedia — Birthday cake interview
- Australian Treasury — Tax White Paper, At a glance
- Grant Thornton — GST and food: Federal Court challenges the concept of a prepared meal
- HWL Ebsworth — Case alert: Tribunal finds yoghurt combination not GST-free
- TIME — Australia Ditches Controversial 'Tampon Tax' After Outcry
- Wikipedia — Income tax in Australia
- Wikipedia — Taxation in Australia
- Wikipedia — Capital gains tax in Australia
- Wikipedia — Superannuation in Australia
- Wikipedia — Tertiary education fees in Australia
Last checked 10 October 2026. General information computed from published government rates, not tax advice. Check the linked authority or a registered adviser before relying on a figure.
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