Australian Tax-Free Threshold vs Inflation and Earnings

Finance Charts · Tax

The resident statutory zero-rate threshold in nominal and 2025–26 dollars, compared with full-time-adult average ordinary-time earnings where a complete earnings benchmark is available.

Frequency: financial_yearPeriod: 2000-01–2025-26Real-value base: 2025-26Updated:

Interactive chart

Threshold and AWOTE benchmark restated in 2025–26 dollars.

Visible series

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Australian Tax-Free Threshold vs Inflation and EarningsThe resident statutory zero-rate threshold in nominal and 2025–26 dollars, compared with full-time-adult average ordinary-time earnings where a complete earnings benchmark is available. Use the view and series controls before the chart to explore the data. Focus this chart and use the Left and Right Arrow keys to hear exact visible values. The complete data is also available in the table below.$117.7k$88.2k$58.8k$29.4k$02025–26 AUD per year2000-012004-052007-082011-122014-152018-192021-222025-26

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Showing Inflation adjusted with 2 available series.

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Key findings

  • The statutory zero-rate threshold is $18,200 in 2025-26.
  • Its CPI-adjusted value changed by 53.4% from 2000-01 to 2025-26.
  • In the latest complete earnings comparison, 2024-25, the threshold was 17.6% of annualised AWOTE.
  • The annualised AWOTE benchmark was $103,631 in 2024-25.

How the series interact

This comparison describes measured relationships and timing; it does not treat co-movement as proof of causation.

  • The latest complete wage-relative observation is 17.6% in 2024-25; the 2025-26 ratio is deliberately omitted because both half-year earnings observations are not available.

Data table

Australian Tax-Free Threshold vs Inflation and Earnings data
Financial yearThreshold (nominal AUD)Threshold (2025–26 AUD)Annualised AWOTE (nominal AUD)Annualised AWOTE (2025–26 AUD)Threshold / AWOTEComplete earnings benchmark
2000-01$6,000$11,862.02$42,039.4$83,112.0514.27%Yes
2001-02$6,000$11,531.39$44,270.2$85,082.8413.55%Yes
2002-03$6,000$11,186.6$46,667.4$87,008.2612.86%Yes
2003-04$6,000$10,928.91$48,570.6$88,470.6212.35%Yes
2004-05$6,000$10,671.07$50,928.8$90,577.4511.78%Yes
2005-06$6,000$10,337.98$52,977.6$91,280.2411.33%Yes
2006-07$6,000$10,045$55,143.4$92,319.2110.88%Yes
2007-08$6,000$9,714.54$57,673.2$93,378.0810.4%Yes
2008-09$6,000$9,421.94$60,990.8$95,775.39.84%Yes
2009-10$6,000$9,207.25$64,399.4$98,823.529.32%Yes
2010-11$6,000$8,929.83$67,077.4$99,831.658.94%Yes
2011-12$6,000$8,727$69,661.8$101,323.068.61%Yes
2012-13$18,200$25,889.43$73,239.4$104,182.7624.85%Yes
2013-14$18,200$25,202.69$75,168.6$104,090.724.21%Yes
2014-15$18,200$24,781.44$76,962.6$104,793.6223.65%Yes
2015-16$18,200$24,446.15$78,429$105,345.4623.21%Yes
2016-17$18,200$24,034.68$79,991.6$105,635.8722.75%Yes
2017-18$18,200$23,576.21$82,027.4$106,257.9922.19%Yes
2018-19$18,200$23,198.4$84,247.8$107,385.3821.6%Yes
2019-20$18,200$22,888.64$87,679.8$110,267.6720.76%Yes
2020-21$18,200$22,529.62$89,666.2$110,996.9820.3%Yes
2021-22$18,200$21,563.14$91,473.2$108,376.3219.9%Yes
2022-23$18,200$20,147.65$94,790.8$104,934.7119.2%Yes
2023-24$18,200$19,337.59$99,117.2$105,312.5118.36%Yes
2024-25$18,200$18,877.43$103,630.8$107,488.0917.56%Yes
2025-26$18,200$18,200No

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What this chart shows

The chart compares the resident statutory tax-free threshold with inflation-adjusted values and a full-time-adult earnings benchmark where complete earnings data is available. It is intended as general educational information, not financial or tax advice.

The threshold is the upper boundary of the Australian Taxation Office resident statutory zero-rate band, before considering Medicare levy, offsets, rebates, surcharges or other features. Inflation adjustment uses Australian Bureau of Statistics CPI financial-year averages. The earnings benchmark uses Australian Bureau of Statistics full-time adult average weekly ordinary time earnings, with earnings comparisons omitted unless the required half-year observations are complete.

Methodology and formulas

  • The tax-free threshold is the upper boundary of the ATO's statutory zero-rate band, not an estimate of effective net tax after offsets.
  • The annual earnings benchmark is 52 times the mean of original AWOTE for November in the preceding calendar year and May in the ending calendar year.
  • A financial year is omitted from earnings comparisons unless both half-year observations exist.

Read the shared Finance Charts data and publication methodology.

Sources and attribution

Limitations

  • AWOTE covers full-time adults and is not average taxable income or household income.
  • AWOTE changes can reflect workforce composition as well as wages.
  • CPI indexing and wage indexing answer different questions: purchasing power versus position relative to earnings.
  • The statutory zero-rate threshold is not necessarily the income at which every taxpayer first pays net tax.
  • CPI measures price change for a representative basket and is not a household-specific cost-of-living index.
  • The index reference period is September 2025 = 100; index re-referencing does not change inflation rates.
  • AWOTE is an earnings benchmark for full-time adults, not average household income or average taxable income.
  • Changes can reflect workforce composition as well as wage changes.
  • Rates exclude the Medicare levy, tax offsets, rebates, surcharges and temporary levies.
  • A statutory zero-rate threshold is not necessarily the income at which every taxpayer first pays net tax.

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General information only. This chart is educational and does not provide personal financial, tax or legal advice. Check current rules with the official publisher or a qualified adviser before making a decision.

Calculations and factual observations are produced by deterministic code. Explanatory wording may be AI-assisted; numeric claims must pass metric-reference validation before publication.

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