United States vs Australia: Tax Comparison

Compare income tax rates and take-home pay between United States and Australia

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On a $100,000 salary, you'd take home $73,812 in United States (California) versus $71,963 in Australia — a difference of $1,849/year ($154/month).

Tax Breakdown Comparison

United States

2025 tax year

Lower Tax

Take-Home Pay

$73,812

$6,151/mo

Effective Rate

26.2%

of gross

Gross$100,000
Income Tax -$13,449
California Tax -$3,989
Social Contributions -$8,750
Total -$26,188

Australia

2025-26 tax year

Take-Home Pay

$71,963

$5,997/mo

Effective Rate

28.0%

of gross

Gross$100,000
Income Tax -$24,537
Social Contributions -$2,000
Surcharges -$1,500
Total -$28,037

Effective Tax Rate by Income

Shows effective tax rate (total tax / gross income) at different income levels in USD

Life & Taxes

What it's like to live and earn in each country

Chasing Sun or Skyscrapers

From tech giants in California to the laid-back surf culture of the Gold Coast, professionals and families flock to these nations for the ultimate lifestyle upgrade. Whether you're a digital nomad seeking the Aussie 'fair go' or an ambitious climber targeting the American Dream, both countries offer a vibrant mix of innovation and leisure.

The Daily Vibe Check

Living in the States often means a fast-paced, high-reward environment where convenience is king and everything is bigger. Australia trades that intensity for a mandatory work-life balance, where the 'no worries' attitude is a way of life and the coffee culture is practically a religion.

Federal vs. State Showdown

The US system is a complex layer cake where Federal and State authorities both want a slice of your paycheck, especially in places like California. In contrast, Australia keeps it streamlined with a single national income tax, though their top-tier rates lean significantly heavier on high earners.

The Social Safety Net

In Australia, your Medicare Levy buys you peace of mind with a robust public healthcare system that covers the basics for everyone. The US approach is more 'choose your own adventure,' relying on private insurance and social contributions that vary wildly depending on your employer and location.

The Hidden Fine Print

Don't forget the quirks: Australia might penalize you with a surcharge if you skip private health insurance, while the US system is famous for its confusing maze of deductions and credits. Ultimately, the 'winner' depends on whether you value a collective safety net or the potential for higher take-home pay in a competitive market.

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United States vs Australia: Tax System Details

United States

Tax Year
2025
Currency
USD
Region Used
California
Key Assumptions
  • -Federal rates and brackets based on OBBBA 2025 updates for Single filers.
  • -California (CA) used as the representative subnational region.
  • -California state tax brackets and standard deduction are based on 2024/2025 inflation-adjusted estimates.
  • -Social Security (OASDI) wage base for 2025 is $176,100.
  • -California State Disability Insurance (SDI) 2025 rate of 1.1% included (contribution cap removed since 2024).
  • -Additional Medicare Tax (0.9%) is applied to wages exceeding $200,000 for single filers.
  • -Standard Deduction used for both Federal and State; itemized deductions (SALT, mortgage interest) excluded per worker profile.

Australia

Tax Year
2025-26
Currency
AUD
Key Assumptions
  • -Tax year used is 2025/26 (ending 30 June 2026).
  • -Medicare Levy Surcharge (MLS) is included as a surcharge and assumes the worker does not have private hospital health insurance.
  • -The 2% Medicare Levy is modeled as a social contribution at a flat rate, assuming income exceeds the low-income threshold.
  • -The Low Income Tax Offset (LITO) is simplified to a single linear phase-out starting at 37,500 AUD.
  • -Employer mandatory superannuation contributions (12%) are excluded per the workforce profile requirements.

Calculation Methodology

What's Included

  • Federal/national income tax
  • State, provincial, or local taxes
  • Social security contributions
  • Healthcare levies (where mandatory)
  • Additional surcharges

Assumptions

  • Single filer, no dependents
  • Employment income only
  • Standard deductions applied
  • Age 35 (where relevant)
  • No special tax credits