ATO reveals top earners, rise in millionaires paying no tax

The Australian Taxation Office has revealed the highest-paid jobs across the nation, and the list might surprise you.

It’s surprising because despite chief executives and managing directors receiving huge pay rises after Covid-19, the 2021-22 data shows they’ve barely made the top 10 average taxable incomes.

They ranked ninth at an average $197,000 a year, well behind the nation’s medical experts; including surgeons ($460,000 annually), anaesthetists ($431,000 a year), psychiatrists ($276,000 annually) and “other medical practitioners” (earning $255,000 every year).

But there are far more CEOs in Australia than doctors – totalling 224,856 corporate leaders compared to just 4170 surgeons, 3535 anaesthetists and 3100 psychiatrists, the ATO said.

All of those Australians earn multiple times the average national income, that was just $72,327 – six times lower than surgeons and 2.7 times lower than an average chief executive.

More millionaires escape tax bills

The insights were published this week in a huge drop of tax information for the 2021-22 financial year that provided new insights into how the nation is paying tax – and crucially who isn’t paying.

More than 100 millionaires, for example, paid no tax in the 2021-22 year, that is a huge increase from the prior year where only 66 managed to avoid contributing to the public purse.

They got away with it by declaring more than $250 million in deductions, most of which was to tax-deductible charities, with such claims averaging more than $2 million.

Meanwhile, the income tax burden on average workers and wealthy people has continued to grow, with those earning between $45,000 and $120,000 in taxable income a year contributing 37.2 per cent, and those earning $180,000 or more contributing about 40 per cent to net tax.

Huge deductions

Australians are, however, becoming more savvy with their tax deductions, with millions taking advantage of generous work-from-home deductions during the COVID affected 2021-22 year.

The average tax deduction for work-related expenses was $2506, while the median amount (or the middle of the data set when ordered by value) was recorded at $1342, the ATO revealed.

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Deductions for superannuation contributions were also significant, totalling $17,648 on average (about 40 per cent of average income), while the median came in at $15,000 across 2021-22.

Superannuation balances

Those contributions are helping to boost super balances, which the ATO said have topped $200,000 at the median for men entering retirement (aged 65 to 69).

Women, however, are far worse off, with a median balance of just over $150,000 in the 60 to 65 age range and just under $200,000 in the 65 to 69 bracket; suggesting women are making large voluntary contributions just before they retire in a bid to boost their retirement nest eggs.

Younger Australians in the 30 to 34 age bracket have less than $40,000 in super savings at the median, which is a worrying sign given fears from experts that soaring house prices are going to make retirement much more expensive in the coming decades.

Top postcodes revealed

The ATO has also revealed the postcodes with the highest income earners paying tax.

Double Bay in NSW tops the list, with an average taxable income of $354,000 a year, followed by Peppermint Grove in Western Australia ($295,000 a year).

Darling Point in NSW ranked third ($269,000 a year), while Victoria’s wealthiest suburb Toorak was fourth, with average annual incomes clocking in about $266,000.


Topics: ATO
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