Is Australia or the US a lower-tax country?

Federal-only, the US is lower at most working incomes — its standard deduction ($16,100 single, 2026) and 10%/12% lower brackets beat AU Stage 3 below ~$200k. At 100,000.00 gross, AU take-home is 77,212.00 (effective 22.8%) vs US federal-only 79,180.00 (effective 20.8%). But US state income tax adds 0–13.3% on top (CA 13.3%, NY 10.9%, NJ 10.75%); states with no income tax (TX, FL, NV, WA, TN, NH, SD, WY, AK) leave the US ahead of AU at most incomes.

How does Australian Super compare to a US 401(k)?

Australia's Superannuation Guarantee is 12% of ordinary time earnings, mandatory, paid by the employer on top of base salary (legislated maximum from 1 July 2025). The US 401(k) is voluntary — employer match varies (typical 50% on first 6% = 3% effective, ranges from 0% to 10%+). 401(k) employee contributions reduce taxable income up to $23,500 (2026 estimated, indexed); AU concessional Super contributions are also pre-tax up to $30,000/year cap. AU Super preservation age is 60; US 401(k) penalty-free withdrawal is age 59½.

If I move from Australia to the US, what happens to my tax residency?

AU residency typically ends on departure (subject to Commissioner's tests). US residency triggers under the Substantial Presence Test (31+ days current year, 183+ weighted across 3 years) or via green card. The Australia-US double tax treaty prevents most double taxation. Watch out for the US 'worldwide income' rule and FBAR/FATCA reporting on AU bank accounts and Super (Super may not qualify as a treaty-protected pension, so growth can be taxed annually as PFIC).

What about Australian Super if I move to the US?

Super stays preserved in AU until preservation age — there is no transfer to a US 401(k) or IRA. The big US tax issue is whether Super qualifies as a 'foreign pension' under treaty protection (deferred until withdrawal) or is treated as a Foreign Grantor Trust / PFIC (taxed on annual growth). The IRS position is unsettled; conservative practice for SMSFs and many APRA funds is annual reporting on Form 3520/3520-A or PFIC Form 8621. Get specialist US-AU tax advice before any cross-border move.

Is GST/sales tax different between Australia and the US?

Yes — Australia's GST is 10% federally, applied broadly with exemptions for fresh food, most health, and education. The US has no federal sales tax; states + cities levy combined sales taxes ranging from 0% (DE, MT, NH, OR) to ~10% (Chicago 10.25%, parts of CA 10.75%). On groceries, many states exempt food. Effective consumption-tax burden varies wildly by state and spending pattern.

Australia vs US Tax — Side-by-Side Comparison for 2025-26 / 2026

Australia and the US run very different tax systems: AU has a flatter Stage 3 PAYE structure with mandatory employer Super, while the US layers federal + state + FICA with voluntary 401(k) matching. This page compares income tax, social levies, retirement schemes, and consumption tax using ATO 2025-26 figures and IRS 2026 federal figures (single filer, standard deduction). State tax is noted but not added — the US-only state-level layer can swing the verdict by 5–13%.

Take-home pay on the same nominal salary

Same numeric amount taxed as both an AUD salary (ATO) and a USD salary (IRS federal-only, single filer). Currencies aren't directly comparable — this is a structural tax comparison. State income tax (0–13.3% in the US) is excluded; pencil it in separately for any move into a high-tax state.

Gross salary	AU income tax	AU Medicare (2%)	AU take-home	US federal	US FICA (7.65%)	US take-home	Gap
50,000.00	5,788.00	1,000.00	43,212.00	3,820.00	3,825.00	42,355.00	+857.00
100,000.00	20,788.00	2,000.00	77,212.00	13,170.00	7,650.00	79,180.00	-1,968.00
150,000.00	36,838.00	3,000.00	110,162.00	24,734.00	11,475.00	113,791.00	-3,629.00
250,000.00	78,638.00	5,000.00	166,362.00	51,304.00	15,458.20	183,237.80	-16,875.80

Gap shows AU take-home minus US take-home on the same nominal gross. Excludes US state income tax (0–13.3%), AU MLS (1%–1.5% above $101k single without PHI), and retirement contributions. Add ~$5k–$13k for state tax in CA/NY/NJ at $100k income.

Income tax brackets — side by side

🇦🇺 Australia (FY 2025-26)

$0 – $18,200: 0%
$18,201 – $45,000: 16%
$45,001 – $135,000: 30%
$135,001 – $190,000: 37%
$190,001+: 45%

Stage 3 brackets in force from 1 July 2024. $18,200 tax-free threshold. 2% Medicare levy on top. Stage 3+ phase 2 drops 16%→15% on 1 July 2026.

🇺🇸 United States (2026, single filer)

$0 – $16,100: 0% (standard deduction)
+$12,400: 10%
+$38,000: 12%
+$55,300: 22%
+$96,075: 24%
+$54,450: 32%
+$384,375: 35%
$640,600+: 37%

2026 IRS brackets per Rev. Proc. 2025-32 (single). Standard deduction $16,100 (post-OBBBA). Plus FICA 7.65% (6.2% SS to $183,600 + 1.45% Medicare + 0.9% Additional above $200k). Plus state income tax 0–13.3%.

Key structural differences

Feature	🇦🇺 Australia	🇺🇸 United States
Tax-free / standard deduction	$18,200 tax-free threshold	$16,100 standard deduction (single, 2026)
Top federal marginal rate	45% over $190,000 (+ 2% Medicare = 47%)	37% over $640,600 (+0.9% Add'l Medicare = 37.9%)
State / local layer	No state income tax (states fund via GST share + payroll tax + property)	0–13.3% state + city; 9 no-tax states (TX, FL, NV, WA, etc.)
Social/health levy	Medicare levy 2% (+ MLS 1%–1.5% if no PHI above $101k)	FICA 7.65% (6.2% SS to $183,600 + 1.45% Medicare); 0.9% Add'l Medicare above $200k
Mandatory retirement	Superannuation Guarantee 12% (employer-paid, on top)	None; voluntary 401(k) — typical employer match 50% on first 6%
Tax year	1 July – 30 June (fiscal year)	1 January – 31 December (calendar year)
Filing deadline	31 October (self) / 15 May (agent)	15 April (auto-extension to 15 October on Form 4868)
Worldwide income	Residents taxed worldwide; foreign tax credits	Citizens AND residents taxed worldwide; FBAR/FATCA reporting
Capital gains	Marginal rate, 50% discount on assets held 12+ months	Long-term (1+ yr): 0% / 15% / 20% by income; short-term at marginal rate; +3.8% NIIT above $200k
Dividend taxation	Marginal rate, fully imputed via franking credits	Qualified dividends: 0% / 15% / 20%; ordinary at marginal
Estate / inheritance	No federal inheritance tax; Super death benefit 17% on non-dependants	Federal estate tax 40% above $15M (2026, post-OBBBA permanent); 11 states + DC have additional estate/inheritance tax
Property purchase	State stamp duty (e.g. NSW $700k → $26k)	No federal/state stamp duty; closing costs ~2–5%; property tax 0.3–2.5%/yr
Consumption tax	GST 10% (food/health/education exempt)	No federal sales tax; state + city 0–10.25% combined

Retirement: Super vs 401(k)

Australia's Super is mandatory; the US 401(k) is voluntary. A $100k AU salary triggers $12,000/year employer Super contribution paid on top — the employee gets the salary plus the Super accumulation. A $100k US salary triggers $0 mandatory employer retirement contribution; if the employer offers a typical 50% match on the first 6% of salary contributed, the employee must contribute $6,000/yr to capture the $3,000 match.

Tax treatment is similar but not identical. AU concessional Super contributions are taxed at 15% inside the fund (vs personal marginal rate); 2026-27 cap is $30,000/yr. US 401(k) employee deferrals reduce current taxable income; 2026 limit is $23,500 (estimated, indexed) plus $7,500 catch-up if age 50+. Roth versions exist on both sides (Roth 401(k); AU non-concessional contributions).

Cross-border traps. Super is not generally treaty-protected as a US 'pension' — many practitioners treat it as a Foreign Grantor Trust (Form 3520/3520-A) or PFIC (Form 8621), with annual taxation on growth and complex reporting. US 401(k)/IRA balances received in Australia are taxed at marginal rate on withdrawal (with foreign tax credit). Get specialist advice before either direction.

If you're moving Australia → US

Tax residency: AU residency typically ends on departure. US residency triggers via Substantial Presence Test (31+ days current + 183 weighted across 3 years) or green card receipt.
Worldwide income: The US taxes residents on worldwide income. AU rental, dividend, and Super growth become reportable. The US-AU treaty provides foreign tax credits but doesn't shield Super growth from PFIC/grantor-trust rules.
Super: Stays preserved in AU until preservation age. Annual US reporting (Form 3520/3520-A or 8621) is the conservative approach. Consult a US-AU CPA before assuming treaty protection.
FBAR / FATCA: Report any AU account exceeding US$10k aggregate via FinCEN Form 114 (FBAR). Form 8938 (FATCA) thresholds start at US$50k.
State tax planning: A move to TX/FL/NV/WA leaves you with US federal only — typically beats AU at $100k–$300k. CA/NY/NJ adds 9–13% on top.
Capital gains: Hold investments 1+ year to qualify for US long-term CGT rates (0/15/20%). Sell AU shares while still tax-resident in AU to lock in the 50% discount before US worldwide rules kick in.

If you're moving US → Australia

Tax residency: AU residency triggers via the 'reside' test (commonly 183+ days), domicile test, or 183-day test. US residency ends on departure (resident aliens) but US citizens remain taxed on worldwide income regardless of where they live.
US citizen trap: If you're a US citizen, you continue filing US returns from Australia. Use Foreign Earned Income Exclusion (~$130k 2026) + Foreign Tax Credit to avoid double taxation. Renouncing requires Form 8854 and may trigger expatriation tax.
401(k) / IRA: Stays in the US until withdrawal. Withdrawn balances are taxed in AU at marginal rate; foreign tax credit for any US withholding. Consider Roth conversions before AU residency starts (no tax on later withdrawal).
Mandatory Super: Your AU employer must contribute 12% of ordinary time earnings on top of salary — this is a significant retirement-savings advantage over voluntary 401(k).
Property: State stamp duty applies (typically 3–7% of purchase price). FHB concessions in NSW/VIC/QLD up to certain price caps.
Dividend franking: AU's franking credit system effectively eliminates double taxation on ASX dividends — a structural advantage over US qualified dividends taxed at 15/20%.

AU Income Tax Calculator

Stage 3 brackets, dual-year toggle 2025-26 / 2026-27.

AU Take-Home Pay

Net pay including Medicare, HELP, and Super contributions.

Superannuation Calculator

SG 12% projections + concessional cap optimization.

US Tax Tools (ustax.tools)

Sister site — federal income tax, FICA, 401(k), state-by-state, and more.

Sources

Australian figures: ATO individual income tax rates, FY 2025-26 (Stage 3). US figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments). FICA: SSA wage base 2026. Superannuation Guarantee 12% effective 1 July 2025 (ATO).