Income Tax rise surpasses wage growth as rates and inflation hit working Australians, says ATO data

The tax bills of many working Australians increased faster than their wages during the financial year 2022-23, data from the Australian Taxation Office released on Friday, June 27, 2025, revealed. Meanwhile, the data also showed that 91 Australians who earned more than $1 million in total income paid no tax in 2022-23.

The ATO released the data covering the 2022-23 financial year, the first full year of the government led by Prime Minister Anthony Albanese. On one hand, the working Australians saw a rise in their tax bills, while on the other, the very rich witnessed a drop in their incomes as the property prices, which saw an unusual high, returned to normal levels or declined.

The ATO data also revealed that the people were majorly impacted as their wages were consumed by both inflation and the tax system. Among the taxpayers who bore the brunt were women who suffered most from the end of the low- and middle-income tax offset.


The income tax offset was a benefit given to Australian taxpayers to reduce the total tax burden. This amount was directly deducted from the total taxable income. The amount of offset depended upon the taxable income. The offset, which was discontinued by the Albanese government after it came to power in 2022, was brought in by the Scott Morrison government as a temporary measure to offset the cost of living pressure after the Covid-19 outbreak.

The data also showed a decline in the number of landlords across Australia. However, those who had negatively geared properties increased in every state and territory, according to local media reports. Around 1,130,000 landlords who registered a loss were negatively geared. The median loss was $5,487, and the average was $9,346, ABC reported.

As far as the 91 non-income tax-paying millionaires are concerned, they claimed $390 million worth of different deductions to reduce their tax bills to zero, according to an analysis of the data by the Australia Institute and the ABC. The major portion of the deductions came from 19 millionaires who donated a total of $291 million to tax-deductible charities, averaging about $15.4 million each.

The ATO data for the financial year 2022-23 also revealed that the country’s highest earners live in Sydney's eastern suburbs, taking in Darling Point, Edgecliff, Rushcutters, and Point Piper.

During 2022-23, the average income of the working population across Australia was $74,240, which is an increase of $1913, or 2.6 percent, as compared to the 2021-22 financial year. Among the workers, the women's workforce managed to surpass men, with their average income growing by 3.3 percent, or $1992, to $62,046, compared to men, whose average lifted 2.2 percent to $86,199.

The big part of the rise in income, however, was taken away by higher taxes, partly due to the end of the low- and middle-income tax offset. After the offset benefit ended, the average net tax paid by all workers rose by 4.2 percent, or $946, to $23,562.

According to the Sydney Morning Herald, women, many of whom had fallen in the bracket of the low- and middle-income tax offset, suffered a 5.8 percent, or $1009, increase in their average net tax. As far as men are concerned, their average tax lifted by $1000, or 3.7 percent, to $28,206. Inflation, which was up by around 6 percent, added salt to the wounds.