Australian suburbs paying most and least tax to ATO revealed

New ATO data has revealed the country’s five most-taxed postcodes and what people are paying now. Search to see the list.

The typical Aussie pays about $11,300 to the tax man each year – but some suburbs average as much as three times that amount.

Newly released data from the Australian Taxation Office reveals the country’s five most-taxed postcodes in 2019-20 were all in Western Australia, led by mining regions.

Individuals in Pannawonica/Fortescue/Hamersley Range/Millstream – where the typical salary was almost $130,000 – paid a whopping $38,211 median net tax for the year.

But big tax bills did not always correlate with high salaries.

Residents of Portsea in Melbourne had a median salary of $49,896 yet paid a median of $26,709 in taxes.

Similarly, a typical taxpayer in St Lucia, Brisbane, earned $42,385 through employment but paid $15,767 in tax; while that of Dover Heights/Vaucluse/Rose Bay North/Watsons Bay in Sydney had a $61,880 salary and was taxed $22,416.

The earnings in some affluent areas may appear low, as a median value represents the middle value. Some households may also only have one breadwinner, meaning the second person is not claiming a full-time salary on tax.

H&R Block director of tax communications Mark Chapman said taxable income consisted of so much more than salary.

“For example, business profits, capital gains and investment income – e.g. dividends from shares, bank interest, rent from investment properties – are all included in taxable income,” he said.

Mr Chapman said people could also have a relatively low income but pay more tax than average if they were not able to claim many deductions in their job, or if they were unaware of the deductions available to them.

“In addition, they may not be able to claim losses arising from other forms of economic activity against their income – for example, if they don’t have a rental property, they will not be able to use rental losses against their wage or business income,” he said.

H&R Block’s Mark Chapman. Picture: Supplied

At the other end of the tax spectrum, Australia’s least-taxed postcodes included the small communities of 3921 (including French Island, off Victoria), where a typical resident paid $2150, and 5308 (including Copeville and Perponda in rural South Australia), with a median net tax of $3787.

Among the country’s more populated areas, Western Sydney’s Auburn and Auburn South were the clear frontrunners.

Almost 23,000 people lodged a tax return in the 2144 postcode and paid a median of just $5523 in tax.

Mr Chapman said the tax system was very complicated and it often paid to have an expert on hand who could advise on the range of deductions and tax offsets available.

“Getting it wrong can prove expensive,” he said.

“Taxpayers who don’t claim everything they are entitled to are losing out on a valuable tax refund but taxpayers who go the other way, and claim items they are not entitled to, are leaving themselves open to ATO audit and possibly penalties and interest.”