What is a Good Salary in Australia? (2025 Income Guide)

Have you ever wondered how your income compares to other Australians? It's a natural question that helps us understand our financial position in the broader economic landscape.

This guide will take you through Australia's average and median incomes, what it takes to be in the top 1%, and what it means to be "middle class" in 2025.

Average vs. Median Income: What's the Real "Typical" Salary?

When you see news headlines about salaries, they often quote the average wage. According to the Australian Bureau of Statistics (ABS), the average weekly ordinary time earnings for a full-time adult was $1,923.40 in May 2024. This translates to an annual income of just over $100,000 before tax.

However, this "average" figure can be misleading. It's pulled upwards by the exceptionally high incomes of a few, like CEOs and top executives. A much better guide to a "typical" income is the median income. If you were to line up every worker in Australia by their earnings, the median is the person right in the middle—half earn more, and half earn less.

Here’s how the median income breaks down:

• Median Full-Time Income: As of May 2023, the median full-time income was $88,920 per year.
• Median Employee Income (including part-time): When you include part-time workers, the median drops to $67,600 per year.
• Median Personal Income (including all adults): Based on the 2021 census, which includes everyone from students to retirees, the national median personal income was just $41,860 per year.

The Bigger Picture: How Inflation and Housing Costs Affect Us

These income figures don't exist in a vacuum. For the past four years, real wage growth has been in negative territory. This means that although paychecks might be getting bigger, our purchasing power has actually shrunk by approximately 8% to 10%.

This is made worse by the fact that the official inflation figure (the CPI) doesn't fully capture the biggest cost for many Australians: housing. The CPI calculation does not include the price of existing dwellings or the cost of land.

Since March 2020, national housing values have risen by a staggering 38.3%, with cities like Adelaide, Brisbane, and Perth seeing growth of over 65%. When you pair shrinking real wages with surging housing costs, it's easy to understand why so many people are struggling. It's no surprise that a recent survey found the average Australian believes they need an annual income of $307,000 just to feel "rich."

The "Rich" List: What It Takes to Be in the Top 1%

So, how much do you actually need to earn to be in the country's top income brackets? Based on the latest comprehensive data from the ATO, here are the taxable income thresholds:

• Top 20%: You need a taxable income of over $100,000.
• Top 10%: You need a taxable income of over $120,000.
• Top 1%: You need a taxable income of over $350,000.

This highlights Australia's pyramid-shaped income distribution: a small group at the top earns very high incomes, while the majority earns average or lower incomes.

What is a "Middle Class" Income in Australia?

The term "middle class" isn't as clearly defined in Australia as it is in other countries, but we can use the OECD's definition for guidance. The OECD defines middle class as households earning between three-quarters and double the national median household income.

Based on the latest ABS data, the median equivalised disposable household income was $57,408 per year. Using the OECD's definition, this means a household earning between approximately $43,000 and $115,000 per year would be considered middle class in Australia.

It's important to note that these figures are after tax and Medicare and include any government benefits. This shows how much income is actually available for spending and saving.

A Look at Income Inequality

To better understand income distribution, the ABS divides all households into five equal groups, called quintiles. Before tax and government benefits, the gap is stark:

• The top 20% of households earn 12 times more than the bottom 20%.
• The top 20% earns 48% of all income, while the bottom 20% earns just 4%.

Government programs like income tax and social assistance are designed to make the final distribution of disposable income fairer.