Overall, the cost of living in Australia is a little more expensive than in the UK. How do we know this? Well we’ve compared a number of factors in both countries and then factored in today’s exchange rates to do a lot of the homework for you.
Consumer prices, including rent, are roughly 30% higher in Australia than the UK, while grocery prices can be up to 40% higher. But this doesn’t paint the whole picture. According to the Expatistan Cost of Living Index, London is actually overall 9% more expensive than Sydney. That’s great news if your a Londoner since Sydney is the most expensive city in Australia, with prices nearly 10% more expensive than Melbourne and up to 15% more expensive than the Gold Coast.[1]
You can gain a better understanding of the cost of living in Australia, or your chosen city, by comparing everyday necessities like food, housing, leisure activities, eating out, transport, clothing and more.
Tax in Australia
Similarities and differences between UK and Australian tax
- Similar to the UK’s PAYE system, Australian employees benefit from Pay-As-You-Go (PAYG).[2]
- Australian tax rates and category bands are similar to the UK. Please see below.
- Australia’s tax year runs from 1st July to 30th June, rather than 6thApril to 5th April, but expats will need to stick with the UK tax dates when reporting on foreign incomes.
- VAT (Value-Added Tax) in Britain is currently set at 20%, but in Australia GST (Goods & Services Tax) is only 10%.
- Australians don’t pay national insurance, but do face a Medicare Levy. This recently went up from 1.5% to 2% of taxable income.
- In Australia, employers have to pay 9.5% of the employee’s income into a superannuation account, which is similar to pension contributions in the UK. This is given to every worker making over $450 per week.
Table comparing Australian and UK tax rates
| AUSTRALIA | UK | ||
|---|---|---|---|
| Taxable income | Tax Rate on this Income | Taxable income | Tax Rate on this Income |
| Up to $18,200 | 0% | Up to £11,500 | 0% |
| $18,201 – $37,000 | 19.0% | £11,501 – £45,000 | 20% |
| $37,001 – $80,000 | 32.5% | ||
| $80,001 – $180,000 | 37.0% | £45,001 – £150,000 | 40% |
| $180,001 and over | 45.0% | £150,000 and over | 45% |
Footnotes:
[1] https://www.expatistan.com/cost-of-living/comparison/london/sydney
[2] https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/