Originally published by Anthony Keane of The Australian.
05.06.2026
If you are in your early 40s, you are not imagining it – you really are paying more tax than anyone else in the country.
New analysis has pinpointed 43 as the peak tax age in Australia, with the average person at that age handing over $59,000 a year across income, consumption and other levies. That is more than four times what a 20-year-old pays, and well above what retirees contribute. It highlights the tax burden for the 40-year-old cohort, which is also being hit hard by the federal government changes that crimp wealth-building in shares and housing.
The analysis, commissioned by the Actuaries Institute, examined government taxation of income, housing, superannuation, consumption, payrolls and other areas, and found the highest-paying age is 43, closely followed by 44 and 42.
The annual per capita total tax bill of a 43-year-old is $59,000, while a 20-year-old’s total tax paid is $13,500, and for a 30-year-old it is $37,000. A 50-year-old pays $57,000, a 60-year-old $48,500 and a 70-year-old $27,500.
People in their 40s typically earn higher wages so their income and the 15 per cent tax collected on their superannuation contributions typically are bigger, while raising families means higher household spending and consumption tax (GST).
The analysis, by actuarial consulting firm Taylor Fry using data from Australian National University’s Tax and Transfer Policy Institute, also found that people under 25 and over 65 were net beneficiaries of government spending, while those in their middle ages paid much more in tax than they received in benefits.
Tax and finance experts say people in their 20s, 30s and 40s are the age groups most affected by Labor’s budget changes that ban negative gearing on established investment properties, introduce a minimum capital gains tax of 30 per cent and switch to an inflation-based indexation system for CGT from July 2027.
In the face of surging home prices, many young buyers turned to direct shares, exchange-traded funds and other investments to try to build wealth and deposits for homes. But because the budget’s CGT changes apply to all asset classes, they will be hit with higher taxes when assets are sold for profit in the future. Older, wealthier people are not as affected because their existing investments have largely been grandfathered by Labor’s rule changes.
Taylor Fry principal Hugh Miller says superannuation and housing taxes are centred more on people of working ages.
“Superannuation is taxed more in the accumulation stage, and housing, because people move around more before they retire and stamp duty tends to collect a little more at those middle ages,”
Fry says. “You’ve got net beneficiaries at the young and old extremes because they tend to get more government services and transfers than they pay in tax, and that’s effectively then funded by the middle ages where you’ve got more taxation.
“We are quite reliant in Australia on personal income taxes … other countries that are more reliant on higher rates of GST and consumption taxes get a little bit more of a spread.”
OECD research has found that income tax rates for Australian workers earning the average wage are among the highest of its 38 member countries, behind only Denmark, Iceland and Belgium.
Seniors pay much less total tax because their employment income drops dramatically and disappears at retirement, and superannuation becomes tax-free for retired people over 60.
MBA Financial Strategists director Darren James says the 40s are a time of high taxes amid high employment income, spending on families and rising asset values. “You are in that peak stage where everything is culminating,”
James says.
James says the proposed minimum CGT rate of 30 per cent will lead to more people in their 40s and 50s paying more tax.
“You don’t get any tax-free threshold, so if you were a couple with a spouse on a lower income because they were looking after kids, if you sold a joint investment property you might have got the $20,000 tax-free threshold for her or him on the lower income, but under the new rules it a flat minimum 30 per cent tax rate,” he says.
Meanwhile, superannuation’s rules were not changed, enhancing it as an investment structure that benefits older and wealthier people the most.
James says “there hasn’t been a lot of positives” in feedback from clients since the budget.
“Everyone’s scratching their head going ‘we cannot see how this helps new homeowners’,” he says. “Specifically for shares, it just doesn’t make any sense as to how changing the capital gains tax rules on shares has any influence on how new homeowners can get into housing.
“It actually makes it worse because a lot of new homeowners were using shares to build their wealth because they couldn’t afford to buy a house, and now they’re going to be penalised with a change in tax rules as a result.”
Meanwhile, older people with existing share and property investments keep the existing, more generous 50 per cent CGT discount system for all capital gains before July 2027.
Miller, who presented the tax analysis at the 2026 All Actuaries Summit, says older people were increasingly working, highlighting that, since 2008, employment rates had jumped 11 per cent for people over 60 and 18 per cent for over-65s.
There was an open question “as to whether that’s by force – people can’t afford to retire – or by choice, where people find meaning in work and don’t want to retire”, he says. “Presumably the true answer is a little bit of both.”
