Most ns don’t actually earn six-figure salaries, even though the official average full-time wage is now over $100,000.
In reality, full-time workers typically earn around $90,416, while the average income across all workers, including part-timers, is $67,786.
Grattan Institute economist Matthew Bowes said average salaries were in the six figures because a small minority of very high-income earners distorted the numbers.
‘When we look at an average, we’ve got a small number of higher-earning individuals who pull up that average so it doesn’t really reflect what a typical n is making,’ he told Daily Mail .
‘There’s a general bias in society to look at people who earn relatively high incomes and think they represent the broad part of the population.’
The top 0.8 per cent of ns typically have taxable incomes of at least $421,936.
This inflated the official average, full-time salary to $102,742 in the n Bureau of Statistics data.
But the Grattan Institute said 80 per cent of ns didn’t have taxable incomes in the six figures.
‘There are a lot of ns who earn, say, below $100,000 but who make up the majority of wage earners in society,’ Mr Bowes said.
Almost half of Aussie workers earn between $45,000 and $135,000, meaning they pay a 30 per cent tax rate in that bracket.
H&R Block tax expert Mark Chapman says that if you make $130,000 today, your tax bill will go up by $187.70 a year by 2027 – just from small, regular pay rises.
If your salary reaches $137,917 in two years, you’ll move into the higher 37 per cent tax bracket.
This is called ‘bracket creep’ – when pay goes up to track inflation, but tax thresholds stay the same, pushing more people into higher tax brackets without them actually earning much more in real terms.
He argued bracket creep was likely to keep catching more workers, as their pay went up as inflation continued to rise.
‘The phenomenon arises where static tax rates and thresholds gradually pull more people into higher tax brackets simply through the impact of rising wages and inflation,’ Mr Chapman said.
‘Many more people are expected to be dragged into a higher tax bracket over the next few years unless something is done to end bracket creep.’
H&R Block said tax brackets needed to be indexed for inflation every year to stop ns being caught out when their pay went up for doing the same job.
‘That way, even though I get a pay rise every year, the thresholds also go up so in theory I should never move into the higher tax bracket – unless I get a promotion with a big salary increment to recognise my increased responsibility,’ Mr Chapman said.
While $100,000 may be more than what a typical n earns, that kind of salary wouldn’t be enough for someone to buy a typical house in a major city on their own.
‘Certainly, if we’re talking about people who are trying to buy a house by themselves, we think about say, single parents, it’s a really tricky time to purchase a home,’ Mr Bowe said.
‘Increasing house prices that we’ve seen post-pandemic has only made that more tricky.’
A six-figure salary would only buy a $650,000 apartment with a 20 per cent mortgage deposit.
That is below ‘s national median house price of $880,590 and the $1.008million for capital cities, based on CoreLogic data.