What It Takes to Be in Australia's Top 1%

Earning $375,378 a year puts you in Australia's top 1% of taxpayers, while a household income of $531,652 means your family makes more than 99% of Australian households. However, with the median individual income sitting at $55,619, the financial gap between top earners and the rest remains significant.

Over the past five years, the income required to reach the top 1% has risen sharply. In 2019-20, individuals needed $315,770 and households $460,028 to make the cut - a 19%and 16% increase, respectively. These figures, drawn from Australian Taxation Office and Australian Bureau of Statistics data, provide insight into wealth distribution across the country.

Australia’s average full-time earnings stand at $104,765 a year, but this figure excludes part-time workers, making it less representative. Instead, the median full-time worker earns $90,416, which drops to $67,786 when factoring in part-time employees. This highlights the broader disparity between public perception and actual earnings.

Location also plays a role in income distribution. Western Australia has the highest percentage of taxpayers in the top bracket (earning over $190,000), followed by NSW and the ACT. However, even in high-income areas like Sydney, only 7% of residents fall into this category, revealing the relative exclusivity of top earners.

Beyond income, net wealth determines financial standing. Australians aged 25-40 need $3.1 million to be in the wealthiest 1%, while those aged 41-64 require $7.7 million. Over-65s hold the highest net wealth, with the top 1% controlling over $10.9 million each, reflecting the impact of accumulated assets over time.

Superannuation and home equity further shape financial standing. The top 1% of over-65s have super balances of $2 million individually and $3.3 million per household, as many shift investments into tax-effective retirement funds. Similarly, high home equity - $3 million for retirees, $2.8 million for middle-aged Australians, and $1.3 million for younger homeowners - demonstrates the long-term benefits of property ownership.

Overall, reaching Australia's top 1% depends not just on annual income but also on long-term wealth accumulation. While income thresholds remain consistent across age groups, net wealth requirements increase significantly for older Australians due to property gains and superannuation growth.

Source: Australian Financial Review, Morningstar, Your Investment Property Mag