# How Much Is 6 Figures A Year, A Month, A Week & An Hour?

When I started working as a casual cleaner at the tender age of 12, I received a whopping \$2.00 per night. It would end up taking me several more decades before I could earn a salary that ended up eclipsing 6 figures.

But how much is 6 figures?

A 6-figure salary is where you are grossing, at a minimum, \$100,000 per year before tax. The amount of tax payable on a 6-figure salary in Australia, as an Australian resident for the 2021-22 financial year, is \$22,967 which doesn’t include the 2% Medicare levy.

## Don’t Forget Taxes

To calculate how much tax you will pay for a 6-figure salary as an Australian resident, simply navigate to the tax tables website and look for the following table:

To calculate the tax payable on your gross salary, first scale down the first column (labelled Taxable Income) to see which range of numbers your gross salary would fit.

Using the example of \$100,000 this income falls within the range of the third row labelled 45,001 – 120,000.

Once you’ve identified the row using the first column, you then follow the instructions provided in the corresponding section in the second column, which, with my running example of using \$100,000, states:

``\$5,092 plus 32.5 cents for each \$1 over \$45,000``

This instruction requires a couple of steps:

First, calculate how many dollars over \$45,000 your gross annual salary is: `\$100,000 - \$45,000 = \$55,000`

Second, with the figure obtained in your first calculation, multiply this by the cents taxed (32.5 cents converted to dollars is 0.325): `\$55,000 x \$0.325 = \$17,875`

Finally, with the amount calculated in your second step, add anything required (in my example this is \$5,092): `\$17,875 + \$5,092 = \$22,967`

This final amount is the amount of tax payable, if this represents your taxable income. You can reduce your taxable income by reducing it with any allowable deductions. Also, it should also go without saying that this tax payable excludes the Medicare levy, which provided you are not exempt from paying, would be an additional 2% on your taxable income, and is calculated as follows:

``````Medicare Levy = Taxable Income x 2%
Medicare Levy = 100,000 x 0.02
Medicare Levy = \$2,000``````

If you wanted to find out what your tax rate is on your 6-figure salary, you could divide this final tax payable amount by your taxable income to work out your effective tax rate:

``Your Tax Rate = (Your Tax Payable / Your Taxable Income) x 100``

Using my example of \$100,000 as the taxable income and the total tax payable of \$24,967 (which includes the Medicare Levy) this would mean my effective tax rate is 24.967%.

How much would you need to earn to net 6 figures after tax as an Australian resident?

If you wanted to net 6-figures after tax, this would mean as an Australian resident you would need to have a taxable income of \$139,454 as the total tax payable (including Medicare Levy) would be: \$39,454.

This means the effective tax rate of somebody netting 6 figures would be 28.3%.

## Monthly

How much is six figures per month?

If your taxable income for the 2021-22 financial year is \$100,000 per year, this would equate to a gross total per month of \$8,333.33, therefore if you’re earning anything above this monthly amount it means you are earning 6 figures per year.

If your annual taxable income is \$139,454 in the 2021-22 financial year, this would equate to a gross total per month of \$11,621.17 and would mean you are netting after tax 6 figures per year.

## Fortnightly (Bi-Weekly)

How much is six figures is you’re being paid fortnightly (bi-weekly)?

While some financial years may have 27 pays, I’ll perform the calculations below based on the standard 26 fortnight periods in a year.

## Weekly

How much is six figures per week?

Similar to the fortnightly issue above there can be some financial years when, if you’re being paid weekly, will mean receiving 53 pays, but I will based my calculations based on a standard 52 weeks in a year.

## Hourly

How much if six figures per hour?

The maximum hours for a full-time person as defined by the Fair Work Act 2009 in a working week is 38 hours. I will use 52.18 weeks in a year to further compress the annual amount to a weekly amount. If I use this as the basis of my calculations, here are the hourly rates:

## Summary

Earning six figures means you earn at a minimum \$100,000 per year before tax. To net 6 figures after tax would require a taxable income in the 2021-22 financial year as an Australian resident of \$139,454 (includes the Medicare levy charge of 2%).

Interestingly, the latest ABS data on household median income released back in December 2020 was \$1,844 per week, which would equate to an almost 6-figure income for the median household in Australia (\$95,888)!