AustraliaI'm bankrupt and earning above the threshold. How much of my income must I contribute?
If you're bankrupt and earn above the income threshold, you must contribute half of the amount you earn over the threshold, after allowable deductions.
What the Law Says
The Bankruptcy Act sets out how much income a bankrupt person must contribute if their after-tax income exceeds the statutory threshold. The amount is calculated based on family circumstances and allowable deductions.
The Bankruptcy Act 1966 (Cth) requires bankrupt individuals who earn above the income threshold to pay contributions to their trustee. The threshold changes twice yearly and depends on how many dependants you have.
The contribution amount is calculated as 50% of your income that exceeds the threshold, after deducting allowable expenses such as child support, income tax, and certain superannuation contributions.
Your trustee assesses your income and issues an income contribution assessment. You must pay the assessed amount within 14 days unless you apply for a review or variation.
Statutory TextThe bankrupt must pay to the trustee an amount equal to one-half of the amount by which the bankrupt’s income exceeds the income threshold amount.
— Bankruptcy Act 1966 (Cth), s. 139P(1) — Income contributions
Statutory TextThe income threshold amount is the amount prescribed by the regulations having regard to the number of dependants of the bankrupt.
— Bankruptcy Act 1966 (Cth), s. 139P(2) — Income threshold amount
What to Do
Calculate your after-tax income and compare it to the current income threshold (check AFSA’s website for latest figures).
Deduct allowable expenses (e.g., child support, tax, compulsory super) to determine your ‘assessable income’.
Apply the 50% contribution rate to any amount over the threshold.
Pay the assessed contribution to your trustee within 14 days—or request a review in writing within 60 days.
Keep records of income, expenses, and payments; update your trustee if your income or circumstances change.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.