The latest release of the Household, Income and Labour Dynamics in Australia (HILDA) survey offers a detailed snapshot of Australian household incomes and living standards in 2024, highlighting the complexities in defining what constitutes a middle-income earner in the country. Conducted by the Melbourne Institute, this longitudinal study tracks approximately 17,000 individuals over time to capture evolving economic and social trends across Australia.

Key findings from the 2024 data reveal modest shifts in household composition, with a slight decline in the proportion of couples living with dependent or adult children, and a rise in couples without children from 20.4% to 22.1%. Childcare expenses have increased compared to 2002 levels, though these costs have stabilized over the past decade. The survey also notes that wage incomes have become more equitable, which has partially offset growing inequality in non-wage income sources such as investments.

A central focus of the report is the distinction between median and average household income, both crucial but different measures. The median income represents the midpoint of all household incomes, while the average, or mean, income is the total income divided by the number of households, typically yielding a higher figure. In 2024, the median household disposable income was recorded at $103,166 before adjustments for household size and composition.

However, this median figure can be misleading when evaluating living standards, as household needs vary widely. To address this, the HILDA survey uses an "equivalised" median disposable income measure, which adjusts for household size and composition to reflect the income a single individual would require to achieve median living standards in Australia. In 2024, this equivalised median disposable income was $66,311.

For further context, the survey indicates that the top 10% of earners, in terms of living standards, have an equivalised income of $122,675, while those in the bottom 10% earn $30,842 after tax. Because many Australians consider gross income figures, the survey estimates that a single person must earn approximately $83,969 pre-tax—accounting for a 2% Medicare levy—to reach median living standards. This contrasts with the Australian Bureau of Statistics’ figure for median total earnings (wages and salaries only), which was $78,567 in 2024.

Household income thresholds become more nuanced when considering family structures. Using standard equivalence scales where an additional adult requires 50% more income and each child adds 30%, a couple must earn 1.5 times the income of a single person to maintain similar living standards, while a couple with two children requires 2.1 times that income. Translating this into numbers, a couple’s household disposable income to achieve median living standards would be about $99,467, and $139,253 for a couple with two children.

Assuming a typical 60/40 income split between partners, the pre-tax household income needed for a family of two adults and two children to reach median living standards is estimated at $176,219. This figure is roughly $25,000 less than the amount required to reach average living standards, illustrating the distinction between median and average income measures.

The findings underscore the importance of clarifying household composition and income measurements when discussing middle-income earners, especially in political or policy contexts. Analysts and policymakers are reminded to specify whether income figures refer to individuals or families and whether they represent median or average standards, to provide a more accurate representation of economic wellbeing in Australia.