How Much Can You Earn if You Are Bankrupt?

If you are wondering whether there is a limit as to how much you can if you are bankrupt, you have come to the right place.

There is no limit as to how much a bankrupt can earn whilst in bankruptcy. That being said, one-half of a bankrupt’s net income (after tax and other deductions) above a certain threshold will be paid to the bankruptcy Trustee. This is known as payment of income contribution.

You can use our free Income Contribution Calculator to estimate the income contribution that you may be liable for in the event of bankruptcy.

Income Threshold

A bankruptcy Trustee will assess a bankrupt’s income each year. Apart from salary, wages and profits, income for the purposes of bankruptcy includes fringe benefits, superannuation annuities and family loans. If you are unsure what can constitute income, please give us a call and we will be able to assist you.

If you earn over the threshold each year, one-half of your net after tax income will have to be paid to your bankruptcy Trustee as income contributions. The relevant income threshold, known as the Actual Income Threshold Amount (AITA), is published by the Australian Financial Security Authority. The threshold, which is updated twice a year, can be found here.

The relevant threshold depends on the number of dependants a bankrupt has. The following are the threshold amounts as at the publication time of this article:



There are specific requirements to satisfy before an individual can be considered a dependant for income assessment purposes. The requirements are not the same as the requirements for tax purposes. Essentially, to be a dependant, the individual must be:

  • Living with the bankrupt;
  • Financially dependent on the bankrupt; and
  • Earning less than $3,708 (as at the publication of this article).

Example of Income Contributions Payable

Below is an example of how a bankruptcy Trustee assesses income for the purposes of determining income contributions. In this case, the bankrupt has a net after tax income of $85,000, has 1 dependant, and is paying $5,000 of child support.


A bankrupt in these circumstances would be able to pay the amount of $5,171.30 to his or her bankruptcy Trustee by weekly, fortnightly or monthly instalments.

Contact Us For Assistance

If you wish to discuss about this article or require further advice, please contact our Brisbane or Gold Coast office for a free, no-obligation consultation.


We’re happy to answer any questions you may have, so please don’t hesitate to call us and schedule a consultation.



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