In Australia’s big cities, it’s not uncommon to meet families or professionals earning $200,000 or more who still feel under financial pressure. Enter the HENRYs: High Earners, Not Rich Yet. In 2025, this demographic is growing, but the gap between high incomes and real wealth has never felt wider. So, what’s holding HENRYs back from feeling flush? And what does it mean for their financial future?
Who Are Australia’s HENRYs?
HENRYs (High Earners, Not Rich Yet) are typically dual-income professionals, managers, or business owners earning above $150,000–$250,000 per household. They’re often in their late 20s to late 40s, living in urban hubs like Sydney or Melbourne. Despite incomes that outpace the national average (which is $98,218 as of early 2025), HENRYs don’t feel rich—and with good reason.
- High cost-of-living: Rents and mortgages have soared. CoreLogic data shows median Sydney house prices hovering near $1.5 million in 2025, pushing repayments far above $6,500/month for many.
- Tax pressure: The top marginal tax rate kicks in at $180,000, meaning a big chunk of each extra dollar goes to the ATO. The 2024–25 Stage 3 tax cuts have provided some relief, but bracket creep remains a reality.
- Lifestyle inflation: HENRYs often juggle childcare, private schooling, and travel, driving up monthly outgoings.
Why HENRYs Are Struggling to Build Wealth in 2025
Even with six-figure salaries, HENRYs face unique financial challenges:
- Stagnant Savings: ABS data shows average household savings rates have dipped below 3% in 2025—down from pandemic highs. For HENRYs, big incomes can be offset by bigger spending, leaving little for investments.
- Property Dilemmas: Many HENRYs feel trapped by property. First-home buyers face higher deposits and stamp duty, while upgraders grapple with rising interest rates (currently averaging 6.2% for variable loans).
- Superannuation Gaps: Despite mandatory super, many HENRYs aren’t making extra contributions. The cap for concessional contributions is $30,000 in 2025, but few max it out, missing a key wealth-building lever.
- Invisible Expenses: Private school fees, after-school activities, and lifestyle perks can quietly erode surplus cash. A 2025 McCrindle survey found over 40% of high-income households felt ‘financially stretched’.
Smart Strategies for HENRYs to Get Ahead
While the HENRY squeeze is real, it’s not permanent. Here are actionable ways high earners can break the cycle and start building genuine wealth:
- Automate Investments: Set up monthly transfers to ETFs or managed funds before lifestyle spending kicks in. Even $1,500/month, compounded at 7%, can build a $1 million portfolio in under 25 years.
- Maximise Super: Use salary sacrifice to reach the $30,000 concessional cap. This not only reduces taxable income but also boosts retirement savings.
- Tax-Effective Structures: Consider trusts or family companies for side hustles or investments. With the company tax rate at 25% for SMEs in 2025, this can be more efficient than personal top marginal rates.
- Review Fixed Costs: Regularly audit insurance, subscriptions, and recurring bills. Even high earners can save thousands by trimming non-essential expenses.
- Negotiate Salaries and Benefits: With a tight labour market and skills shortages in 2025, don’t leave money on the table—consider negotiating for bonuses, equity, or extra super.
Real-World Example: The Sydney HENRY Dilemma
Meet Jess and Mark: a Sydney couple earning $240,000 between them. Their combined mortgage, daycare, and private health premiums swallow $9,000/month. After tax and living costs, their annual savings are less than $20,000. By redirecting $12,000/year into super and automating $8,000 into low-fee ETFs, they could double their net worth over a decade—without radically changing their lifestyle.
The Outlook for HENRYs
Australia’s HENRYs are at a crossroads in 2025. Inflation, property prices, and tax policy will keep the pressure on. But by focusing on strategic savings, smart investments, and mindful spending, high earners can turn income into lasting wealth. The first step? A clear-eyed audit of where the money goes—and a commitment to making each dollar work harder.
