The interactive calculator asks readers to guess how their household income compared with the rest of Australia. About 80 per cent of users ranked their incomes somewhere in the middle three bands; less than half actually belonged here. Only 2 per cent of users correctly guessed their rank. Australians have long held a blinkered view of the extent of inequality in this country, said the executive director of The Australia Institute, Richard Denniss. "Australia is a lot more unequal than we like to admit, so in turn we suggest the very rich are really just average," he said.

"It makes us feel more comfortable with … the extent of inequality in Australia." More than one million Australians are living in poverty despite two decades of economic growth, according to a recent report from the Committee for Economic Development of Australia. Dennis said the reluctance of politicians to tackle inequality is at the heart of a national myth that insists the rich are poorer than they are.. If you knew the top 10 per cent of income earners received the lion's share of tax concessions and "you had no intention of doing anything about that, then ... you need to tell a story about how the top 10 per cent are doing it tough," he said.

The average estimated rank was 58, according to data from more than 90,000 unique users. The average actual rank was 67, which suggests Fairfax readers are better off than the average Australian. Many people are out of touch with how their income compares because they tend to assume their standard of living is "normal", said Mark Wooden, Director of the Household, Income and Labour Dynamics in Australia (HILDA) survey at the Melbourne Institute of Applied Economic and Social Research. "People compare themselves with the people around them – their peers. So if you live in a nice neighbourhood where people have professions, are well paid, drive 4WDs and send their kids to private school etc, you think that's normal … even though that whole suburb is in the upper 10 per cent of the income distribution." The financial stress of keeping up with the Joneses or maintaining a lavish lifestyle also makes high-income earners feel "middle class", he added. "You spend more money on the house. You live in a more expensive area. You have more expensive tastes … You put yourself under financial stress … [then] feel like you're not doing as well as others."