Internationally, there is a gap in high‐school completion rates for Indigenous and non‐Indigenous students. In Australia, gap estimates are commonly based on lag indicators, precluding examination of underlying mechanisms. Using two longitudinal representative samples of Australian youth, we explored differences in high‐school completion between Australian Indigenous and non‐Indigenous rates, and whether the gap varies for students of similar academic ability. Using an intersectional approach, we show the Indigenous gap is significant, is mostly a function of differences in academic achievement, but varies by socioeconomic status (SES) and location. Specifically, high SES and living in urban settings are protective factors for non‐Indigenous students, but not for Indigenous students. Conversely, rural and poor non‐Indigenous students appeared to have dropout rates as large or even larger than similarly poor and rural Indigenous youth. Overall, the results suggest the need for a more nuanced perspective on ‘Indigenous gaps’ in educational attainment.