How to calculate
Enquiry:
I arrived in Australia on 1 June 2016 and worked as a banker. I was a resident for tax purpose and single. I took out private health insurance when arrived in Australia.
- During 2016/17, Earned amounts as following:
* $120,000 salary ($43,000 PAYG paid by her employer and remitted to the ATO)
* Fully franked dividends $11,000, franking credits $4,714, unfranked dividends $800
* $18,000 rent from an investment property
* Interest $750
* A net capital gain $170
My first question is, what’s my taxable income?
- During 2016/17, Deductible expenditure as following:
* Self-education expenses $3,800
* Gifts to deductible gift recipients $6,500
* Investment property repairs $700
* Bank fees $120
* Brokerage fees $600
* Work expenses $300
My second question is, what's my tax liability for 2016/17?
Calculation Process:
For you first question
- Taxable income = assessable income – deductions (ITAA97 s 4-15(1))
- Assessable income = $120,000+$11,000+$4,714+$800+$18,000+$750+$170 = $ 155,434
- Deductions = $3,550 +$6,500+$700+$120+$300 = $11,170
- [$3,550= $3,800 (self-education expenses)-$250 (due to ITAA36 s 82A)]
- Taxable income= $155,434-$11,170= $144,264
For your second question, using Tax rates (2016/17)
- Gross tax payable = $0 (tax on $18,200) + ($37,000-$18,200) *19% +($87,000-$37,000) *32.5%+($144,264-$87,000) *37% = $41,009.68
- * Tax offset $4,714 (franking credits)
New Gross tax payable = $41,009.68-$4,714 = $36,295.68
Medicare Levy = $144,264 taxable income *2% = $2885,28 (No Medicare levy surcharge because of private insurance)
Net Tax payable= $36,295.68 +$2,885.28= $39,180.96 < $43,000 (PAYG)
- So, you are entitled a tax refund= $43,000(PAYG) -$ 39,180.96= $3,819.04