Taxation in Australia: How does it affect you?
With five different income brackets, the Medicare levy and the low income offset, knowing how personal taxation in Australia affects you can be difficult to understand.
There are other rules that take many taxpayers by surprise. For example, you should know that the ATO classifies any interest you earn from savings or investment accounts as part of your income?
The amount of tax the ATO requires you to pay will vary depending on your annual taxable income. This means money earned from employment plus other forms of income such as interest.
Australian Tax Rates for 2013 (2012-2013 tax year)
At Etax Local we’ve summarised Australian Tax rates for the 2012-2013 tax season in the table below. Take a look to see which band you are likely to be classified under.
| Taxable Income | Tax on this income |
| $0-$18,200 | Nil |
| $18,201 - $37,000 | 19c for each $1 over $18,200
|
| $37,001-$80,000 | $3,572 plus 32.5c for each $1 over $37,000 |
| $80,001-$180,000 | $17,550 plus 37c for each $1 over $80,000 |
Over $180,001
| $54,547 plus 45c for each $1 over $180,000 |
Other factors that affect personal taxation
While the above tax rates give you a rough idea of the amount of tax you will pay each year, you should be aware that the Medicare Levy and the Low Income Tax Offset also affect your tax payable.
Medicare Levy
All Australians are required to pay the Medicare Levy. The ATO calculates your amount payable as 1.5% of your income up to $80,000. If you earn more than $80,000 and you don't have Private Health Insurance, you are usually required to pay a further 1% of your income on what is called the Medicare Levy Surcharge.
Low Income Tax Offset
Any Australian who earns less than $67,500 is also entitled to receive the Low Income Tax Offset. This provides those who earn less than $30,000 with a rebate of $1,500. Then for earnings between $30,000 and up to a maximum of 67,500 the rebate is reduced by 4c per dollar. In effect this means people earning $18,200 or less will have a tax payable = zero.
Taxation and calculating your Australian tax rates can be quite confusing. At Etax Local Accountants our aim is to take this confusion out of the equation. Our highly qualified accountants are highly knowledgeable on all aspects of taxation in Australia and will make doing your taxes as easy as possible.
Visit our find your nearest ELA page now
and talk to your Etax Local Accountant today.