2015 Tax Rates Explained
With five different income brackets, the Medicare levy, the low income offset and hundreds of pages of tax laws, understanding personal taxation in Australia can be difficult.
With five different income brackets, the Medicare levy, the low income offset and hundreds of pages of tax laws, understanding personal taxation in Australia can be difficult.
There are some rules that take many taxpayers by surprise.
For example, you should know that the ATO classifies any interest you earn from savings or investments counts as part of your income.
The ATO tax rate applied to your income 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 2015 (2014-2015 tax year)
At Etax Local we’ve summarised Australian Tax rates for the 2014-2015 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 | $17,547 plus 37c for each $1 over $80,000 |
| **$180,001 and over | $54,547 plus 47c ** for each $1 over $180,000 |
** (including the Temporary Budget Repair Levy)
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
There are some exemptions but in general, Australian tax residents pay a Medicare levy, which is calculated at a flat rate of 2% of a taxpayer’s taxable income over a certain level. See below:
| Taxable Income | Medicare levy payable |
|---|---|
| $0 – $20,896 | Nil |
| $20,897 – $26,121 | 10% of excess over $20,543 |
| $26,122 and above | 2% of entire taxable amount |
The Medicare levy low income threshold for single pensioners below Age Pension age is $33,044.
Low Income Tax Offset
As well as there being no tax on the first $18,200 there is also a low income tax offset.
From July 1, 2012, the maximum value of the low-income tax offset reduced from $1,500 to $445, with the reduction rate being decreased to 1.5 cents for each dollar of taxable income over $37,000. If your income exceeds $66,667, no offset is available. See below:
| Taxable Income | |
|---|---|
| $0 – $37,000 | $445 |
| $37,001 – $66,666 | $445 less 1.5% of excess over $37,000 |
| $66,667 and above | Nil |
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 very knowledgeable on all aspects of taxation in Australia and will make doing your taxes as easy as possible.
