Taxation

Calculate taxable income from gross income and deductions, find PAYG tax withheld using a tax table, calculate the Medicare levy, and determine whether a tax return results in a refund or a payment owing.

Worked examples

Finding taxable income

Straightforward

Problem

James earns a gross income of

\$72\,000

per year and claims allowable deductions of

\$3\,500

. Find his taxable income.

Medicare levy and annual PAYG tax withheld

Moderate

Problem

Aisha's annual taxable income is

\$69\,000

. The Medicare levy is

2\%

of taxable income. A fortnightly tax table shows that

\$489

is withheld each fortnight in PAYG tax. Calculate (i) the Medicare levy and (ii) the total PAYG tax withheld over the year.

Net income and tax refund from a tax return

Challenging

Problem

Raj's taxable income is

\$65\,000

. His employer withheld

\$14\,000

in PAYG tax during the year. Using the tax table below and a Medicare levy of

2\%

, determine whether Raj receives a refund or owes a payment, and state the amount.

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

Practise

Q1·Straightforward

Priya earns a gross income of

\$62\,000

and has allowable deductions of

\$1\,800

. What is her taxable income?

Q2·Straightforward

Marcus earns a gross income of

\$48\,500

and claims work-related deductions of

\$3\,250

. What is his taxable income?

Q3·Straightforward

A teacher earns

\$79\,000

gross income and claims deductions of

\$2\,640

. What is her taxable income?

Q4·Straightforward

Jasmine's gross income is

\$35\,800

. She claims self-education expenses of

\$1\,200

and work-related car expenses of

\$900

. What is her taxable income?

Q5·Moderate

Emma's annual taxable income is

\$55\,000

. The Medicare levy is

2\%

of taxable income. Calculate her Medicare levy.

Q6·Moderate

A fortnightly tax table shows that an employee earning

\$2\,600

per fortnight has

\$468

withheld in PAYG tax. How much PAYG tax is withheld in total over

26

fortnights?

Q7·Moderate

Daniel's annual taxable income is

\$82\,000

. The Medicare levy is

2\%

of taxable income. Calculate his Medicare levy.

Q8·Moderate

A weekly tax table shows that a worker earning

\$1\,350

per week has

\$270

withheld in PAYG tax. What is the total PAYG tax withheld over

52

weeks?

Q9·Challenging

Aiden's taxable income is

\$43\,000

. Use the tax table below to calculate his income tax.

Taxable income	Tax on this income
$\$0$ – $\$18\,200$	Nil
$\$18\,201$ – $\$45\,000$	$19$ cents for each $\$1$ over $\$18\,200$

Q10·Challenging

Sofia's taxable income is

\$68\,000

. Use the tax table below to calculate her total tax liability (income tax plus Medicare levy).

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

The Medicare levy is

2\%

of taxable income.

Q11·Challenging

Leo's taxable income is

\$75\,000

. His employer withheld

\$21\,000

in PAYG tax during the year. Use the tax table and Medicare levy to find the size of his tax refund.

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

Medicare levy:

2\%

of taxable income.

Q12·Challenging

Chloe's taxable income is

\$58\,000

. Her employer withheld

\$9\,500

in PAYG tax during the year. Use the tax table and Medicare levy to find the amount she owes the ATO.

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

Medicare levy:

2\%

of taxable income.

Open Math

Taxation

Number · MST-11-03

Name:

Date:

Q1Straightforward

Priya earns a gross income of

\$62\,000

and has allowable deductions of

\$1\,800

. What is her taxable income?

Q2Straightforward

Marcus earns a gross income of

\$48\,500

and claims work-related deductions of

\$3\,250

. What is his taxable income?

Q3Straightforward

A teacher earns

\$79\,000

gross income and claims deductions of

\$2\,640

. What is her taxable income?

Q4Straightforward

Jasmine's gross income is

\$35\,800

. She claims self-education expenses of

\$1\,200

and work-related car expenses of

\$900

. What is her taxable income?

Q5Moderate

Emma's annual taxable income is

\$55\,000

. The Medicare levy is

2\%

of taxable income. Calculate her Medicare levy.

Q6Moderate

A fortnightly tax table shows that an employee earning

\$2\,600

per fortnight has

\$468

withheld in PAYG tax. How much PAYG tax is withheld in total over

26

fortnights?

Q7Moderate

Daniel's annual taxable income is

\$82\,000

. The Medicare levy is

2\%

of taxable income. Calculate his Medicare levy.

Q8Moderate

A weekly tax table shows that a worker earning

\$1\,350

per week has

\$270

withheld in PAYG tax. What is the total PAYG tax withheld over

52

weeks?

Q9Challenging

Aiden's taxable income is

\$43\,000

. Use the tax table below to calculate his income tax.

Taxable income	Tax on this income
$\$0$ – $\$18\,200$	Nil
$\$18\,201$ – $\$45\,000$	$19$ cents for each $\$1$ over $\$18\,200$

Q10Challenging

Sofia's taxable income is

\$68\,000

. Use the tax table below to calculate her total tax liability (income tax plus Medicare levy).

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

The Medicare levy is

2\%

of taxable income.

Q11Challenging

Leo's taxable income is

\$75\,000

. His employer withheld

\$21\,000

in PAYG tax during the year. Use the tax table and Medicare levy to find the size of his tax refund.

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

Medicare levy:

2\%

of taxable income.

Q12Challenging

Chloe's taxable income is

\$58\,000

. Her employer withheld

\$9\,500

in PAYG tax during the year. Use the tax table and Medicare levy to find the amount she owes the ATO.

Taxable income	Tax on this income
$\$45\,001$ – $\$120\,000$	$\$5\,092$ plus $32.5$ cents for each $\$1$ over $\$45\,000$

Medicare levy:

2\%

of taxable income.

Worked solutions and answers at openmath.au/year-11/standard/earning-money/taxation