Ideas Tax Knowledge Blog

Taxable income, tax payable

Written by Ideas Group | May 6, 2020 2:00:00 AM

Q1: To find Ted Jones's taxable income for 2016/17:

Assessable income: Salary + Car reimbursement + Other income = $92,000 + $3,400 + $2,000 = $97,400

Deductions: Car expenses + Interest paid + Donations = $3,200 + $750 + $250 = $4,200

Taxable income = Assessable income - Deductions = $97,400 - $4,200 = $93,200

Note: The employer-paid holiday is neither taxed nor exempt income, and entertainment expenses are not deductible.

Q2: To calculate his tax payable (including Medicare Levy):

Tax payable on Salary: $0 (up to $18,200) + ($37,000 - $18,200) * 19% + ($87,000 - $37,000) * 32.5% + ($93,200 - $87,000) * 37% = $22,116

Dependent Invalid Carer Tax Offset (DICTO): $2,335

Zone Rebate (Zone B): $599.20

Medical Expenses Rebate: $880.20

Medicare Levy (2% of taxable income): $1,864

Total Tax Payable = $22,116 - $2,335 - $599.20 - $880.20 + $1,864 = $20,165.60

Got questions? Reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment on our live calendar.