How Much Tax Will You Pay?



As we know that most employees usually have a pay-as-you-go (PAYG) tax withdrawn from every salary or income, which, in all likelihood, isn't going to be the sum of money that you will owe for your tax return. Why is it not so? Because it is just a rough calculation based on the presupposition that no matter what amount of income you receive in your pay packet is the sum that you will be getting for the rest of the year. So, if by any chance, your income changes - there is an increase in your income, or you lose your job hence your income coming from that job too - then the appraisal for the initial part of the year is not going to be in alignment. Also, PAYG tax doesn't give a satisfactory record of additional income, such as share dividends, rental income, and bank interest; neither does it factor in decline (this is something which almost everyone claims to certain confines). Things such as the Medicare Levy should be factored in the PAYG calculations because issues such as not yet paid HECS debt presumably won't be (except that you have pointed it out about the obligation to your employer). Here, you should put your trust in Utax Accountants without any fear because we adequately follow the requests to tailor solutions that are right to you.

If you have hired a registered tax agent to file your return, they should be competent of giving you a relatively good idea of what your performance should be (it is not necessarily 100% right, because the ATO can have a different aspect of some things as to whether or not an deduction is appropriate). We are tax accountants on whom you can rely for your tax return. We are a professional accounting firm with years of experience dealing in taxation returns for Individuals, we can help you to achieve the outcome you desire.

If it is you who is filing your return, you should also end up with a tax payable amount; nevertheless, if you want to have a rough estimate of how much tax it is that you can pay in advance, the following will give you an outline of Australia's tax calculation criteria.

Most importantly, the tax is not taken from you on all of your before-tax income or salary; you are taxed on the income that is taxable. Keeping in view your set of conditions, there are some exemptions, but fundamentally, your income or salary that is taxable is your income or payroll which is assessable, subtracting any allowable deductions.

As soon as you are aware of your taxable income, calculating your tax is relatively simple. Australia has a refined tax rate, which conveys that the more your taxable income is, the more percentage of your income you will have to pay in tax. However, a situation that usually confuses many is that you only pay the higher rate on the income over every threshold. For instance, if what you earn is less than $18,200, you are not to pay any tax because you are under the tax-free threshold. If you make $25,000, you'll have to pay 19% tax, but it is not that you will have to pay 19% of the $20,000 ($4,750), you will only have to pay 19% on $6,800 ($20,000 - $18,200, which is $1292).

The ATO table below gives the rates for every tax bracket. The lump sum given for incomes more than $37,000 makes up for the maximum quantity of money you would be obliged to pay from all the lower tax brackets, whereas the number of cents per dollar permits you to calculate precisely as to what you have to pay for the bracket you land in. So, if you make $91,000, you would estimate 37% of $1,000 ($91,000 - $90,000), which then becomes $370, and add that to $20,797, this makes the sum of tax that you have to pay on all your income up to the $90,000 threshold.

The rates given below for the year 2018-2019 implement from 1 July 2018.


Taxable Income                                      Tax on this income

0 – $18,200                                               Nil

$18,201 – $37,000                                    19c for every $1 over $18,200

$37,001 – $90,000                                   $3,572 plus 32.5c for each $1 over $37,000

$90,001 – $180,000                                 $20,797 plus 37c for each $1 over $90,000

$180,001 and over                                   $54,097 plus 45c for each $1 over $180,000


Furthermore, you would need to calculate your Medicare Levy that is 2% of your total taxable income. Based on your income, you may need to pay the Medicare Levy Surcharge (between 1-1.5%) and the Temporary Budget Repair Levy (at present 2% if you make over $180,000).

You should also acknowledge that the ATO may not concur with your calculations or permit all of your deductions, but at the minimum, now you may be able to get a rough estimate of the amount of tax that you might have to pay.

© UTAX Accountants