2011/2012 Income Tax Rates

Ever wanted to know how to calculate your individual income tax rates? Well the ATO supply the data but many people are not aware of what they are and how to calculate your actual tax rate and effectively how much tax you will pay.

We will share with you the income tax rates in Australia based on how much you earn and with a real life example of how you can calculate your tax for the year based on this data. Nice and simple, just the way the ATO don’t like to make it!

• $0 to $6,000 = No tax to pay, yay
• $6,001 to $37,000 = 15cents for every dollar over $6,000
• $37,001 to $80,000 = $4,650 plus 30 cents for every dollar over $37,000
• $80,001 to $180,000 = $17,550 plus 37 cents for every dollar over $80,000
• $180,001 and over = $54,550 plus 45 cents for every dollar over $180,000

EXAMPLE

Let’s say you earn $55,000 per year. Straight away you need to pay $4,650.

Now you need to pay 30 cents for every dollar over $37,000 as per the guidelines above.

This means you need to times 30 cents by $18,000 dollars. That means you owe another $5,400 in tax (0.30 x 18,000). Combine this with the $4,650 you owed from the start and a salary of $55,000 is taxed exactly $10,050.

Nice and simple and something you should get in the habit of knowing how to do in order to better understand the amount of tax you will be paying. If you pay more than this without earning more, you will get a refund. You can also talk with an accountant or research ways to claim deductions that are relevant to your work – this is a great way of offsetting your income by reducing it with deductions which ultimately means less tax and more refund.