7. Income and Taxation

Worksheet

1

Each week, Jack has \$195 in PAYG tax withheld. How much does Jack pay in PAYG tax installments in a full financial year? Assume that there are 52 weeks in a year.

2

In the last financial year, Carl was paid a wage every month, and each week there was \$61 deducted as PAYG tax.

a

How much did Carl pay in total in PAYG tax last financial year?

b

At the end of the financial year, he calculates his total tax payable to be \$3049. Will he receive a refund or have tax owing?

3

Tina wants to calculate how much PAYG tax to withhold from her employees gross weekly income. She uses the formulay = a x - bwhere y is the PAYG tax to withhold, x is the number of whole dollars of gross weekly income plus 99 cents, and a and b are values obtained from the following table:

Calculate how much PAYG tax she would withhold from her employee who has a gross weekly earnings of \$833.

\text{Weekly earnings } (x) \\ \text{ less than} | a | b |
---|---|---|

\$355 | - | - |

\$422 | 0.19 | 67.4635 |

\$528 | 0.29 | 109.7327 |

\$711 | 0.21 | 67.4635 |

\$1282 | 0.3477 | 165.4423 |

\$1730 | 0.345 | 161.9808 |

\$3461 | 0.39 | 239.8654 |

\$3461 \text{ and over} | 0.47 | 516.7885 |

4

For a gross weekly income less than \$528 but greater than or equal to \$422, the amount of PAYG tax to withhold is given by the formula\text{PAYG tax to withhold} = 0.19 x - 67.4635where x is the number of whole dollars of gross weekly income plus 99 cents.

a

Calculate how much PAYG tax is withheld from a gross weekly income of \$450.

b

Calculate how much PAYG tax is withheld from a gross weekly income of \$511.40.

5

For gross weekly incomes that are \$3461 or more, the amount of PAYG tax to withhold is given by the formula\text{PAYG tax to withhold} = 0.47 x - 516.7885where x is the number of whole dollars of gross weekly income plus 99 cents. Calculate how much PAYG tax is withheld from a gross weekly income of \$3797.70.

6

Isabelle is a working holiday maker. She has a job in Australia and her taxable income for the year is \$47\,600. Use the table below to find how much income tax she is required to pay:

Taxable income | Tax on this income |
---|---|

0 - \$37\,000 | \$0.19 \text{ for each } \$1 |

\$37\,001 - \$90\,000 | \$5550 \text{ plus } \$0.325 \text{ for each } \$1 \text{ over } \$37\,000 |

\$90\,001 - \$180\,000 | \$22\,775 \text{ plus } \$0.37 \text{ for each } \$1 \text{ over } \$90\,000 |

\$180\,001 \text{ and over} | \$56\,075 \text{ plus } \$0.45 \text{ for each } \$1 \text{ over } \$180\,000 |

7

Some Australian citizens who live and work overseas, may be considered foreign residents for tax purposes. The amount of tax they pay is based on the table below:

Taxable income | Tax on this income |
---|---|

0 - \$90\,000 | \$0.325 \text{ for each } \$1 |

\$90\,001 - \$180\,000 | \$29\,250 \text{ plus } \$0.37 \text{ for each } \$1 \text{ over } \$90\,000 |

\$180\,001 \text{ and over} | \$62\,550 \text{ plus } \$0.45 \text{ for each } \$1 \text{ over } \$180\,000 |

a

Calculate the amount of income tax a foreign resident would pay if their taxable income for the year was \$71\,800.

b

Calculate the amount of income tax a foreign resident would pay if their taxable income for the year was \$123\,000.

8

The Medicare levy is charged at 2\% of taxable income. Calculate the Medicare levy on a taxable income of \$60\,000.

9

For the last financial year, Patricia claimed \$1857 in total deductions and paid a Medicare levy of \$1744. If her gross income for the year was \$ x, solve for x. Note that Medicare levy is charged at 2\% of taxable income.

10

The following table shows the tax rates for 2018 to 2019:

**Resident Tax Rate (2018-2019) Table**

Taxable income | Tax on this income |
---|---|

\$0 \text{ - }\$ 18\,200 | \text{Nil} |

\$18\,201 \text{ - }\$ 37\,000 | \$0.19\text{ for each } \$1 \text{ over } \$18\,200 |

\$37\,001 \text{ - }\$ 90\,000 | \$3572 \text { plus } \$0.325 \text{ for each } \$1 \text{ over }\$37\,000 |

\$90\,001 \text{ - }\$ 180\,000 | \$20\,797 \text { plus } \$0.37 \text{ for each } \$1 \text{ over } \$90\,000 |

\$180\,001 \text{ and over } | \$54\,097 \text { plus } \$0.45 \text{ for each } \$1 \text{ over } \$180\,000 |

Calculate the income tax payable for the following taxable incomes:

a

\$8326

b

\$36\,810

c

\$53\,395

d

\$146\,664

e

\$194\,388

f

\$158\,810

11

Carl has just been hired as a casual teacher where he will work 4 days a week for 40 weeks, earning \$349 per day. Based on the Resident Tax Rate (2018-2019) table, calculate:

a

How much Carl earns in a year.

b

The income tax payable on Carl's annual income.

12

Hermione earned a taxable income of \$91\,354 in the last financial year. Throughout the year, her employer deducted a total of \$22\,386.15 in PAYG tax instalments.

a

Calculate how much Hermione must pay in income tax for the year using the Resident Tax Rate (2018-2019) table.

b

Hermione also owes a Medicare levy of \$1827.08, in addition to her income tax. Determine whether she will receive a refund or have tax owing.

c

Find the tax amount she still owes.

13

Bianca earns an annual income of \$48\,000. Her total allowable deductions are \$1100, and she has already paid \$4900 in PAYG tax instalments throughout the year. Based on the Resident Tax Rate (2018-2019) table, calculate:

a

Her taxable income.

b

The income tax payable.

c

The Medicare levy, which is 2\% of taxable income.

d

The total amount Bianca still owes after accounting for her PAYG tax instalments, income tax payable and Medicare levy.

14

Elias has just been hired in a new role where he will earn a fortnightly income of \$5697 for an entire year.

a

Calculate how much Elias earns in a year.

b

Calculate the income tax payable on Elias's annual income using the Resident Tax Rate (2018-2019) table.

c

Elias also needs to pay \$113.94 alongside his income tax. How much PAYG tax would his employer need to withhold from his fortnightly pay so that Elias's total PAYG tax instalments for the year exactly cover his total tax payable?

15

Use the Resident Tax Rate (2018-2019) table to calculate the extra disposable income a worker will receive when given a pay rise of \$2000 per annum if he earns the following taxable income. Note that Medicare levy is charged at 2\% of taxable income.

a

\$52\,000 per annum.

b

\$90\,000 per annum.

16

Edward is a teacher who earns an annual salary of \$46\,600. He earns an additional \$3800 per year from private tutoring. He is allowed various tax deductions (for resource books etc.) amounting to \$868. Find:

a

His total gross income.

b

His taxable income.

c

His income tax payable using the Resident Tax Rate (2018-2019) table.

17

Last financial year, Roxanne's taxable income was \$157\,872. Based on the Resident Tax Rate (2018-2019) table, calculate:

a

The income tax payable on Roxanne's income.

b

The Medicare levy payable, given that it is 2\% of taxable income.

c

The total amount Roxanne needs to pay in income tax and Medicare levy.

18

Emma is a researcher with a taxable income of \$97\,589.Throughout the year, her employer has deducted \$560 per week in PAYG tax instalments.

a

Calculate the income tax payable using the Resident Tax Rate (2018-2019) table.

b

Calculate the Medicare levy, which is 2\% of taxable income.

c

Since Emma's employer has deducted more than is needed from her income, Emma is entitled to a refund for the year. Find the amount of this refund.

19

Cinta has a gross weekly income of \$1023. Each week, her employer withholds \$193 in PAYG tax. At the end of the financial year, Cinta has to submit a tax return. She has \$842 in allowable tax deductions for the year. Assuming there are 52 weeks in a year, calculate:

a

Her taxable income.

b

Her income tax payable using the Resident Tax Rate (2018-2019) table.

c

How much Cinta pays towards the Medicare levy, which is 2\% of her taxable income.

d

How much Cinta has already paid in PAYG tax instalments throughout the year.

e

How much Cinta is entitled to as a tax refund.

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