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Tax thresholds explained

Australian residents who undertake paid work, are required by law to pay tax (dependent on their level of income).

This compulsory tax the Government levies on Australian worker’s income, is a major contributer to its revenue. The Government then uses the revenue from taxes and other revenue streams to pay for expenses, which they detail in their annually released budget.

Tax is withheld on worker’s income once the level of income exceeds the tax free threshold. Currently, the tax free threshold of yearly income is $18,200.  This means the first $18,200 you earn is not taxable.

Once the tax free threshold of $18,200 has been exceeded in earnings, workers can expect to be taxed at the following rates:

Taxable Income Tax on income
$0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,000 – $180,000 $19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 45c for each $1 over $180,000

Note: This tax table does not include Medicare Levy, Surcharge or HELP debt repayments.  Speak to an accountant to receive specific tax advice.

During the year your employer deducts tax based on an Australian Taxation Office (ATO) formula under a Pay As You Go scheme (PAYG) to ensure you have paid enough tax over the year.

After each financial year which runs from the 1st July through to the 30th of June the following year, a worker needs to lodge a tax return. Tax returns can be lodged by the individual or by a professional tax agent or accountant.

If an individual has ended up pay too much tax or has a number of taxable deductions that reduce their taxable income, there can be a tax refund.

Generally, individuals who have had the correct amount of tax withheld under PAYG do not receive significant refunds as the scheme was designed to cover the correct amount of tax paid by a worker to within a close range.

Depending on your individual circumstances, there may be additional tax amounts such as Medicare Levy & surcharge and potential HELP debt repayments.

 

Plant & Associates with offices at Beenleigh and the Gold Coast, have qualified tax accountants who can prepare and lodge tax returns for individuals and businesses to ensure you are in fact claiming correct deductions and paying correct amounts of tax.

Our broad range of tax services include assistance with:

  • Pay as you go (PAYG) Summaries
  • Business Activity Statements (BAS)
  • Instalment Activity Statements (IAS)
  • Fringe Benefit returns (FBT)
  • Superannuation
  • Payroll Tax
  • Income Tax returns for all entities – (Individuals, Sole Traders, Trusts, Partnerships, Companies and Self Managed Superannuation Funds)
  • Tax planning

If you are an individual, business or corporation needing assistance with tax matters, talk to the expert tax accountants at Plant & Associates on 07 5596 5758 at either our Beenleigh or Gold Coast offices.

Our highly experienced tax accountants can take the stress and hassle out of tax compliance and preparing and lodging tax returns!

Please note that due to Covid 19 restrictions, we can only have one client in a meeting with a staff member at any one time. We will be staggering appointments and staff availability due to this.
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