With tax season well and truly upon us, you might be wondering what your tax return might look like.
To do that, you’d be wanting to know how exactly you’re going to be taxed - which depends on your income.
Here are the income tax rates for residents for the 2019-2020 financial year:
If you earn up to $18,200…
You won’t be taxed at all.
If you earn $18,201 - $37,000...
You’ll be taxed at a rate of 19 cents to the $1 for any amount over $18,200. Or, 19 per cent of your salary.
If you earn $37,001 - $90,000…
You’ll be taxed at a rate of $3,572 plus 32.5 cents for each $1 over $37,000. Or, $3,572 plus 32.5 per cent of your salary.
If you’re wondering where the initial lump sum of $3,572 comes from, it’s deduced from the previous income bracket.
If you are taxed at 19 cents to the $1 for each dollar between $18,201 and $37,000, you’ll be paying 19 per cent of $18,800, which equals $3,572.
If you earn $90,001 - $180,000…
You’ll be taxed at a rate of $20,797 plus 37 cents for each $1 over $90,000. Or, $20,797 plus 37 per cent of your salary.
Again, the flat rate of $20,797 comes from the previous income brackets combined: 32.5 per cent of $53,000 is $17,225, plus the flat rate of $3,572 is $20,797.
If you earn above $180,001…
You’ll be taxed at a rate of $54,097 plus 45 cents for each $1 over $180,000. Or, $54,097 plus 45 per cent of your salary.
These rates don’t include the Medicare levy of 2 per cent.
Where can I get an estimate of my tax refund?
There are some calculators out there that can help you get a feel for your upcoming tax refund.
The most basic one is this tax calculator from H&R Block, which only asks for your gross annual income before tax, as well as your total tax withheld.
You can find the total tax withheld by accessing your income statement via myGov, and looking at your PayG withholding.
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