Income tax is levied on taxable income, which is calculated as [assessable income] less [any allowable deductions]. Deductions include wages, cost of stock, rent, bad debts, and previous year losses.
You can use the tax tables to determine how much you are taxed.
Resident Tax Rates 2014-15*
*The quoted rates do not include the 1.5% Medicare Levy or the Medicare Levy Surcharge
|Taxable income||Tax on this income 2014/2015|
|$0 - $18,200||$0|
|$18,201 - $37,000||19c for each $1 over $18,200|
|$37,001 - $80,000||$3,572 plus 32.5c for each $1 over $37,000|
|$80,001 - $180,000||$17,547 plus 37c for each $1 over $80,000|
|$180,001 and over||$54,547 plus 45c for each $1 over $180,000|
* Medicare Levy is 2% for the 14/15 year. Budget repair levy of 2% introduced from 1/7/14 for taxable incomes in excess of $180,000-
Nonresident Tax Rates 2014-15
|Taxable income||Tax on this income|
|$0 - $80,000||32.5c for each $1|
|$80,001 - $180,000||$26,000 plus 37c for each $1 over $80,000|
|$180,001 and over||$63,000 plus 45c for each $1 over $180,000|
MORE: See the ATO website for more information on Individual Income Tax Rates.
A company is a distinct legal entity with its own income tax liability so a Company Tax Return must be completed for each company. A company's income tax is calculated as a percentage of the taxable income the company earned during the financial year. The company tax rate is 30%. From 1/7/15 tax rate for small businesses is 28.5%.
A partnership running a business must complete a Partnership Tax Return to show all income earned and deductions claimed for expenses during the course of the business and how the profit or loss was shared between the partners. Each partner pays tax on their share of the partnership's income so they must include their individual share of the net partnership profit or loss in their personal tax return.
Sole traders are not required to complete a separate return for their business. They use their personal income tax return to report their business income and deductions.