Taxation and Earnings - Aus cvu2021

Taxation and Earnings - Aus

• LI: To understand key vocabulary terms inc: income tax, tax brackets, Medicare Levy, PAYG taxation, tax deductions, net salary & gross salary

  Students will be shown how to calculate tax deductions on people’s earnings

  
  

• SC: Students will be able to:

  Calculate how much tax is deducted across different tax brackets Work out a person’s gross and net earnings after applying deductions

Taxes

• An adult living expenses in Australia is $34000 per year.

• If you earn $18200 or less you do not need to pay taxes.

• Tax is money people and businesses pay to the Australian Government to provide services, including:

  health education defence roads and railways social security and other payments from Centrelink – Services Australia.

• The more you earn the more taxes you pay

So how do we know how much does each person pay?

The left column are called tax brackets.

We read accross to find the taxes we have to pay.

Multiple Select

Which of these are examples of tax brackets

• $120,001 – $180,000

• $51, 667 plus 45c for each $1 over $180,000

Multiple Choice

In which tax bracket does an income of $30 000 belong?

• 0 – $18,200

• $18,201 – $45,000

• $45,001 – $120,000

• $120,001

  – $180,000

• $180,001 and over

Example 1 (copy into notes)

Tax on $40 000 income

• Step 1: Find the bracket

• $18,201-$45000

• Step 2: Read

• 19c for each $1 over $18,200

• Step 3: Calculate

• Tax = 0.19 x (40 000 - 18 200)

• =$13 832

Example 2 (copy into notes)

Tax on $80 000 income

• Step 1: Find the bracket

• $45,001 – $120,000

• Step 2: Read

• $5,092 plus 32.5c for each $1 over $45,000

• Step 3: Calculate

• Tax = 5092 + 0.325 x (80 000 - 45 000)

• =$16467

Multiple Choice

How much tax does a dentist who earns $131 338 have to pay?

• $18 200

• $48 600

• $29 456

• $33 651

Medicare Levy

• 2.0% of taxable income.

• (the scheme that gives Australian residents access to health care)

Calculate the medicare levy on a salary of $50 000

• $50 000 x 2.0%

• = 50 000 x 0.02

• =$1000

Salary

• Gross salary: amount before tax

• Net Salary: amount that you actually receive.

• 
  

Family Tax Benefit

• Government allowance

• added to the gross salary

Deductions

• e.g. union fees, private health insurance, other allowances such as equipment costs.

• subtracted from the gross salary

Multiple Choice

What is gross earnings?

• The total amount of wages on your paycheck

• Three taxes that everyone must pay

• How much a person is worth in total

• The amount of your paycheck after taxes are taken out

Multiple Choice

What is net pay?

• The total earnings on your paycheck

• Three taxes that everyone must pay

• How much a person is worth in total

• The amount of your paycheck after taxes are taken out

11.7

Complete questions 1-11.

Do not copy the question.

CLEARLY label all amounts with key words (e.g. gross pay, deduction etc)

Multiple Choice

Which is correct?

PAYG

• Just like salary is not given to you as a lump sum, taxes are also broken down per payment.

• Pay As You Go taxation is taken out to cover your income tax and medicare levy.

• Use the table to find out how much you should pay each week.

Example 3

• Wendy earns $900 per week as a translator.

• Q: Use the PAYG table to find the amount of tax that should be deducted.

• A: $148

• Q: what percentage of her income is deducted?

• (148/900) x 100%

• =16.44%

Example 3

• Wendy earns $900 per week as a translator. (PAYG: $148)

• Q: If she receives $98 in youth allowance but has deductions of $71 in superannuation and $5 in union fee, what is her net pay?

• Total income: $900 + $98 = $998

• Total deductions: $148 + $71 +$5 = $224

• Net Pay: $998 - $224

• =774

Multiple Choice

Your gross pay is $525.50. Your net pay is $446.75. How much money was deducted from your pay check?

• $ 972.25

• $ 70.00

• $ 78.75