Australian Average 2009 tax rates
Income Tax
Tax rates 2008-09
Ok so – I earn $60,000 x 30% tax rate = I pay $18,000 tax – right?? (No! this is wrong!). Individual tax rates are a MARGINAL system – on the first $6,000 you pay nothing, then 15% for the next amount, etc.
Below is the (CRAP!) ATO tax table telling how to work out how much you are taxed.
| Taxable income | Tax on this income | |||||
| $1 – $6,000 | Nil | |||||
| $6,001 – $34,000 | 15c for each $1 over $6,000 |
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| $34,001 – $80,000 | $4,200 plus 30c for each $1 over $34,000 |
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| $80,001 – $180,000 | $18,000 plus 40c for each $1 over $80,000 |
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| $180,001 and over | $58,000 plus 45c for each $1 over $180,000 |
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So if you earn $60,000 you will pay $12,000 tax. Now if you divide tax by taxable income $60,000 you get 20%. So the average rate of tax you actually pay is 20%. (although obviously any dollar$ you earn over $60,000 you will pay 30c tax until $80,000 then 40c, etc.). The (WAY BETTER!) table below shows how this works:
| 1 | 2 | 1 divided by 2 | % tax on extra $ |
| Taxable Income | Tax | Average Rate | Marginal rate |
| 6,000 | 0 | 0.0% | 0.0% |
| 10,000 | 600 | 6.0% | 15.0% |
| 15,000 | 1,350 | 9.0% | 15.0% |
| 25,000 | 2,850 | 11.4% | 15.0% |
| 34,000 | 4,200 | 12.4% | 30.0% |
| 40,000 | 6,000 | 15.0% | 30.0% |
| 50,000 | 9,000 | 18.0% | 30.0% |
| 60,000 | 12,000 | 20.0% | 30.0% |
| 80,000 | 18,000 | 22.5% | 40.0% |
| 150,000 | 46,000 | 30.7% | 40.0% |
| 180,000 | 58,000 | 32.2% | 45.0% |
| 250,000 | 94,500 | 37.8% | 45.0% |
| 500,000 | 207,000 | 41.4% | 45.0% |
Now if you earned $50,000 this year you can tell your friends that you paid 18% tax (and have them telling you that you are wrong!).
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Tags: average, average tax, individual tax rates, marginal, Tax, tax rate, tax rates