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Tax & Insurance
Updated Dec 19, 2022
Mate Checked
This information has been reviewed by our SMSF Mates before it was published as part of our review process.
We find it particularly difficult to locate the marginal tax rates for Australians in one place.
Jump to a specific part of this page:
Below you will find the ATO published income tax rates for the 2019/2020 financial year.
We find these particularly misleading as it does not give you the full picture. Read on to see the actual income tax rates we Australians pay.
Income thresholds | Tax rate | Tax payable on this income |
$0 – $18,200 | 0% | Nil |
$18,201 – $37,000 | 19% | 19c for each $1 over $18,200 |
$37,001 – $90,000 | 32.50% | $3,572 plus 32.5% of amounts over $37,000 |
$90,001 – $180,000 | 37% | $20,797 plus 37% of amounts over $90,000 |
$180,001 and over | 45% | $54,097 plus 45% of amounts over $180,000 |
Based on the above table, and the following incomes, you would expect the following numbers if you were any normal human other than a tax accountant
Income thresholds | Tax rate | Tax Payable | Effective |
$18,200 | 0% | 0 | 0% |
$37,000 | 19% | $3,384 | 9% |
$90,000 | 32.50% | $20,797 | 23% |
$180,000 | 37% | $54,097 | 30% |
$250,000 | 45% | $85,597 | 34% |
$500,000 | 45% | $198,097 | 40% |
We are certain that you really only just care about money in your pocket, and so this table demonstrates the net effect of the Marginal Tax System, Offsets for Low Income Earns, Medicare Costs and the Division 293 Additional Tax on Super.
Income thresholds | Tax | Super | Medicare | Net Pay | Effective |
$18,200 | 0 | $1,729 | 0 | $18,200 | 0% |
$37,000 | $2,872 | $3,515 | $740 | $33,388 | 10% |
$90,000 | $19,716 | $8,550 | $1,800 | $68,484 | 24% |
$180,000 | $54,096 | $17,100 | $3,600 | $122,304 | 32% |
$250,000 | $89,158 | $23,750 | $5,000 | $155,841 | 38% |
$500,000 | $211,971 | $47,500 | $10,450 | $277,579 | 44% |
These tables don’t take into account a raft of other tax benefits and/or issues such as
Taxable income | Tax rate | Tax Payable |
$0 – $18,200 | 0% | Nil |
$18,201 – $37,000 | 19% | 19% for amounts over $18,200 |
$37,001 – $90,000 | 32.50% | $3,572 + 32.5% for amounts over $37,000 |
$90,001 – $180,000 | 37% | $20,797 + 37% for amounts over $90,000 |
$180,001 and over | 45% | $54,097 + 45% for amounts over $180,000 |
Source: ATO
Taxable income | Tax rate | Tax Payable |
$0 – $18,200 | 0% | Nil |
$18,201 – $37,000 | 19% | 19% for amounts over $18,200 |
$37,001 – $90,000 | 32.50% | $3,572 + 32.5% for amounts over $37,000 |
$90,001 – $180,000 | 37% | $20,797 + 37% for amounts over $90,000 |
$180,001 and over | 45% | $54,097 + 45% for amounts over $180,000 |
Source: ATO
Taxable income | Tax rate | Tax Payable |
$0 to $18,200 | 0% | Nil |
$18,201 – $45,000 | 19% | 19% for amounts over $18,200 |
$45,001 – $120,000 | 32.50% | $5,092 + 32.5% for amounts over $45,000 |
$120,001 – $180,000 | 37% | $29,467 + 37% for amounts over $120,000 |
$180,001 and over | 45% | $51,667 + 45% for amounts over $180,000 |
Source: ATO
Taxable income | Tax rate | Tax Payable |
$0 to $18,200 | 0% | Nil |
$18,201 – $45,000 | 19% | 19% for amounts over $18,200 |
$45,001 – $120,000 | 32.50% | $5,092 + 32.5% for amounts over $45,000 |
$120,001 – $180,000 | 37% | $29,467 + 37% for amounts over $120,000 |
$180,001 and over | 45% | $51,667 + 45% for amounts over $180,000 |
Source: ATO
Income year | Turnover | Tax rate for “Base Rate” Entities | Tax rate for all other companies |
---|---|---|---|
2017–18 |
$25m |
27.5% |
30.0% |
2018–19 to 2019–20 |
$50m |
27.5% |
30.0% |
2020–21 |
$50m |
26.0% |
30.0% |
2021–22 |
$50m |
25.0% |
30.0% |
Source: ATO
According to the ATO, you company needs to be a small business entity to be eligible for the lower company tax rate in the 2015–16 and 2016–17 income years.
For the 2016–17 income year, the ‘small business’ company tax rate was 27.5%.
This lower rate applies to small businesses that have an aggregated turnover less than $10 million and are carrying on a business for all or part of the year.
For the 2017–18 income year and onwards, you need to be a base rate entity, rather than a small business entity to be eligible for the lower tax rate.
From the 2017–18 income year, companies that are base rate entities must apply the lower 27.5% company tax rate.
To be considered as a Base Rate entity, your company has an aggregated turnover less than the aggregated turnover threshold – which is $25 million for the 2017–18 income year and 80% or less of your assessable income is base rate entity passive income – this replaces the requirement to be carrying on a business.
Troy has more than 15 years investment and fund management experience, including management of hedge funds and multi-strategy funds. Troy has raised and managed over 300 million dollars in investments and has engaged and serviced over 150 high-net-worth clients for Non-Correlated Capital, the investment company which he serves as CEO and Portfolio Manager. Based out of Perth, Western Australia, Troy is one of the founders of SMSF Mate.
Troy’s educational qualifications include a Masters of Business Administration, Masters of Applied Finance, and Advanced Diploma, Financial Markets, completed at Charles Sturt University. Troy has also previously worked as a derivatives trader and the managing director of a civil engineering company.
You can find out more about Troy or connect with him on Linkedin here: https://www.linkedin.com/in/troy-burns-6652864/
Or visit his website here: https://noncorrelatedcapital.com
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SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.