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The table shows the income tax rates for the 2020–2021 financial year - HSC - SSCE Mathematics Standard - Question 22 - 2021 - Paper 1

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The table shows the income tax rates for the 2020–2021 financial year. Taxable income Tax payable on this income 0 – $18 200 Nil $18 201 – $45 000 19 cents for ea... show full transcript

Worked Solution & Example Answer:The table shows the income tax rates for the 2020–2021 financial year - HSC - SSCE Mathematics Standard - Question 22 - 2021 - Paper 1

Step 1

Calculate taxable income

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Answer

The taxable income is calculated by subtracting the allowable deductions from the gross annual salary:

extTaxableIncome=84,000−900−474=82,626 ext{Taxable Income} = 84,000 - 900 - 474 = 82,626

Step 2

Calculate income tax payable

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Answer

Using the tax brackets, the income tax payable for a taxable income of 82,626fallsunderthebracketof82,626 falls under the bracket of 45,001 – $120,000:

extIncomeTaxPayable=5092+0.325imes(82,626−45,000)=17,320.45 ext{Income Tax Payable} = 5092 + 0.325 imes (82,626 - 45,000) = 17,320.45

Step 3

Calculate Medicare Levy

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Answer

The Medicare Levy is calculated as 2% of the taxable income:

extMedicareLevy=0.02imes82,626=1,652.52 ext{Medicare Levy} = 0.02 imes 82,626 = 1,652.52

Step 4

Calculate total tax to be paid

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Answer

The total tax payable including the Medicare Levy is:

extTotalTax=17,320.45+1,652.52=18,972.97 ext{Total Tax} = 17,320.45 + 1,652.52 = 18,972.97

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