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v1 Financial Maths, STD2 F1 2021 HSC 22

The table shows the income tax rates for the 2020–2021 financial year.

\begin{array}{|l|l|}
\hline
\rule{0pt}{2.5ex}\text{Taxable income} \rule[-1ex]{0pt}{0pt}& \quad \quad \quad \quad \text{Tax payable on this income} \\
\hline
\rule{0pt}{2.5ex}0 - \$18 200 \rule[-1ex]{0pt}{0pt}& \text{Nil}\\
\hline
\rule{0pt}{2.5ex}\$18\,201 - \$45\,000 \rule[-1ex]{0pt}{0pt}& \text{19 cents for each \$1 over \$18 200} \\
\hline
\rule{0pt}{2.5ex}\$45\,001-\$120\,000 \rule[-1ex]{0pt}{0pt}& \text{\$5092 plus 32.5 cents for each \$1 over \$45 000} \\
\hline
\rule{0pt}{2.5ex}\$120\,001 - \$180\,000 \rule[-1ex]{0pt}{0pt}& \text{\$29 467 plus 37 cents for each \$1 over \$120 000} \\
\hline
\rule{0pt}{2.5ex}\$180\,001 \ \text{and over} \rule[-1ex]{0pt}{0pt}& \text{\$51 667 plus 45 cents for each \$1 over \$180 000} \quad \\
\hline
\end{array}

Stephanie earns a gross annual salary of $96 000. She claims allowable tax deductions of $1250 for work-related travel and $350 for professional development. Stephanie must also pay a Medicare Levy of 2% of her taxable income.

Calculate the total tax payable by Stephanie including the Medicare Levy.   (3 marks)

--- 6 WORK AREA LINES (style=lined) ---

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\(\$23\,035\)

Show Worked Solution

\(\text{Taxable income}=96\,000-1250-350=$94\,400\)

\(\text{Income tax}=5092+0.325(94\,400-45\,000)=$21\,147\)

\(\text{Medicare Levy}=0.02 \times 94\,400=\$1888\)

\(\therefore \ \text{Total tax payable}=21\,147 + 1888= $23\,035\)

Filed Under: Tax and Percentage Increase/Decrease (Std 2-X), Taxation (Y11-X) Tagged With: Band 4, smc-7723-10-Tax Tables, smc-7723-20-Medicare Levy

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