Join our investing community

Silly income tax question...

Discussion in 'Accounting, Tax & Legal' started by Starkers, 18th Feb, 2008.

  1. Starkers

    Starkers Member

    Joined:
    23rd May, 2007
    Posts:
    8
    Location:
    Sydney
    This may be a dumb question, nonetheless...

    If my annual income including super is say $150000, and I want to calculate the amount of income tax payable annually on that $150k (for simplicities sake let's assume no other income and exclude medicare levy surcharge, etc) - is my assessable income for tax purposes considered to be $150k, or is it $150 - super @ 9% = $136.5k? I.e. if using the calculator in the link below, would I enter $150k as annual income or $136.5k?

    Income Tax Calculator - Yahoo!7 Money Matters

    Thanks for your help!
     
  2. bailey

    bailey Member

    Joined:
    25th Jan, 2008
    Posts:
    14
    Location:
    Central Qld
    Your assessable income is without super.

    I don't think you calculate it by going $150,000 x 9%. As 9% = $13,500 and income = $136,500.. Which actually means your employer is paying your super @ 9.9% not 9%.

    You should be calculating "income + 9% = $150,000".
    Therefore your income should be about $137,600.
    $137,600 + 9% ($12,384) = $150,000 (actually $149,984 but you get the picture)..

    Hope that helps...
     
  3. Starkers

    Starkers Member

    Joined:
    23rd May, 2007
    Posts:
    8
    Location:
    Sydney
    Yes - that makes sense - thanks! So just confirming that my assessable income for tax purposes would therefore be $137,600 (not $150k)? Basically just trying to work out what monthly take home would be after tax, super, etc.
     
  4. bailey

    bailey Member

    Joined:
    25th Jan, 2008
    Posts:
    14
    Location:
    Central Qld
    Spot on :cool:
     
  5. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    I assume you are an employee since you mention 9%.

    Has your employer told you that your "salary package" is $150k INCLUDING the 9% SGC ?

    Or is your reported salary $150k, and your employer looks after the super ?

    It makes a difference, as your assessable income is you basic salary and does not include your employer's SGC contribution.

    Cheers,

    Rob
     
  6. tonyused

    tonyused Active Member

    Joined:
    9th Jan, 2008
    Posts:
    32
    Location:
    Perth, Western Australia
    Assessable income is the income YOU get taxed on, ie - it's assessed for tax to you.

    You can get benefits before tax - like super, fringe benefits - this is not assessable to you but to the employer, unless it's exempt.
     
  7. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Starkers,

    The maximum SG required by your employer is $36,470 per quarter or $145,880 pa x 9% = $13,129.20.

    If your employer has said your "package" is $150,000 they usually include super, you can $150,000 / 1.09 = $137,614.68 base salary plus $12,385.32 as your SGC.

    The SGC and salary sacrifice contributions aren't taxed in your hands as they are taxed at 15% going into your superannuation account.

    So you'd punch in the $137,614 plus any other income or capital gains you receive in the year into the calculator.

    Cheers,

    Dan

    PS Before making a taxation decision speak to your accountant or tax adviser.
     
  8. Starkers

    Starkers Member

    Joined:
    23rd May, 2007
    Posts:
    8
    Location:
    Sydney
    Thank you all for your comments - I now have a very clear understanding of this.