Australia Income Tax Rates 2009 - 2010Australia Income Tax Rates for 2009 - 2010
Tax Rates for Residents
AUD$ 1 - 6,000 Nil
AUD$ 6,001 - 35,000 15c for each AUD$ 1 over 6,000
AUD$ 35,001 - 80,000 AUD$ 4,350 plus 30c for each AUD$ 1 over AUD$ 35,000
AUD$ 80,001 - 180,000 AUD$ 17,850 plus 38c for each AUD$ 1 over AUD$ 80,000
AUD$ 180,001 and over AUD$ 55,850 plus 45c for each AUD$ 1 over AUD$ 180,000
The above rates do not include the Medicare levy of 1.5%. Tax offsets reduce the tax payable. Tax offsets based on taxable income levels apply to a range of circumstances. The Australian tax rates for 2009 - 2010 above apply from 1 July 2009 (The tax year in Australia begins July 1 and ends June 30 next year).
The tax rates above apply to residents of Australia. A person is considered to be resident of Australia for taxation purposes if they have:
- Always lived in Australia;
- Come to Australia to live permanently; or
- Been in Australia for more than half of a financial year.
One will not be considered a resident for tax purposes if they leave Australia permanently or are holidaying in Australia or visiting for less than six months. Residency for tax purposes is determined separately and independently each financial year. Therefore, even if you are a resident one year, this does not necessarily mean that you will be deemed a resident in the next financial year.
Australia Income Tax Rates for 2009 - 2010
Tax Rates for Non-Residents
AUD$ 0 - 35,000 29c for each $1
AUD$ 35,001 - 80,000 AUD$ 10,150 plus 30c for each AUD$ 1 over AUD$ 35,000
AUD$ 80,001 - 180,000 AUD$ 23,650 plus 38c for each AUD$ 1 over AUD$ 80,000
AUD$ 180,001 and over AUD$ 61,650 plus 45c for each AUD$ 1 over AUD$ 180,000
Non-residents are not required to pay the Medicare levy of Australia. The Australian tax rates for 2009 - 2010 above apply from 1 July 2009 (The tax year in Australia begins July 1 and ends June 30 next year).
If you are a non-resident of Australia for tax purposes, Australian tax is only payable on income that is earned in Australia. The main effects of being a non-resident are as follows:
- There is no tax free threshold; i.e. all salary and wage income earned in Australia is taxable.
- No requirement to pay the Medicare levy (non-residents do not receive the benefits of Medicare).
- There is a requirement to show Australian rental income in your tax return.
- Tax is withheld from unfranked dividends.
Australia Personal Tax Rates 2010 - 2011Australia Income Tax Rates for 2010 - 2011
Tax Rates for Residents
Taxable Income (AUD$) / Tax on Income / Tax Rate %
AUD$ 0 - 6,000 0 0%
AUD$ 6,001 - 37,000 AUD$ 4,650 15%
AUD$ 37,001 - 80,000 AUD$ 17,550 30%
AUD$ 80,001 - 180,000 AUD$ 54,550 37%
AUD$ 180,001+ 45%
Australia Income Tax Rates for 2010 - 2011
Tax Rates for Non-Residents
Taxable Income (AUD$) / Tax on Income / Tax Rate %
AUD$ 0 - 37,000 AUD$ 10,730 29%
AUD$ 37,001 - 80,000 AUD$ 23,630 30%
AUD$ 80,001 - 180,000 AUD$ 60,630 37%
AUD$ 180,001+ 45%
Low Income Tax Offset in 2009 - 2010 and 2010 -2011
- For the 2009 - 2010 tax year the maximum Low Income Tax Offset will be $1,350. The effect of this offset is that no tax is payable on incomes up to $15, 000 in 2009 - 2010. This offset finally cuts out once a taxpayer's assessable income reaches $63,750 in this tax year.
- For the 2010 - 2011 year the maximum Low Income Tax Offset will be $1,500. The effect of this increase is that no tax is payable on income up to $16,000 in 2010 - 2011. The Low Income Tax Offset is no longer available once the taxpayer's income reaches $67,500 in this tax year.
The Low Income Tax Offset does not reduce a person's liability for the Medicare Levy.
Australia Corporate TaxAustralia corporate tax rate for 2009 - 2010 is 30%.
Australian resident companies are subject to company income tax on their income derived from all sources. Non-resident companies are required to pay income tax only on Australian-sourced income.
Resident companies are those that are incorporated in Australia or those that carry on business in Australia and either have their central management and control in Australia or their voting power controlled by shareholders who are Australian residents.
The tax year runs from 1 July to 30 June. Companies' financial years usually coincide with the tax year. A taxpayer can choose to have an accounting period different to the tax year if they wish but this will require additional costs of preparing another set of accounts based on the tax year. Alternatively, if a taxpayer has a good reason for having a financial year other than 1 July to 30 June they can apply to the Australian Tax Office to have a substituted accounting period (SAP) and align the tax year with their financial year. The Australian Tax Office will generally accept applications for an SAP where an Australian subsidiary wants to align its tax year with its foreign parent company's financial year.
The company tax rate for 2009 - 2010 tax year is 30% of the company's taxable income.
Fringe benefits tax (FBT): Fringe benefits tax is a Federal tax that is payable by resident and non-resident employers on certain benefits that are provided to their employees. The tax is levied at a rate of 46.5% on the 'grossed-up taxable value' of each benefit that is provided to employees. FBT is separate from income tax.
In calculating the 'grossed-up taxable value' of a fringe benefit, the provider must first determine whether they are entitled to a GST input tax credit on that benefit. If so entitled, the value of the benefit must be 'grossed up' using a rate of 2.0647. In all other cases, the value of the benefit is grossed up using a rate of 1.8692.
The grossing up methodology effectively levies tax on the benefit at the rate of tax that an employee on the highest marginal tax rate would pay on the cash salary required for them to pay for the benefit out of after tax salary and taking into account any GST input tax credit the employer can claim on providing the benefit.
Employees can make non-tax deductible contributions towards the private use component of a benefit to reduce the taxable value, thereby reducing the FBT payable.
Any Fringe benefits tax paid in Australia by an employer is generally deductible for Australian income tax purposes.
Superannuation contributions: Employers are required to make superannuation contributions on behalf of their employees at a rate of 9% of the employee's salary and wages. Contributions are required on a quarterly basis.
Superannuation contributions made by employers for their employees are generally income tax deductible. However, the employee is taxed at the rate of 31.5% on contributions in excess of AUD $50,000 pa if the employee is under the age of 50; or AUD $100,000 pa if the employee is aged 50 or over.
Foreign tax relief: Where foreign sourced income is included in assessable income tax credits are available for the lesser of the foreign tax paid or the Australian tax payable. For example, any withholding tax paid on a dividend from a foreign company will generally be allowed as a foreign tax credit.
Withholding taxes: Withholding tax must be deducted from interest, royalties and dividends (to the extent they are not franked) paid to non-residents. Liability for the remittance of withholding taxes rests with the payer of such amounts and remittances of withholding tax should be made by the 21st day of the month following the month in which the payment took place. The payer is also required to lodge an annual report with the Commissioner of Taxation where such amounts have been withheld during the financial year.
The relevant withholding tax rates are:
1. Dividends - franked: 0%
2. Dividends - unfranked: 0 - 15% (treaty countries); 30% (non-treaty countries)
3. Interest: 10%
4. Royalties: 5% - 15% (treaty countries); 30% (nontreaty countries)
Australia Goods and Services Tax (GST)The standard rate of Goods and Services Tax (GST) in Australia is 10%.
Goods and Services Tax (GST) is a transaction based tax (subject to exceptions) on the inputs and outputs of an organisation's business activities. Goods and Services Tax (GST) is charged at each step in the supply chain, with GST-registered businesses including Goods and Services Tax (GST) in the price of goods and services being sold by those businesses. There are other types of sales where Goods and Services Tax is not included in the price; these include 'input taxed' sales such as financial supplies or 'GST-free' sales such as exports of goods and services.
All entities that carry on an enterprise in Australia are required to register for the goods and services tax (GST) if their annual turnover meets the registration turnover threshold of AUD $75,000 or AUD $150,000 for not-for-profit organisations.
Once registered, entities are required to charge a 10% GST on all goods and services that they supply within Australia, unless the supplies are specifically excluded, such as education, health, child care services and certain types of food.
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