Does anyone here remember how to calculate tax brackets (like in junior financial maths)
I'm having a mind blank at the moment and don't remember how to
Thanks
Hi There,
Tax brackets are a progressive tax (e.g income tax). i.e the tax rate increases as the taxable amount increases. To do this, find out the bracket it is from and then calculate the amount of tax that could be charged like you would normally do
Example: Income tax rates for 2016-17Taxable income ll
Tax on this income0 – $18,200 ll Nil
$18,201 – $37,000 ll 19c for each $1 over $18,200
$37,001 – $80,000 ll $3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000 ll $17,547 plus 37c for each $1 over $80,000
$180,001 and over ll $54,547 plus 45c for each $1 over $180,000
Now suppose you earn $38, 655,
Then to calculate your income tax, you are in the bracket of $37,001 – $80,000. Therefore the calculation is:
$3,572 + [0.325($38, 655 - $37,000)]
Hope this helps