Question

Ahmed, an Australian resident, was made redundant on 30th June 2020 at the age of 58. He had been employed at the company for 14 years and 9 months. His taxation records for the year ended 30th June 2020 revealed the following:

Gross wages up to redundancy $65000 (PAYG withheld $18400)

Interest on savings account held jointly with spouse $4200

Genuine redundancy payment $93000

Lump sum received from his superannuation fund:

Taxable component (element taxed in the fund) $372000 (PAYG withheld $26000)

Ahmed has adequate private health insurance cover for the year.

Required:

For the year ended 30 June 2020, calculate Ahmed's:

a) Taxable Income

b) Net Tax Payable or Refundable

Answer 1

		Amount	Taxable Amount	Tax withheld
Gross wages upto redundancy		$    65,000.00	$           65,000.00	$    18,400.00
Interest on savings account jointly held with spouse		$      4,200.00	$             2,100.00	$                    -
Genuine redundancy payment		$    93,000.00	$                          -	$                    -
Lumpsum received from Superannuation Fund (taxed element)	$ 372,000.00	$         372,000.00	$    26,000.00
		Total	$         439,100.00	$    44,400.00
Total Tax due			$         170,692.00
Tax already deducted			$           44,400.00
Remaining to be paid			$         126,292.00
a) Taxable Income	$                 439,100.00
b) Net Tax Payable	$                 126,292.00
Working notes:
1. The tax-free limit for genuine redundacy pay is:	Base amount + (service amount × years of service)
	= $10638 + ($65000 x 14)
	= $920,638
2. Interest on joint account divided equally between joint holders.
`3.
Taxable income	Tax on this income
0 – $18,200	Nil
$18,201 – $37,000	19c for each $1 over $18,200
$37,001 – $90,000	$3,572 plus 32.5c for each $1 over $37,000
$90,001 – $180,000	$20,797 plus 37c for each $1 over $90,000
$180,001 and over	$54,097 plus 45c for each $1 over $180,000