Question

Taxation qs

Jay has sent through the following information. Can you pull this together with what you have examined already so we can have a tax estimate ready to go.

• Wages (Melbourne employment) - $125,000 net wages, PAYG withheld of $43,000 plus a bonus of $5,000 was paid.
• Wages (Darwin employment) - $25,000 net wages, PAYG withheld of $1,500
• Interest income $1,000
• Allowable general deductions $3,300
• Allowable specific deductions $1,000
• Jay is single with no private health insurance.
• Jay has no reportable fringe benefits or reportable superannuation contributions.

Q1 : Calculate Jay’s Medicare Levy. Show all workings

Q2: Calculate Medicare Levy Surcharge. Show all workings

Q3: Calculate Net Tax Payable. Show all workings

Answer 1

Ans:

Gross Income Include all salary, wages, bonuses and commissions you paid your payee as an employee, company director or office holder. Include the total gross amount before amounts are withheld.

1. Jay's Taxable Income:

Description		Amount
Wages (Melbourne employment)	$125000
PAYG Withheld	$43000
Bonus	$5000	$173000
Wages (darwin employment)	$25000
PAYG Withheld	$1500
Interest Income	$1000	$27500
Total Gross Income		$200500
Less: General deduction		($3300)
Less: Specific deduction		($1000)
Total Taxable Income		$196200
Less: Standard deduction in 2020		($12400)
Net Taxable Income		$183800
Medicare Levy (2% of taxable Income)	2% of $183800	$3676

2. Calculation of Medicare Levy Surcharge:

Description	Amount
Net Taxable Income (From 1)	$183800
Medicare Levy Surcharge (1.5% of $183800) see note below	$2757

Note- Medicare levy is maximum 1.5% if your taxable income is more than $140000 as in 2020.

3. Calculation of Net Tax Payable:

Description	Amount
Net Taxable Income	$183800
Tax Payable [33271.50 + (32% of ($183800-$163301)]	$39831
Less: PAYG Withholding ($43000 + $1500) see note	($44500)
Net Tax Payable/ (Refundable)	($4669)

Note: PAYG withholding is a credit against the income taxes the employee must pay during the year.