Tax Facts

We thought the following information on various tax issues would be useful to you.
Personal circumstances always vary, so please ensure you contact us for specific advice.

Income Tax

Income tax is levied on taxable income, which is calculated as assessable income less allowable deductions. Gross tax on taxable income is reduced by tax offsets and credits, to arrive at net tax payable or refundable.

Individuals

The Australian Taxation Office (ATO) publishes lists of assessable income, allowable deductions and tax offsets for individuals. Sole traders declare business income in their individual income tax return, they are not required to complete a separate return for their business. Tax on individuals is charged at marginal rates. You can use the tax tables to determine how much you are taxed.

Resident tax rates 2022-23 and 2023-24

Taxable income	Tax on this income
$0 - $18,200	$0
$18,201 - $45,000	19c for each $1 over $18,200
$45,001 - $120,000	$5,092 plus 32.5c for each $1 over $45,000
$120,001 - $180,000	$29,467 plus 37c for each $1 over $120,000
$180,001 and over	$51,667 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.

Non-resident tax rates 2022-23 and 2023-24

Taxable income	Tax on this income
$0 - $120,000	32.5c for each $1
$120,001 - $180,000	$39,000 plus 37c for each $1 over $120,000
$180,001 and over	$61,200 plus 45c for each $1 over $180,000

MORE: Special rates apply to children and working holiday makers. See the ATO web site for more information on Individual Income Tax Rates.

A company is a distinct legal entity with its own income tax liability, and is required to lodge a Company income tax return. For base rate entities the company tax rate is 25%; for most other companies, the company tax rate is 30%. Special rates apply to certain types of companies, or companies in certain industries.

A partnership carrying on a business must complete a Partnership tax return to show all income earned and deductions claimed for the income year, and how the net income or loss was shared between the partners. The partnership itself is not a taxable entity. Rather, each partner includes a share of the partnership's net income or loss in the partner's taxable income.

Partnerships where the only income is from joint investments (for example, jointly owned shares or rental properties) are not required to lodge a Partnership income tax return. Rather, each partner's share of the joint income is declared in the partner's own tax return.

Where a resident beneficiary (not under a legal disability) is presently entitled to a share of net income of a trust, the trustee is generally not taxable. Rather, each such beneficiary includes a share of the trust's net income in the beneficiary's taxable income. A trust cannot distribute a net loss to the beneficiaries, the loss is carried forward to offset against net income in later years.

Where a presently entitled beneficiary is under a legal disability (for example, under 18 years of age, or incapable of managing his/her own affairs) or is a non-resident, the trustee is taxable on the beneficiary's share of the trust's net income. The tax rates correspond to the tax rates that would otherwise be payable by the beneficiary.

Where no beneficiary is presently entitled to part of the trust's net income, the trustee is taxable. The tax rates depend on the trust's particular circumstances, for example income of deceased estates attracts a different tax rate depending on the stage of administration of the estate.

A superannuation fund is a distinct legal entity with its own income tax liability and is required to lodge an income tax return. Different income tax return forms are used by self-managed superannuation funds and other superannuation funds. The superannuation fund tax rate is generally 15%. Higher rates apply to net non-arm's length income, and contributions by or on behalf of a member who has not quoted his/her tax file number to the trustee.

Rates and Calculators

The Australian Taxation Office (ATO) provides a variety of rate tables, tax calculators, and other tools on many topics, including the following:

Capital gains tax
Fringe benefits tax
Fuel tax credits
Goods and services tax
Income tax, including Medicare levy
PAYG withholding
Superannuation
Residency
Certain expenses

MORE: To access these tools, navigate to the Calculators & Tools section of the ATO web site.

Single Touch Payroll

Single Touch Payroll(STP) is a reporting framework for employers to provide payroll information to the ATO. It is embedded in most payroll software programs and allows for reporting of the following obligations:

Salary and wages, including foreign employment income
Payments under labour mobility programs, labour hire arrangements and CDEP scheme
Termination payments (including ETPs, lump sum payments for unused leave, redundancy, and early retirement amounts)
Paid parental leave and dad and partner pay
Reportable superannuation contributions and reportable fringe benefits can be reported using STP
Salary sacrificed amounts
Superannuation liability
Tax offset amounts
Foreign tax paid
Voluntary agreements

For most employers, the STP report is required at or before the time the payment is made or the date the PAYG withholding is required. Use of STP allows employees to see their year-to-date salary and superannuation data via myGov (when linked to the ATO).

STP data is also shared with Services Australia and other Government agencies.

Superannuation Guarantee

In addition to employees’ salaries and wages, employers are required to pay superannuation contributions on behalf of all eligible employees. This compulsory contribution is called the superannuation guarantee. The definition of employee for this purpose includes certain contractors. The minimum contribution is calculated with reference to each eligible employee’s earnings base (usually their ordinary time earnings) and must be paid within 28 days after the end of each calendar quarter, although it is proposed to bring this forward to the time the employee’s salary is paid. There is no minimum earnings amount, although there is a maximum amount to ensure that excess contributions are not made. Employers must also provide employees with a choice of superannuation fund.

The minimum contribution rate is 11% from 1 July 2023 and will continue to increase by 0.5% each financial year until it reaches 12% from 1 July 2025.

Employers are generally required to pay superannuation contributions for employees if they are:

If an employer fails to make the minimum contributions for a quarter by the due date, the employer is liable for the Superannuation Guarantee Charge (SGC). The SGC comprises the unpaid contributions calculated on a higher earnings base, plus an interest charge (which is credited to the employee’s superannuation account) and an administration fee. The employer cannot claim an income tax deduction for the SGC.

The Australian Taxation Office (ATO) provides the following tools/guidelines to help you understand and meet your obligations:

Superannuation Guarantee Charge (SGC) statement and calculator - calculate the SGC liability and prepare the SGC statement
How to work it out: employee or contractor - determine whether new or existing workers are contractors or employees (for tax and super purposes)
Superannuation guarantee eligibility decision tool - see whether an employer needs to make super contributions for employees
Superannuation guarantee contributions calculator - calculate how much superannuation an employee should be contributing for eligible workers