![]() "There is no doubt that the 15 per cent tax contributions to a super fund compares favourably with a 34.5 per cent marginal rate and even more so when the equivalent rate hits 39 per cent," Bembrick says. Instead of paying their marginal tax rate they pay 15 per cent and their assessable income is reduced. Provided there is an arrangement in place with an employer, taxpayers can have their pre-tax salary paid into their super. "Salary sacrificing is the main strategy available to people wanting to avoid bracket creep, and it is the one that works," says Hutchinson. "This makes the top marginal rate 49 per cent, giving a 10 per cent hike in the marginal tax rate, so beyond $180,000 the employee loses almost half of every extra dollar earned, which certainly limits the incentive to work extra hard," notes HLB Mann Judd Sydney taxation services partner Peter Bembrick. Not only does the marginal tax rate rise to 47 per cent, including the 2 per cent Medicare levy, but for the next two years there is also the extra 2 per cent budget repair levy that was part of the 2014 budget. The picture is even less pretty for the thousands of individuals who will pushed into the top tax bracket, which kicks in at $180,000. How much tax are you really paying? Erin Jonasson As a result, the average worker will be slugged an extra $1200 in tax a year, and the average income tax rate will rise from 21.7 per cent to 27.4 per cent over the next decade. The failure to reset tax brackets will push the average full-time worker, earning $78,000 a year, into the second-highest tax bracket in 2015-16, with any earnings over $80,000 subject to a 37 per cent tax rate, 39 per cent including the Medicare levy. ![]() Hundreds of thousands of Australian workers will find themselves in higher tax brackets after this week's federal budget left tax brackets unchanged.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |