Australian Income Tax Calculator 2014 15

How the Australian Income Tax Calculator Works

The Australian Income Tax Calculator for the 2014-15 financial year uses the official tax brackets and rates established by the Australian Taxation Office (ATO). The calculation process involves several key components:

Taxable Income Calculation

First, the calculator determines your taxable income by subtracting your tax-free threshold from your total income. The tax-free threshold for the 2014-15 year was $18,200 for individuals.

Progressive Tax Calculation

The calculator then applies the progressive tax rates to your taxable income. The tax is calculated in brackets, meaning different portions of your income are taxed at different rates.

Medicare Levy

For the 2014-15 year, the Medicare levy was 2% of your taxable income. This is added to your total tax liability.

Net Income Calculation

Finally, the calculator subtracts your total tax (income tax plus Medicare levy) from your total income to determine your net income.

2014-15 Tax Brackets and Rates

The Australian income tax rates for the 2014-15 financial year were as follows:

These rates are progressive, meaning higher income brackets are taxed at higher rates. The calculator applies these rates to your taxable income to determine your income tax liability.

Tax-Free Threshold

The tax-free threshold for the 2014-15 financial year was $18,200 for individuals. This amount is not taxed and is subtracted from your total income to determine your taxable income.

Medicare Levy

For the 2014-15 financial year, the Medicare levy was 2% of your taxable income. This levy funds the Medicare system in Australia and is in addition to your income tax liability.

The Medicare levy is calculated on your taxable income, not your total income. It is added to your income tax to determine your total tax liability.

Example Calculation

Let's walk through an example calculation to illustrate how the Australian Income Tax Calculator works. Suppose you have a total income of $50,000 for the 2014-15 financial year.

Step 1: Calculate Taxable Income

Subtract the tax-free threshold of $18,200 from your total income.

Step 2: Calculate Income Tax

Apply the progressive tax rates to your taxable income.

Step 3: Calculate Medicare Levy

Calculate the Medicare levy at 2% of your taxable income.

Step 4: Calculate Total Tax

Add the income tax and Medicare levy to get your total tax liability.

Step 5: Calculate Net Income

Subtract your total tax from your total income to determine your net income.

This example shows that with a total income of $50,000, your net income after tax and Medicare levy would be $44,817 for the 2014-15 financial year.