Thank you so much! Honestly, this should be taught in high school in Math class. Or at least having a life skills class for students to be prepared for adulthood. I’m 25 and trying to educate myself on tax and where my money goes. Thank you for the valuable info!
It definitely should be! I did an entire applied finance degree and still didn't fully understand this until after I had graduated! Thanks so much for commenting 😁
I am seeing your video now in 2022. I am from India. I absolutely love the way you explained it with such ease. You are a mastermind and phenomenal presenter. Keep up the great work brother!!
Thank you so much for this! I'm 20 and while I don't currently have to pay taxes it really frustrates me that we were never taught any of this throughout school. I went all the way through school and completed Year 12 VCE but we were never told a single speck of information about how tax works throughout all of my high school years, it's very ridiculous. This is the very first video I watched to learn about this and just your video alone gave me a much greater understanding of how it all works. And your maths examples were great, I always was extremely confused with maths and would never understand examples throughout schooling, mostly due to the teacher's not explaining things in a way that I understand, but your maths examples were also very easy to understand and I completely understood most of it. So thank you so much.
Thank you so much for shedding some light on this, you broke it down so that it was so much easier to digest. I always thought it wasn't taught in school because it was some scary complicated monster beyond understanding...
Thank you! I always try to include examples in my videos as it is the way I learn things personally. I actually just posted a new video about how to pay less tax across the year which exposes the truth about tax returns and tax deductions. I would really appreciate it if you could check it out! ruclips.net/video/Za4jtSp1MBE/видео.html 😁
I understand over over a year a tax accountant can work this out because it shows you the exact amount you have earnt in a financial year. My question i have for you is, how is tax calculated on a week to week basis. Especially when your weekly wage due to overtime can fluctuate your weekly earnings from $1200 to $2500 a week.
That's a great question! I answer this question in this video: ruclips.net/video/Za4jtSp1MBE/видео.html But here's a written answer also: If you're asking how does an employer know how much tax to take out of your payslip each pay cycle then the way it works, in most cases, is your employer will use a Pay As You Go (PAYG) software. This software will take into account things like your age, hourly rate, how much tax you have already paid this year, how many more pay cycles there after in the financial year, how much you have previously earnt, etc... and it will try to predict how much tax you will need to pay in this cycle so that the total amount of tax you have paid by the end of the financial year is correct. Obviously, this software doesn't have a crystal ball so you can't expect it to predict the future and withhold exactly the right amount of tax (this is why most people will have a tax refund each year). Another thing to note is that this software will usually try to withhold more than it needs to so that employees have a tax refund rather than a tax bill at the end of every financial year. Hope that helps!
I was looking for something like this years before as I wasn’t too clear about the taxes calculations. Although I have studied bookkeeping course but didn’t help much. That’s seriously is really cool ! A lifetime knowledge of tax return that will not fade away from our minds till we get old. You deserve great amount of views.😄
Your video was really helpful, thanks for creating and sharing. I do have a question: What are the benefits a resident gets basis the Tax they pay each year? Example: Medical, School, Pension, etc.
Thank you so much for explaining 🙏 you did such a great job in explaining it clearly. Please do more detailed video like this capital gains tax on us shares in Australia. Would really appreciate it 👍
Hey Diana! Just wanted to let you know that I did end up making that video on Capital Gains Tax (CGT) on US Shares! You can watch it here: ruclips.net/video/pMawH54O5pw/видео.html :)
Not a problem, Alisa! Videos like this are what I need to understand things too! I actually just posted a new video about how to pay less tax across the year which exposes the truth about tax returns and tax deductions. I would really appreciate it if you could check it out! ruclips.net/video/Za4jtSp1MBE/видео.html 😁
Resource channel for beginner! I must add, pay increase won’t after the marginal tax rate paid but sometimes it would impact the overall household or Centrelink benefit like childcare brackets. Would be nice if you can talk about that if in scope for your channel
Thank you. I am one of those that have an erroneous view on the tax brackets. Question please. Say I'm near the 45% and I get my salary and a $10000 bonus - what percentage of that bonus would be taxed in the 37% bracket and how much would the bonus be taxed in the 45% bracket. Thank you
Hi Connor, what about the fixed amount for each of the tax brackets? How is that calculated in your video? For example, from $5,092 for $45,001 to $120,000, $29,467 for $120,001 to $180,000 and $51,667 for each dollar over $180,000?
Those amounts are the maximum amount for the tax brackets. An example would be someone who earned $50,000 the tax for everything under $45,000 would be $5,092 ( that's 19% of $45,000 - $18,201). The ATO has tables that show these calculations. Also you can google "pay calculator Australia" & use the calculator to work out your tax.
No sure which school or state you went to school in but I'm a maths teacher and i've taught tax to my maths classes every year as it is part of the curriculum.
Sorry for the delay, we don't have a video on HELP loans unfortunately! With regards to your question, what exactly do you mean by 'tax amount shown on the ato' I would be more than happy to try and help 😁
Hey,I would like to know if we directly pay our taxes or does the company we work for reduce the amount of tax from our income already and then pay us??
Generally speaking, most employers use the Pay As You Go (PAYG) system which tries to predict how much money you will earn over the entire financial year and based on that they deduct the relevant portion from your pay each pay cycle and then they pay the ATO with that. I hope that makes sense 😁
Hey man, this is SO helpful! I just moved to Australia and was pretty overwhelmed by all of this... This already helps a ton. I have a question though if I may ask: How do I state those things on my Invoices? I am a freelancer so taxes do not get deducted from my income immediately. All of this would mean that the later a client books me, the more tax they will have to pay right..? So If I was to do a job for Client 1 and reach an income of $ 45,000 with that invoice that invoice would state an income tax of 19% whereas client 2 who comes after will have an invoice with 32.5% on it (?). And what happens if I am at 44,000 e.g. and that next client brings me to 46,000? Would I tax that job with 32.5 already? Thanks again man! Such a big help.
Amazing video, I liked and subbed. I have a question. I’m 18 and recently started working, I’m paying taxes even though I’ve not made 18,200 yet. Also, are we taxed based on the normal year or financial year?
We are glad you enjoyed the video and thanks for subscribing! There are a couple of things to keep in mind with regards to why you may be paying tax already. When you first start a job you are required to fill out a tax declaration form and if you do not select to claim the tax free threshold ($18,200) you will be taxed. The other thing is that sometimes if you appear to be earning a lot per week/fortnight/etc some payroll softwares will assume this high amount of income will continue throughout the year and if it appears that the total amount after 12 months is going to be higher than $18,200 then they will start taking out tax now so that the tax is evened out over the year. But just know, by the end of the Financial Year* if you have not earned over $18,200 and tax was taken out along the way, you will get all of the tax you paid refunded to you when you file your tax return. Hope this helps! Now, remember this isn't tax or financial advice and you should consult a professional if you do need advice :)
There’s a question that continues to plague my mind. I turned 18 during tax season last year and got taxed although I only worked casually at McDonald’s barely making an income. Starting this year I would be in the in 50,000 tax bracket. I work two jobs not claiming tax free threshold. Do I still pay the tax from last year? Is it included with this year? when does it start and end? Would I get the money back?
Generally speaking, income shouldn’t roll into the next year so whatever you earn from July 1 until June 30 the following year is your taxable income for that financial year. With regards to the financial year where you mainly worked at McDonalds and didn’t earn that much, if your total taxable income for that year was below the tax threshold then any tax that was deducted should be returned to you. To get this all sorted I would try and get access to your MyGov account, connect that to the ATO and then go through and complete your tax filings for the years you haven’t. If you need any help, I would recommend getting in contact with a Tax Accountant but rather than just having them do it, have them go through it with you so you can identify where your understanding breaks down because by the sounds of it you already know quite a lot which is a great sign!
Do I pay my tax in one payment at the end of the year, or are tax payments separated throughout the year? (e.g. in example one, will the $60,667 dollars of tax be payed in one payment at the end of the financial year?)
For most employees, their tax is taken out throughout the year by their employer and so at the end of the financial year, when they do their tax filing, if the ATO has taken too much then they get a tax refund and if the ATO hasn’t taken enough then they will have a tax bill to pay. For people who are self-employed, on the other hand, if they don’t put away tax throughout the year then they will have a one-off tax bill at the end of the financial year. Hope that makes sense 😁
Thank you for enlightening us ❤ I have 1 question, is it possible to to have a tax of $592 fortnightly when you're getting a gross pay of $1824 fortnightly? Because I personally think it's a lot 🥺
It's my pleasure Vanessa! If you're gross pay every single fortnight is $1824 and you're being taxed $592 every single fortnight then that does sound like too much! However, if your income does vary from fortnight to fortnight, it is not uncommon for some fortnights to withdraw a higher percentage in tax than the others. I explain this in more detail in this video which I would recommend you watch: ruclips.net/video/Za4jtSp1MBE/видео.html Feel free to comment again on that video if you have any other questions!
So this is very useful for understanding how it works, shouldn't higher income amounts get more tax though? I know the percentage is higher but there is a far more significant jump between the poverty line/Low income bracket and middle income bracket yet a noticibly smaller jump for the higher brakets. It would be interesting to see how the different percentages are determined or worked out for each bracket.
Hey mate , i just got a quick question? What about the amount that is shown as plus. Lets say in regards to 180000 plus that 50000 written with it? I am confused regarding that. Could you please clarify on that if thats ok?
Great question, Ashish! If you are referring to the $51,667 written next to the '$180,001 and over' bracket on the ATO's website, this is just the sum for the amount of tax one would need to pay from each of the other brackets. So, if you look at the calculations shown in my video at 7:41 and you sum together each bracket's tax bill other than the 45% one, you will get 0 + 5,092 + 24,375 + 22,200 = 51,667. The reason they have this on the ATO's website is so that instead of having to do all of the calculations yourself, you can just find 45% of the income above $180,000 and then add $51,667 to calculate your tax bill. Hope that makes sense! Please don't hesitate to ask if you have any other questions 😁
How do you calculate taxes on payments that are only commission payments? The situation is that between 2 fortnightly payments, I will get paid a commission only pay, so I am struggling calculating the taxes on that particular pay. Thanks.
Great question! Just to confirm, these commission only payments you receive are not already taxed by your employer? So you are wanting to know how much you need to put aside so that you have enough to cover your tax bill at the end of the financial year? Is that what you are asking?
I am employees in one of the company and my employer pay me fortnightly after deducting tax. During tax return do I need to pay tax again as my employer already deducted my tax before they pay me and it's my second year of tax return and is there any difference whether it's 1st year or 2nd year???
Thanks so much for commenting Nisha! Whether you have a tax bill or a tax refund at the end of each financial year, really depends on how the company you work for handles their tax withholding. Basically, no one knows exactly how much you will owe in tax until the financial year has come to an end so the best your company can do is try to predict how much tax you will need to pay and then they withhold that amount for you. Hopefully that makes sense! If you are still confused you can try speaking to the accounting department at your work or directly to an accountant 😁
Are you able to break it down to weekly or fortnightly payments please. For instance I get payed fortnights my last pay I earnt $2159.82 gross $387tx $1781.82net. But next tomorrow in looking at $3500.00 gross for 96 hrs for the fortnight how much tax would I have to pay? Please Next fortnight be back to 40 hrs only been working 2-3 months. Also ticked the tax free threshold. But still having to pay tax at the moment.
Thanks so much for commenting, Rebecca! Unfortunately, it can't really be broken down into a shorter timeframe because the amount that is taken out on a weekly/fortnightly/monthly basis really depends on the withholding levels and the accounting/payroll software your employers uses. Not to mention, the amount you earn will change things every pay cycle! Basically, for workers with inconsistent income, no one knows exactly how much they will owe in tax until the financial year has come to an end so the best an employer can do is try to predict how much tax the worker will need to pay and then they withhold a relatively even amount from each pay check. With regards to the tax free threshold, if you appear to be earning a lot per week/fortnight/etc some payroll softwares will assume this high amount of income will continue throughout the year and if it appears that your total income after 12 months is going to be higher than $18,200 then they will start withholding tax now so that the tax is evened out over the year. Hopefully that makes sense! If you are still confused you can try speaking to the accounting department at your work or directly to an accountant 😁
amazing. do you think it's silly to have multiple jobs (3 for example) that puts you in a "higher tax bracket". will I still be losing or will it be the same as per your explanation from 05:07 :) thank you
Amazing video! I plan to weaponise it against people who claim their taxes all go to “doll bludgers”. This video is very easy to follow. Hence when I hear a true blue say “my hard earned dollaridoos!” I will get them to see this. The goal being instead of breaking down how much of each true blues percentage of tax actually goes towards social spending. I can just say let’s take baby steps watch this video and effectively ease them into their idiocy. Once you start crunching your own numbers you can crunch others right?
How we can pay this tax? I mean, we need to pay tax once in a year or tax will be diducted automatically from our weekly or monthly salary ? Bcz we receive weekly income after some diduction.... Please clear this confusion 😊
Wondering about the amount you have to add to the tax brackets? eg. Top tax bracket. $51667 plus 45 cents. You didnt add the 51K to the taxable amount. Can you explain if you need to add those amounts? TIA
Thank you for breaking this down. I honestly have a hard time understanding how tax works. Would you be willing to write a book using the same crystal clear diagrams explaining it all? I wonder just how many Aussies really know how it all works and how much the ATO doesn't want us to know.
Not a problem! I too found it very difficult to get my head around until recently (and I completely an applied finance degree)! hahah maybe one day! Hopefully, this video will do for now :)
Tax is voluntary. It states on your notice of assessment from the ATO "Thanks for your contribution. On the form they actually ask if you will pay tax in the future. At the end of the day Accounts are government contractors working for the "good" of the government, much the same as lawyers employees of and working for the intrest of the government. Can you do a video that defines "personal income". This is what you should be looking.
Good question..you need to know exactly where your money goes through tax..so you can break it down and see whether noone in your workplace is trying to steal your money..I aso think of that if there is an equations in Medicare like this explanations so you can figure it out..whether your employer is been honest with your money✌🏾
At the end of the financial year, the calculation will be done in the same way by having your taxable income be the sum of all of your income and then that number will be put into the guide shown in the video. Hope that makes sense 😁
Hello, Suppose I earned 120k and I bought a 30K car, spent another 30k( rent, shopping, and other expenditures)on which I paid custom taxes, and GST. Now I have 60k, Do I have to pay taxes on my 60k or entire income?
Thanks for commenting and great question! It all depends on whether the expenses directly relate to earning that 120k. If none of them did, then the individual would have a taxable income of 120k but if 10k was spend on things directly related to earning that income then the taxable income would be 110k. I recently made a follow-up video that goes through this in more detail, check it out here: ruclips.net/video/Za4jtSp1MBE/видео.html
Just trying to settle something with a mate, he thinks he'll get ALL his tax back from working. Last financial year he earned around 4k, which was taxed, and yes he got all of that back as you would expect (only just started work and under 18k) But now he believes that he will continue to get it all back, his projected earnings for this financial year exceed 18k and therefore the tax that they take is not going to be returned, correct? Lets say he earns 20k, the taxable amount is then $342, and lets assume he claims no expenses on tax and the employer is accurately withholding tax. Come tax time he gets nothing, right?
hahaha love this! Hypothetically, having earned $20,000 over the financial year, having $342 withheld and having claimed no deductions or any other schemes, he would not be receiving a tax refund. Thanks for commenting, Riley!
The title of this video..is clickbait and misleading. BUT helpful for alot.. Australian tax rules are rediculus and completely unfair...so many loopholes..its set up for property investors and people who dont work!
![I.N "HALLUCINATION" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/n5B5q1Hwt_U/mqdefault.jpg)
![Superannuation Tax Changes at Age 60: What You Need To Know [Australia]](/img/1.gif)
Thank you so much! Honestly, this should be taught in high school in Math class. Or at least having a life skills class for students to be prepared for adulthood. I’m 25 and trying to educate myself on tax and where my money goes. Thank you for the valuable info!
It definitely should be! I did an entire applied finance degree and still didn't fully understand this until after I had graduated! Thanks so much for commenting 😁
I'm not the greatest person when it comes to numbers but, you have got me interested in learning more about how tax is done. Thanx.
That is amazing, Vanz!! I am so glad I was able to pique your interest 😁
This is exellent coverage.
I retired 11 years ago but never fully understood your coverage.
Thankyou
I am seeing your video now in 2022. I am from India. I absolutely love the way you explained it with such ease. You are a mastermind and phenomenal presenter. Keep up the great work brother!!
Thanks so much for the kind words my friend! It is so nice to read comments like this 😁
Great vid! Good to see this kind of straight-forward info for Australians
Thank you for the kind words! I hope you found it valuable :)
Thank you so much for this! I'm 20 and while I don't currently have to pay taxes it really frustrates me that we were never taught any of this throughout school. I went all the way through school and completed Year 12 VCE but we were never told a single speck of information about how tax works throughout all of my high school years, it's very ridiculous. This is the very first video I watched to learn about this and just your video alone gave me a much greater understanding of how it all works. And your maths examples were great, I always was extremely confused with maths and would never understand examples throughout schooling, mostly due to the teacher's not explaining things in a way that I understand, but your maths examples were also very easy to understand and I completely understood most of it. So thank you so much.
Thank you so much for shedding some light on this, you broke it down so that it was so much easier to digest. I always thought it wasn't taught in school because it was some scary complicated monster beyond understanding...
It was my pleasure, Eden! I am so glad you found the video helpful 😁
I really like how you pull up life examples to explain this. Love to see more financial content like this to help businesses.
Thank you! I always try to include examples in my videos as it is the way I learn things personally. I actually just posted a new video about how to pay less tax across the year which exposes the truth about tax returns and tax deductions. I would really appreciate it if you could check it out! ruclips.net/video/Za4jtSp1MBE/видео.html 😁
Good stuff 👍, concise and straight to the point. Thank you for not fluffing around!
This is such a great video. Thanks for the examples.
I understand over over a year a tax accountant can work this out because it shows you the exact amount you have earnt in a financial year.
My question i have for you is, how is tax calculated on a week to week basis. Especially when your weekly wage due to overtime can fluctuate your weekly earnings from $1200 to $2500 a week.
That's a great question! I answer this question in this video: ruclips.net/video/Za4jtSp1MBE/видео.html But here's a written answer also:
If you're asking how does an employer know how much tax to take out of your payslip each pay cycle then the way it works, in most cases, is your employer will use a Pay As You Go (PAYG) software. This software will take into account things like your age, hourly rate, how much tax you have already paid this year, how many more pay cycles there after in the financial year, how much you have previously earnt, etc... and it will try to predict how much tax you will need to pay in this cycle so that the total amount of tax you have paid by the end of the financial year is correct.
Obviously, this software doesn't have a crystal ball so you can't expect it to predict the future and withhold exactly the right amount of tax (this is why most people will have a tax refund each year). Another thing to note is that this software will usually try to withhold more than it needs to so that employees have a tax refund rather than a tax bill at the end of every financial year.
Hope that helps!
Thank you man, they don’t teach this in schools and it’s a big let down, you guys are out here doing your part, keep it up 💪🤟
I was looking for something like this years before as I wasn’t too clear about the taxes calculations. Although I have studied bookkeeping course but didn’t help much. That’s seriously is really cool ! A lifetime knowledge of tax return that will not fade away from our minds till we get old. You deserve great amount of views.😄
Great video, please keep them coming.
I definitely did not "gently tap" the like button, I ferociously smashed it
You're too kind, my friend!
I also made a mistake in the calculation and the money seemed too much to me, now I understand... Nice video
I love examples and more graphics pleaseee, Tax is already boring, add some to make it more interesting.
Your video is so useful tho
Thanks so much for commenting! I’m glad you found the video useful 😁
amazing work.. Great examples and great representations..Thank you.
Thank you for the kind words!
I really found this video helpful and it answered all the questions I had to ask
this should start in high school. helpful and effective, thank you
Thanks so much for this video! Easy explanation. Love it
I’m an immigrant. Thanks for explaining ❤
Your video was really helpful, thanks for creating and sharing.
I do have a question: What are the benefits a resident gets basis the Tax they pay each year? Example: Medical, School, Pension, etc.
Thank you so much for explaining 🙏 you did such a great job in explaining it clearly. Please do more detailed video like this capital gains tax on us shares in Australia. Would really appreciate it 👍
Thank you for your kind words Diana! And thank you for the video idea! I will definitely add this to our list :)
Hey Diana! Just wanted to let you know that I did end up making that video on Capital Gains Tax (CGT) on US Shares! You can watch it here: ruclips.net/video/pMawH54O5pw/видео.html :)
Top work mate, best of luck and I hope you go far.
Thanks so much, we really appreciate it!
can you do a video on fixed term deposits and it’s taxable income? I was really confused ! btw thanks for this lovely video!
This was quite useful. Thanks!
I'd be intrested in watching the Medicare levy video
So glad you found it useful! I have added a Medicare levy video to our potential video list :)
very straightforward thank you! I needed this step by step approach
Not a problem, Alisa! Videos like this are what I need to understand things too! I actually just posted a new video about how to pay less tax across the year which exposes the truth about tax returns and tax deductions. I would really appreciate it if you could check it out! ruclips.net/video/Za4jtSp1MBE/видео.html 😁
Resource channel for beginner! I must add, pay increase won’t after the marginal tax rate paid but sometimes it would impact the overall household or Centrelink benefit like childcare brackets. Would be nice if you can talk about that if in scope for your channel
Great insight! Thanks for sharing 😁
Thank you so much, this is super clear. I do two jobs, and pay heaps of tax in each fortnight, hpw can i reduce this
Great Video. Clearly understand the "Income Tax in Australia".
Thanks so much for commenting!!
Absolutely agree, should be taught in school.
Very helpful thanks
My pleasure! 😁
Thank you. I am one of those that have an erroneous view on the tax brackets.
Question please. Say I'm near the 45% and I get my salary and a $10000 bonus - what percentage of that bonus would be taxed in the 37% bracket and how much would the bonus be taxed in the 45% bracket.
Thank you
great vid, short and sweet with clear explanation
Glad you enjoyed it!
Hi Connor, what about the fixed amount for each of the tax brackets? How is that calculated in your video? For example, from $5,092 for $45,001 to $120,000, $29,467 for $120,001 to $180,000 and $51,667 for each dollar over $180,000?
Those amounts are the maximum amount for the tax brackets. An example would be someone who earned $50,000 the tax for everything under $45,000 would be $5,092 ( that's 19% of $45,000 - $18,201).
The ATO has tables that show these calculations.
Also you can google "pay calculator Australia" & use the calculator to work out your tax.
Thank you, that’s was really helpful for me!
No sure which school or state you went to school in but I'm a maths teacher and i've taught tax to my maths classes every year as it is part of the curriculum.
Do you have a video explaining hecs at all? Before you do your tax, is the hecs withholding include in the tax amount shown on the ato?
Sorry for the delay, we don't have a video on HELP loans unfortunately! With regards to your question, what exactly do you mean by 'tax amount shown on the ato' I would be more than happy to try and help 😁
Hey,I would like to know if we directly pay our taxes or does the company we work for reduce the amount of tax from our income already and then pay us??
Generally speaking, most employers use the Pay As You Go (PAYG) system which tries to predict how much money you will earn over the entire financial year and based on that they deduct the relevant portion from your pay each pay cycle and then they pay the ATO with that. I hope that makes sense 😁
Hey man, this is SO helpful! I just moved to Australia and was pretty overwhelmed by all of this...
This already helps a ton. I have a question though if I may ask: How do I state those things on my Invoices? I am a freelancer so taxes do not get deducted from my income immediately. All of this would mean that the later a client books me, the more tax they will have to pay right..? So If I was to do a job for Client 1 and reach an income of $ 45,000 with that invoice that invoice would state an income tax of 19% whereas client 2 who comes after will have an invoice with 32.5% on it (?). And what happens if I am at 44,000 e.g. and that next client brings me to 46,000? Would I tax that job with 32.5 already?
Thanks again man! Such a big help.
Thanks mate for this insight on Aussie Taxation
Amazing video, I liked and subbed. I have a question. I’m 18 and recently started working, I’m paying taxes even though I’ve not made 18,200 yet.
Also, are we taxed based on the normal year or financial year?
We are glad you enjoyed the video and thanks for subscribing!
There are a couple of things to keep in mind with regards to why you may be paying tax already. When you first start a job you are required to fill out a tax declaration form and if you do not select to claim the tax free threshold ($18,200) you will be taxed. The other thing is that sometimes if you appear to be earning a lot per week/fortnight/etc some payroll softwares will assume this high amount of income will continue throughout the year and if it appears that the total amount after 12 months is going to be higher than $18,200 then they will start taking out tax now so that the tax is evened out over the year. But just know, by the end of the Financial Year* if you have not earned over $18,200 and tax was taken out along the way, you will get all of the tax you paid refunded to you when you file your tax return. Hope this helps!
Now, remember this isn't tax or financial advice and you should consult a professional if you do need advice :)
@@ConnorandAlan that was exactly my question! Thanks! Very helpful video!
There’s a question that continues to plague my mind. I turned 18 during tax season last year and got taxed although I only worked casually at McDonald’s barely making an income. Starting this year I would be in the in 50,000 tax bracket. I work two jobs not claiming tax free threshold. Do I still pay the tax from last year? Is it included with this year? when does it start and end? Would I get the money back?
Generally speaking, income shouldn’t roll into the next year so whatever you earn from July 1 until June 30 the following year is your taxable income for that financial year. With regards to the financial year where you mainly worked at McDonalds and didn’t earn that much, if your total taxable income for that year was below the tax threshold then any tax that was deducted should be returned to you. To get this all sorted I would try and get access to your MyGov account, connect that to the ATO and then go through and complete your tax filings for the years you haven’t. If you need any help, I would recommend getting in contact with a Tax Accountant but rather than just having them do it, have them go through it with you so you can identify where your understanding breaks down because by the sounds of it you already know quite a lot which is a great sign!
What about investment property income? Same way to calculate the tax?
Thank you so much for this video! You’re a lifesaver
My pleasure! Thank you for watching and commenting!
How to calculate gross income when given net income. For example an individual earning a net income of $12000 what could be the gross pay
Do I pay my tax in one payment at the end of the year, or are tax payments separated throughout the year? (e.g. in example one, will the $60,667 dollars of tax be payed in one payment at the end of the financial year?)
For most employees, their tax is taken out throughout the year by their employer and so at the end of the financial year, when they do their tax filing, if the ATO has taken too much then they get a tax refund and if the ATO hasn’t taken enough then they will have a tax bill to pay.
For people who are self-employed, on the other hand, if they don’t put away tax throughout the year then they will have a one-off tax bill at the end of the financial year. Hope that makes sense 😁
can also use the moneysmart website from the government they have a few calculators for this and other information that is super useful
Great suggestion Mario!!
How about foreigners (residents)? Are they subject to the progressive tax rate?
I am not exactly sure but maybe try having a look at the ATO website, they should provide some more information 😁
you literally changed the picture bro. Thanks alot for the info.
Thanks for this very informative video
Thank you for enlightening us ❤ I have 1 question, is it possible to to have a tax of $592 fortnightly when you're getting a gross pay of $1824 fortnightly? Because I personally think it's a lot 🥺
It's my pleasure Vanessa! If you're gross pay every single fortnight is $1824 and you're being taxed $592 every single fortnight then that does sound like too much!
However, if your income does vary from fortnight to fortnight, it is not uncommon for some fortnights to withdraw a higher percentage in tax than the others.
I explain this in more detail in this video which I would recommend you watch: ruclips.net/video/Za4jtSp1MBE/видео.html
Feel free to comment again on that video if you have any other questions!
So this is very useful for understanding how it works, shouldn't higher income amounts get more tax though? I know the percentage is higher but there is a far more significant jump between the poverty line/Low income bracket and middle income bracket yet a noticibly smaller jump for the higher brakets. It would be interesting to see how the different percentages are determined or worked out for each bracket.
Thanks so much for commenting! I agree, it would be very interesting to see how these percentages are determined!
Thank you, it's really educational. ❤️👍
Great video. Very informative
Thank you for the kind words, Marvin! I appreciate you taking the time to comment 😁
Hey mate , i just got a quick question? What about the amount that is shown as plus. Lets say in regards to 180000 plus that 50000 written with it? I am confused regarding that. Could you please clarify on that if thats ok?
Great question, Ashish! If you are referring to the $51,667 written next to the '$180,001 and over' bracket on the ATO's website, this is just the sum for the amount of tax one would need to pay from each of the other brackets.
So, if you look at the calculations shown in my video at 7:41 and you sum together each bracket's tax bill other than the 45% one, you will get 0 + 5,092 + 24,375 + 22,200 = 51,667. The reason they have this on the ATO's website is so that instead of having to do all of the calculations yourself, you can just find 45% of the income above $180,000 and then add $51,667 to calculate your tax bill. Hope that makes sense!
Please don't hesitate to ask if you have any other questions 😁
Brooh iam from India this tax list per month or per year plsss reply
I’m doing a maths test tommrow and I have no idea what the difference between net income and taxable income is !😢
How do you calculate taxes on payments that are only commission payments? The situation is that between 2 fortnightly payments, I will get paid a commission only pay, so I am struggling calculating the taxes on that particular pay. Thanks.
Great question! Just to confirm, these commission only payments you receive are not already taxed by your employer?
So you are wanting to know how much you need to put aside so that you have enough to cover your tax bill at the end of the financial year? Is that what you are asking?
I am employees in one of the company and my employer pay me fortnightly after deducting tax. During tax return do I need to pay tax again as my employer already deducted my tax before they pay me and it's my second year of tax return and is there any difference whether it's 1st year or 2nd year???
Thanks so much for commenting Nisha! Whether you have a tax bill or a tax refund at the end of each financial year, really depends on how the company you work for handles their tax withholding. Basically, no one knows exactly how much you will owe in tax until the financial year has come to an end so the best your company can do is try to predict how much tax you will need to pay and then they withhold that amount for you. Hopefully that makes sense! If you are still confused you can try speaking to the accounting department at your work or directly to an accountant 😁
Thanks for the video, it's helpful.👍
You are very welcome! Thank you for commenting 😀
Thanks for all the info 🙂
Not a problem Dusan, it was my pleasure 😁
I heard 😈Blackrock owns 🇦🇺 Australia Tax Office ATO⁉️ Please highlight this for Australian's. ABN LOOKUP, ATO changed its entity
what is the formula of tax calculation?
How would a GST registration affect my income tax as a sole trader?
I just want to ask,, How about if the earnings is 180,001 dollars so only the 01 is taxable of 45%?
That's exactly right, Reynold! Great question by the way 😁
Good work, mate
Thanks Reji! That means a lot 😁
Are you able to break it down to weekly or fortnightly payments please.
For instance I get payed fortnights my last pay I earnt $2159.82 gross $387tx $1781.82net.
But next tomorrow in looking at $3500.00 gross for 96 hrs for the fortnight how much tax would I have to pay? Please
Next fortnight be back to 40 hrs only been working 2-3 months.
Also ticked the tax free threshold. But still having to pay tax at the moment.
Thanks so much for commenting, Rebecca! Unfortunately, it can't really be broken down into a shorter timeframe because the amount that is taken out on a weekly/fortnightly/monthly basis really depends on the withholding levels and the accounting/payroll software your employers uses. Not to mention, the amount you earn will change things every pay cycle!
Basically, for workers with inconsistent income, no one knows exactly how much they will owe in tax until the financial year has come to an end so the best an employer can do is try to predict how much tax the worker will need to pay and then they withhold a relatively even amount from each pay check.
With regards to the tax free threshold, if you appear to be earning a lot per week/fortnight/etc some payroll softwares will assume this high amount of income will continue throughout the year and if it appears that your total income after 12 months is going to be higher than $18,200 then they will start withholding tax now so that the tax is evened out over the year.
Hopefully that makes sense! If you are still confused you can try speaking to the accounting department at your work or directly to an accountant 😁
May I know what is the tax calculation for someone under 491 visa?
thank you for this video.
Of course! I am happy you found it helpful 😁
amazing. do you think it's silly to have multiple jobs (3 for example) that puts you in a "higher tax bracket". will I still be losing or will it be the same as per your explanation from 05:07 :) thank you
Very informative. Please make also sales tax and property tax as well....
I'm glad you liked it, Muhammad! I will add Sales and Property Tax to our list 😁
Just adding that for Work and Holiday visa makers (462 / 417) the rate is 15% for the first 45K
Thank you so much
My pleasure!
What about people in partnership?
Thanks for commenting but I am not exactly sure. If you are wondering because of a personal situation, i would recommend speaking to a professional 😁
Thank you@@ConnorandAlan
Amazing video! I plan to weaponise it against people who claim their taxes all go to “doll bludgers”. This video is very easy to follow. Hence when I hear a true blue say “my hard earned dollaridoos!” I will get them to see this. The goal being instead of breaking down how much of each true blues percentage of tax actually goes towards social spending. I can just say let’s take baby steps watch this video and effectively ease them into their idiocy. Once you start crunching your own numbers you can crunch others right?
hahaha that's great! Thanks so much for commenting and I am glad you are going to find so much use from my video!
Less than 3% of all tax goes to poor people. 90% is given to the rich.
How we can pay this tax?
I mean, we need to pay tax once in a year or tax will be diducted automatically from our weekly or monthly salary ?
Bcz we receive weekly income after some diduction....
Please clear this confusion 😊
Most employees will have their employer deduct tax from each payslip 😁
Wondering about the amount you have to add to the tax brackets? eg. Top tax bracket. $51667 plus 45 cents. You didnt add the 51K to the taxable amount. Can you explain if you need to add those amounts? TIA
Medicare levy - what is this and how this affect PIT?
These are great, thank you!
The pleasure is all mine! Thank you for commenting :)
@@ConnorandAlan The least I can do for all of this knowledge! I really appreciate what you are doing.
is it same for indian migrating to Australia?
Thank you for breaking this down. I honestly have a hard time understanding how tax works. Would you be willing to write a book using the same crystal clear diagrams explaining it all? I wonder just how many Aussies really know how it all works and how much the ATO doesn't want us to know.
Not a problem! I too found it very difficult to get my head around until recently (and I completely an applied finance degree)! hahah maybe one day! Hopefully, this video will do for now :)
Thanks mate
My pleasure 😁
Thanks dude
Not a problem dude
thanks mate
You're welcome!
thanks
My pleasure 😁
Perfect
Omg thank you!!!!
You’re very welcome! 😁
Tax is voluntary. It states on your notice of assessment from the ATO "Thanks for your contribution. On the form they actually ask if you will pay tax in the future. At the end of the day Accounts are government contractors working for the "good" of the government, much the same as lawyers employees of and working for the intrest of the government.
Can you do a video that defines "personal income". This is what you should be looking.
It's not voluntary.
Thanks for commenting and supporting the channel, Harun!
So what's my Medicare levi and surcharge if I had 2 dependants 12, 17yr old plus my wife?
Thanks for commenting but it would be best to ask any personal questions to a qualified tax accountant or financial professional!
Good question..you need to know exactly where your money goes through tax..so you can break it down and see whether noone in your workplace is trying to steal your money..I aso think of that if there is an equations in Medicare like this explanations so you can figure it out..whether your employer is been honest with your money✌🏾
How do I get taxed if I have more than one income?
At the end of the financial year, the calculation will be done in the same way by having your taxable income be the sum of all of your income and then that number will be put into the guide shown in the video. Hope that makes sense 😁
Hello, Suppose I earned 120k and I bought a 30K car, spent another 30k( rent, shopping, and other expenditures)on which I paid custom taxes, and GST. Now I have 60k, Do I have to pay taxes on my 60k or entire income?
Thanks for commenting and great question! It all depends on whether the expenses directly relate to earning that 120k.
If none of them did, then the individual would have a taxable income of 120k but if 10k was spend on things directly related to earning that income then the taxable income would be 110k.
I recently made a follow-up video that goes through this in more detail, check it out here: ruclips.net/video/Za4jtSp1MBE/видео.html
@@ConnorandAlan thanks 😊
Awesome
Thanks, Priyadarshan!
That was so helpful!
Can you also make a video about backpackers tax return or non-residents tax return. A lot of them here in Australia :)
Good suggestion! I will add it to our list 😁
I did my tax on MyGov, and it didn't give me the $18200 tax free threshold. Is the ATO scamming me?
Just trying to settle something with a mate, he thinks he'll get ALL his tax back from working.
Last financial year he earned around 4k, which was taxed, and yes he got all of that back as you would expect (only just started work and under 18k)
But now he believes that he will continue to get it all back, his projected earnings for this financial year exceed 18k and therefore the tax that they take is not going to be returned, correct?
Lets say he earns 20k, the taxable amount is then $342, and lets assume he claims no expenses on tax and the employer is accurately withholding tax.
Come tax time he gets nothing, right?
hahaha love this! Hypothetically, having earned $20,000 over the financial year, having $342 withheld and having claimed no deductions or any other schemes, he would not be receiving a tax refund.
Thanks for commenting, Riley!
@@ConnorandAlan thankyou! Haha
The title of this video..is clickbait and misleading. BUT helpful for alot..
Australian tax rules are rediculus and completely unfair...so many loopholes..its set up for property investors and people who dont work!
these tax rates are insane
haha! Are you not from Australia?
What about a big family which has a lot of monthly expenses? 😁 😁 😁 😁
Thanks for commenting but it would be best to ask any personal questions to a qualified tax accountant or financial professional 😁