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, to arrive at net tax payable or refundable.

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 2016-17

Taxable income Tax on this income
$0 – $18,200 $0
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000

The temporary budget repair levy adds an additional 2% tax on that part of an individual’s income above $180,000, for the 2014-15, 2015-16 and 2016-17 income years.

Non-resident tax rates 2016-17

Taxable income Tax on this income
$0 – $80,000 32.5c for each $1
$87,001 – $180,000 $26,000 plus 37c for each $1 over $80,000
$180,001 and over $63,000 plus 45c for each $1 over $180,000

The temporary budget repair levy adds an additional 2% tax on that part of an individual’s income above $180,000, for the 2014-15, 2015-16 and 2016-17 income years.