Total Income, Taxable Income, Tax payable on her taxable income, Medicare Levy

Question

Diana’s friend Etta has a salary of $56720. She also has an income from an investment of $4834. Etta’s super and health contributions are automatically deducted: she contributes 10.5% of her gross income to her super account and $126 per month on health insurance. She also had the following tax deductions: $80 to various charities, contributed $94.50 to her union per month, and spent $110 in total on uniform cleaning expenses. Throughout the financial year her employer deducted tax instalments amounting to $14980.60. 

Answer 1

Total annual income=$56720+$4834=$61554. I take this to be her gross income.

DEDUCTIONS:

10.5% of the gross income=$6463.17 (super account).

Monthly health insurance=$126; annual deduction: $1512.

Union dues=12×$94.50=$1134 annually.

12×$80=$960 annually (charities).

12×$110=$1320 (uniform cleaning) annually.

Annual tax instalments=$14980.60.

Total annual deductions: $26369.77.

The question doesn't ask for anything, so I assume it's her annual disposable income that's needed:

$61554-$26369.77=$35,184.23 which averages out to $2,932.02 per month.

Answer 2

Your gross income minus all available deductions is your taxable income. Compare that amount to your tax bracket to estimate the amount you'll owe before applying any available tax credits.