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Question

Kim had a taxable income of $381 459 and paid $84 639 in PAYG tax. Which of the following is Kim's tax debt? Select A,B,C or D.

A) $69 739.44        B) $64 017.10         C) $64 017.55        D) $148 656.55


The answer is A. But i dont know how it came about?

The tax bracket is $58 000 plus 45c for each dollar over $180 000 and the medicare Levy is 1.5% of whole taxable income, if that is even needed to answer th question?

Sorry if I confused you I just really need some help with this :/

Thanks :D

? · Accepted Answer

Tax comes from three constituent parts:
1) Medicare Levy is 1.5% of the whole taxable income:
(1.5/100) x $381,459 = $5,721.89

2) Tax bracket of $58,000. 

3) 45c for each dollar over $180,000.
This means $381,359 - $180,000 = $201,459 is taxed at 45c each dollar.
0.45 x $201,459 = $90,656,55

Add these up: $5,721.89 + $58,000 + $90,656,55 = $154,378.44
But Kim's already paid $84 639 so she still had to pay  $154,378.44 - $84 639 =  $69 739.44,
which is A.

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