2017 Tax Rates

Resident Individuals

The following rates apply to individuals who are residents of Australia for tax purposes for the entire income year.

 

Taxable Income1$	Tax Payable
0 – 18,200	Nil tax payable
18,201 – 37,000	19c for each $1 over $18,200
37,001 – 80,000	$3,572 + 32.5c for each $1 over $37,500
80,001 – 180,000	$19,822 + 37c for each $1 over $80,000
180,001+	$54,232 + 47c for each $1 over $180,000

• The tax-free threshold may effectively be higher for taxpayers eligible for the low-income tax offset, the Seniors and Pensioners Tax Offset and/or certain other tax
• The above rates do not include the Medicare Levy (2% from 1 July 2014, previously 1.5%).
• As part of the 2015/16 Federal Budget, the government announced that, with effect from 1 July 2015, individual taxpayers with business income from an unincorporated business that has an aggregate annual turnover of less than $2 million will be eligible for a small business tax The discount will be 5% of the income tax payable on the business income received from an unincorporated small business entity. The discount will be capped at $1,000 per individual for each income year and will be delivered as a tax offset.
• This rate includes the 2% ‘Temporary Budget Repair Levy’ which applies from 1 July 2014 until 30 June 2017 on that part of a person’s taxable income that exceeds $180,000.

 

Non-resident Individuals

The following rates apply to individuals who are not residents of Australia for tax purposes for the entire income year:

 

Taxable Income$	Tax Payable
0 – 80,000	32.5% of the entire amount
80,001 – 180,000	$26,000 + 37c for each $1 over $80,000
180,001+	$63,000 + 47c for each $1 over $180,000

 

• Medicare Levy is not payable by non-residents.
• As part of the 2015/16 Federal Budget, the government announced that, with effect from 1 July 2015, individual taxpayers with business income from an unincorporated business that has an aggregate annual turnover of less than $2 million will be eligible for a small business tax The discount will be 5% of the income tax payable on the business income received from an unincorporated small business entity. The discount will be capped at $1,000 per individual for each income year and will be delivered as a tax offset. At the time of writing, no information was available regarding if and how this proposal applies to non-resident individuals.
• This rate includes the 2% ‘Temporary Budget Repair Levy’ which applies from 1 July 2014 until 30 June 2017 on that part of a person’s taxable income that exceeds $180,000.

Resident Minors – Unearned (Division 6AA) Income

The following rates apply to the income of certain minors (e.g., persons under 18 years of age on the last day of the income year who are not classed as being in a full-time occupation) that is not excepted income (e.g.,  employment income):

 

Division 6AA Income$	Tax Payable
0 – 416	Nil
417 – 1,307	68% of excess over $416
1,308+	47% of the entire amount

• The 2% Medicare levy is not included but may
• Resident minors are not entitled to the low-income tax offset in respect of ‘unearned’
• The effect of the 2% ‘Temporary Budget Repair Levy’ which applies from 1 July 2014 until 30 June 2017 has been included in the above

Non-resident Minors – Unearned (Division 6AA) Income

The following rates apply to the income of certain non-resident minors (e.g., non-resident persons under 18 years of age on the last day of the income year who are not classed as being in a full-time occupation) that is not excepted income (e.g., employment   income):

 

Division 6AA Income$	Tax Payable1,2
0 – 416	34.5% of the entire amount
417 – 663	$143.52 + 68% of excess over $416
664+	47% of the entire amount

• The Medicare Levy is not payable by non-residents.
• The effect of the 2% ‘Temporary Budget Repair Levy’ which applies from 1 July 2014 until 30 June 2017 has been included in the above

If you’re a resident for part of the year

Your tax-free threshold is less than $18,200 in a financial year if you:

• entered with the intention to reside in Australia during the year
• left Australia with the intention to reside overseas during the year.

If you’re a non-resident you’re not entitled to the tax-free threshold. This means you pay tax on every dollar of income you earn in Australia.

If you were a resident for part of the year, you have a tax-free threshold of at least $13,464. The remaining $4,736 of the full tax-free threshold is pro-rated according to the number of months you were a resident:

Genuine Redundancy Payments

The tax-free amount of a genuine redundancy payment in 2014/15 is $9,514 plus $4,758 for each completed year of service.

S.99 Assessment – Resident Deceased Estate

The following rates apply where a trustee is assessed under S.99 of the ITAA 1936 in respect of a resident deceased estate. Where the date of death is less than 3 years before the end of the income year, the trustee is assessed as a resident  individual.

 

 

 

 

Taxable Income$	Rate1%
Less than 3 years since  death
0 – 18,200	Nil
18,201 – 37,000	19% of excess over $18,200
37,001 – 80,000	$3,572 + 32.5% of excess over $37,000
80,001 – 180,000	$17,547 + 37% of excess over $80,000
180,001+	$54,547 + 47%2  of excess over $180,000
3 years or more since  death
0 – 416	Nil
417 – 670	50% of excess over  $416
671 – 37,000	$127.30 + 19% of excess over  $670
37,001 – 80,000	$7,030 + 32.5% of excess over  $37,000
80,001 – 180,000	$21,005 + 37% of excess over  $80,000
180,001+	$58,005 + 47%2  of excess over  $180,000

• Medicare Levy does not apply to S.99 assessments of deceased estate
• This rate includes the 2% ‘Temporary Budget Repair Levy’ which applies from 1 July 2014 until 30 June 2017 to the extent taxable income exceeds $180,000.

Medicare Levy – 2016/17

 

Taxpayer	Rate%
2017	2% of taxable income

  

Medicare levy low-income thresholds

The Government has announced the annual increase in the Medicare levy for low-income thresholds for singles, families, seniors, and pensioners.

The increases take account of movements in the Consumer Price Index (CPI) so that low-income taxpayers generally continue to be exempted from paying the Medicare levy.

The increases are outlined below.

Title	Current	New
Singles	$21,335	$21,655
Family	$36,001 plus $3,306 per dependent child or student	$36,541 plus $3,356 per dependent child or student
Single – seniors and pensioners (eligible for SAPTO)	$33,738	$34,244
Family – senior and pensioners	$46,966 plus $33,06 per dependent child or student	$47,670 plus $3,356 per dependent child or student

 

Medicare Levy Surcharge – 2016/17

The Medicare Levy Surcharge (MLS) is levied on payers of Australian tax who do not have private hospital cover and who earn above a certain income. The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system to reduce the demand on the public Medicare system.

The surcharge covers you and your dependents.  Your dependents include your spouse, any of your children who are under 21 years of age, or any of your student children who are under 25 years of age. For more information about who is considered a dependant for MLS purposes, you can refer to the ATO’s Medicare Levy Surcharge page.

The surcharge is calculated at the rate of 1% to 1.5% of your income for Medicare Levy Surcharge purposes. It is in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers. To work out your annual income for MLS and Rebate purposes, you can refer to the Australian Taxation Office’s Private Health Insurance Rebate Calculator or contact the ATO directly.

The rebate and surcharge levels applicable from 1 April 2017 to 31 March 2018* are:

Singles Families	≤$90,000 ≤$180,000	$90,001-105,000 $180,001-210,000	$105,001-140,000 $210,001-280,000	≥$140,001 ≥$280,001
Rebate
	Base Tier	Tier 1	Tier 2	Tier 3
< age 65	25.934%	17.289%	8.644%	0%
Age 65-69	30.256%	21.612%	12.966%	0%
Age 70+	34.579%	25.934%	17.289%	0%
Medicare Levy Surcharge
All ages	0.0%	1.0%	1.25%	1.5%

Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

*The income thresholds are indexed and will remain the same to 30 June 2021. The Department of Health published the Rebates applicable for 1 April 2017 to 31 March 2018.

 Currently, you have to pay the surcharge if you are:

• a single person with an annual taxable income for MLS purposes greater than $88,000 in the 2013-14 financial year or $90,000 in the 2014-15, 2015-16 or 2016-17 financial years; or
• a family or couple with a combined taxable income for MLS purposes greater than $176,000 in the 2013-14 financial year or $180,000 in the 2014-15, 2015-16 or 2016-17 financial years. The family income threshold increases by $1,500 for each dependent child after the first;
• and do not have an approved hospital cover with a registered health fund.

You must also pay the surcharge if you are a prescribed person with a taxable income over the threshold, and have any dependents who are not prescribed persons and who are not covered by an approved health cover policy as described above.

This means if you are a family, have a combined income of more than $180,000 in 2016-17, and don’t have hospital cover for you, your partner, and your children, you will pay the MLS.

You must meet one of the following requirements to avoid the Medicare Levy Surcharge:

• your taxable income for MLS purposes is below the income threshold (see above),
• your taxable income for MLS purposes is over the income threshold and you have hospital insurance (see below) for you and all of your dependents with a registered health fund, with a total yearly front-end deductible or excess no greater than $500 for singles or $1,000 for families/couples,
• you are normally exempt from the Medicare levy because you are a prescribed person and you do not have any dependents. Your  income level is not considered in this case,
• you are a high-income earner who had already purchased a hospital insurance product with a total yearly front-end deductible or excess greater than $500 for singles or $1,000 for families/couples, on or before 24 May 2000. In this case you will continue to be exempt from the surcharge as long as you maintain continuous membership under the same hospital treatment policy.

To be exempt from the surcharge, your hospital cover must be held with a registered health fund and cover some or all of the fees and charges for a stay in hospital, with a maximum payable excess per year that is no greater than $500 for singles or $1,000 for couples/families (i.e. if multiple hospital claims are made in a single year, the excess paid by you cannot exceed $500/$1000).

General treatment cover without hospital cover will not provide an exemption; and Overseas Visitors Cover, Overseas Student Health Cover or cover held with an international insurer will not provide an exemption. If you hold appropriate hospital cover but  temporarily suspend payments for that cover (for example, to travel overseas), then you are not exempt during the suspended period.

To work out your annual income for MLS and Rebate purposes, you can refer to the ATO’s Private Health Insurance Rebate Calculator or contact the ATO directly.

 

HELP Repayment Thresholds – 2016/17

The Higher Education Loan Programme (‘HELP’) offers Commonwealth loans to eligible students to assist them with paying their higher education fees and to study overseas. A HELP debt is repaid through the taxation system, based on a taxpayer’s HELP ‘repayment income’. HELP repayment income is the sum of the taxpayer’s:

• taxable income;
• total net investment loss;
• reportable fringe benefits;
• exempt foreign employment income; and
• reportable superannuation

HELP Repayment Income Thresholds and  Rates

 

 

Repayment Income (RI*)	Repayment Rate
Below $54,869	Nil
$54,869 – $61,119	4.0%
$61,120 – $67,368	4.5%
$67,369 – $70,909	5.0%
$70,910 – $76,222	5.5%
$76,223 – $82,550	6.0%
$82,551 – $86,894	6.5%
$86,895 – $95,626	7.0%
$95,627 – $101,899	7.5%
$101,900 and above	8.0%

From 1 July 2018, a new lower income repayment threshold of $42,000 will be introduced with a repayment rate of 1%, and additional higher threshold bands increasing to a top 10% repayment rate on income over $119,182.

Company Rates of Tax – 2016/17

The following rates of tax apply to companies for the 2016–17 income year.

Companies

2016–17 tax rates – Companies (see note 1)

Income category	Rate (%)
Small business entities (See Small business company tax rate)	27.5
Otherwise	30

Note 1: This includes corporate limited partnerships, strata title bodies corporate, trustees of corporate unit trusts and public trading trusts.

Super contributions caps for the 2017/2018 year

 

 

Non-concessional Contributions Caps

Non-concessional contributions include personal contributions for which taxpayers do not claim an income tax deduction. A person is liable to pay excess contributions tax if their non-concessional contributions exceed the cap.

For 2016/2017 year: The $180,000 after-tax cap, and the 3-year $540,000 bring-forward cap applied until 30 June 2017.

Generally speaking, non-concessional contributions are voluntary contributions not claimed as an income tax deduction by you, or your employer.

The non-concessional (after-tax) contributions cap for the 2017/2018 year is $100,000. The non-concessional contributions cap was $180,000 for the 2016/2017 year, and for the 2015/2016 year, and for the 2014/2015 year.

Government Co-contribution Table for Low Income Employees

The superannuation co-contribution was initially introduced by the Government from 1 July 2003 as an incentive to encourage low income earners to save for their own retirement.

If an individual’s satisfies the income test for the co-contribution, and they make personal (non-concessional) superannuation contributions, the Government will match their contribution with a ‘co-contribution’.

How much will I get?

How much you’ll receive depends on your income. For every dollar you contribute from your after-tax income, the Government will put in 50 cents, up to a maximum of $500. Use the table below:

Your total income*	Co-contribution available	Your contribution
$36,813 or less	$500	$1,000
$42,813	$300	$600
$48,813	$100	$200
$51,831 or more	$0

Superannuation Spouse Contribution Tax Offset

The tax offset applies to contributions made by a taxpayer to a Complying Superannuation Fund or Retirement Savings Account in respect of their low-income earning, or non-working, spouse (married or de facto). The amount of the offset is as  follows:

 

Spouse’s Assessable Income (AI)1$	Maximum Rebatable Contributions (MRC)$	Maximum Offset Amount2$
0 – 10,800	$3,000	$540
10,801 – 13,799	$3,000 – [AI – $10,800]	MRC x 18%
13,800+	Nil	Nil

• Including reportable fringe benefits and reportable employer superannuation contributions.
• The offset is calculated as 18% of the actual contributions if this results in a lower

Superannuation Guarantee Rate

Employers who provide less than a prescribed level of superannuation support (the ‘charge percentage’, generally applied to the employee’s ordinary time earnings) for their employees are liable to pay a superannuation guarantee charge based on the shortfall (calculated with reference to ‘salary and wages’) plus an interest component and an administration  charge.

 

Income Year	Charge Percentage (%)
2016/17	9.5
2017/18	9.5

1    From 1 July 2013, the SG age limit no longer applies.

 

Per Kilometre Claims for Car Deductions

The 2016/17 cents per kilometre (km) rates for car deductions (up to a maximum of 5,000 business kms per car), based on engine capacity, are as  follows:

 

Engine Capacity (cc)		Rate per Km1
Ordinary Car	Rotary Engine Car	2016/17
0 – 1,600	0 – 800	0.66
1,601 – 2,600	801 – 1,300	0.66
2,601+	1,301+	0.66

1 Note that, as part of the 2015/16 Federal Budget, the government announced that from the 2016 income year, the three current ‘cents per km’ rates will be replaced with one rate set (initially) at 66 cents per km for all cars. The Commissioner will be responsible for updating the rate in following years.

Goods Taken from Stock for Private Use

 

Type of Business	2016/17
	Adult/Child   Over 16 years$	Child   4-16 years$
Bakery	1,350	675
Butcher	800	400
Restaurant/cafe  (licensed)	4,640	1,750
Restaurant/cafe (unlicensed)	3,500	1,750
Caterer	3,790	1,895
Delicatessen	3,500	1,750
Fruiterer/greengrocer	790	395
Take–away food shop	3,430	1,715
Mixed business (e.g., milk bar, convenience  store)	4,260	2,130

• These amounts are taken from TD 2017/9 which is the current determination and which applies for the 2016/17 income
• Amounts are GST-exclusive.

Income-producing Building Write-off Rates

 

Use of Building	Capital Works Commenced	Write-off Rate%
Non-residential buildings
Industrial	27/2/1992+1	4
Non-industrial buildings	20/7/1982 – 21/8/1984	2.5
	22/8/1984 – 15/9/1987	4.0
	16/9/1987+	2.5
Research & Development buildings	21/11/1987+	2.5
Residential buildings
Short-term traveller accommodation	22/8/1979 – 21/8/1984	2.5
	22/8/1984 – 15/9/1987	4.0
	16/9/1987 – 26/2/1992	2.5
	27/2/1992+	4.0
Residential income-producing buildings	18/7/1985 – 15/9/1987	4.0
	16/9/1987+	2.5
Structural improvements	27/2/1992+	2.5
Environment protection earthworks	19/8/1992+	2.5

1 For an industrial building constructed before 27 February 1992, the rates for non-industrial non-residential buildings are applied.

Fringe Benefits Tax – 2016 & 2015

 

FBT is imposed on the grossed-up taxable value of the benefits provided.  The FBT rate  is as follows:

Fringe Benefits Tax is applied annually on the calculated grossed up net value of benefits provided, at a rate equivalent to the top marginal rate of income tax including medicare levy.

FBT Year ending	FBT rate	Type 1 Gross-up Rate	Type 2 Gross-up Rate
31 March 2018 & ongoing	47%	2.0802	1.8868
31 March 2017	49%	2.1463	1.9608
31 March 2016	49%	2.1463	1.9608
31 March 2015	47%	2.0802	1.8868
31 March 2014	46.5%	2.0647	1.8692

1 As a consequence of the introduction of the 2% ‘Temporary Budget Repair Levy’, the FBT rate has been temporarily increased to 49% for the 2016 and 2017 FBT years. This change has also affected the gross-up rates and the FBT rebate rate (which has also temporarily increased to 49% from 1 April 2015).

Car Fringe Benefits – Statutory Formula Method – Statutory  Fraction

Percentages were changed with effect from 10 May 2011 to phase in a flat rate of 20% over 4 years. Contracts which existed at that date continued to receive the benefit of the old (more generous to high distance) rates.

Annualised kilometres	Statutory Fraction
	Agreements in existence before 7.30pm 10 May 2011	Agreements entered into from 7.30pm 10 May 2011
0 – 14,999	0.26	0.20
15,000 – 24,999	0.20	0.20
25,000 – 40,000	0.11	0.20
40,001+	0.07	0.20

 

Rates for Vehicles other than Cars1

 The rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the FBT year commencing on 1 April 2017 are as follows:

2017-18 FBT Year
Engine capacity	Rate per kilometre
0 to 2500 cc	53 cents
Over 2500 cc	63 cents
Motorcycles	16 cents

Taxation Ruling MT 2034 outlines one method of valuing the right to use an employer’s motor vehicle other than a car is to multiply the number of private kilometres travelled by employees in a vehicle during a year by a cents per kilometre rate.

Schedule a meeting – Click a time & place-

[wpforms id=”11911″]