Tax payable by an ordinary individual resident taxpayer for 1998/99 is calculated as
follows:
(1) taxable income is calculated. This is assessable income (eg salaries, wages,
rents, interest, etc) less all expenditure incurred in deriving that income (eg
union dues, travel expenses, depreciation, etc), and personal deductions (eg gifts to
approved institutions, certain tax-related expenses, etc);
(2) the gross tax payable is calculated by applying the general rates of tax to
the taxable income;
(3) the net tax payable is calculated by deducting from the gross tax any offsets
: ie any rebates (eg for dependants, sole parent, housekeeper, zone allowance, low
income earner, net medical expenses and franked dividends) and any other credits
(eg for foreign taxes). Note that the sum of tax offsets allowable may not exceed the
amount of tax otherwise payable; and
(4) an amount for the Medicare levy must be added equal to 1.5% of the
taxpayer's taxable income (unless an exemption, reduction or surcharge applies).
