Australian Income Tax is a system of taxation where individuals pay a portion of their earnings to the Australian government. The amount of tax paid is determined by a person's taxable income and residency status. Australia uses a progressive tax system, meaning that the tax rate increases as the taxable income increases.
The general formula for calculating Australian income tax is:
Where:
Let's calculate the income tax for an Australian resident with an annual income of $85,000:
The blue portion of the bar represents the effective tax rate (21.28%) for the given income.
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