Higher tax rates
If you are under 18, you pay the same income tax rates as an adult for all income you receive if you are an excepted person or for your excepted income.
If you aren't an excepted person, you pay the following tax rates for any income that is not excepted income.
In this section
If you are a resident
Table: Tax rates for residents who are under 18
Income
|
Tax rates for 2020–21 income year
|
$0 – $416
|
Nil
|
$417 – $1,307
|
Nil plus 66% of the excess over $416
|
Over $1,307
|
45% of the total amount of income that is not excepted income
|
If your taxable income is less than $66,667, you will get some of the low income tax offset. If your taxable income is less than $126,000, you may also get some of the low and middle income tax offset.
The amount of the offset depends on your income level and how much tax you have paid throughout the year. However, both of these income tax offsets will only reduce tax payable on excepted income.
If you are a non-resident
Table: Tax rates for non-residents who are under 18
Income
|
Tax rates for 2020–21 income year
|
$0 – $416
|
32.5% of the entire amount
|
$417 – $663
|
$135.20 plus 66% of the excess over $416
|
Over $663
|
45% of the entire amount
|
How income is taxed if you are under 18
Table: How income of a person under 18 years old is taxed
If you...
|
Then...
|
Are an excepted person
|
- your excepted net income is taxed at adult rates
- the low income tax offset and low and middle income tax offset will reduce tax payable on your excepted net income if you are eligible for the offsets
|
Only have excepted income, such as part-time employment income
|
- your excepted net income is taxed at adult rates
- the low income tax offset and low and middle income tax offset will reduce tax payable on your excepted net income if you are eligible for the offsets
|
Have some excepted income (such as part-time employment income) and some other income (such as a family trust distribution)
|
- your excepted net income is taxed at adult rates
- your other income (after taking away deductions claimed for that income) will be taxed at higher rates
- the low income tax offset and low and middle income tax offset will only reduce the tax payable on your excepted net income if you are eligible for the offsets
|
Only have other income (such as a family trust distribution)
|
- your other income (after taking away deductions claimed for that income) will be taxed at higher rates
- the low income tax offset and low and middle income tax offset will not reduce the tax payable on your income even if you are eligible for the offsets
|
Example – excepted and other income
Example: Excepted and other income
Kris is 15 years old. She is an Australian resident and has $19,200 of excepted income and $4,000 in other income in the 2021–22 income year.
The tax payable on her income is:
($19,200 − $18,200 (tax-free threshold)) × 19%
= $1,000 × 19%
= $190.
- Tax on other income, $4,000 × 45% = $1,800.
As Kris’s taxable income is less than $37,500, she is entitled to the maximum low income tax offset of $700. However, the offset will only reduce her tax payable on excepted income which is $190. With this offset, Kris will not have to pay tax on her excepted income. The unused offset amount is not refundable.
As Kris's other income is over $1,307, the total amount of $4,000 is taxed at 45%.
The net amount payable for all income by Kris is just the $1,800 tax on other income.
End of example