• ### Surcharge rates

Before the surcharge was abolished for the 2005–06 and later financial years, the maximum surcharge rate was gradually reduced to:

• 15% for the financial years 1997–2003
• 14.5% in 2003–04
• 12.5% in 2004–05.

The maximum surcharge rate applies to your surchargeable contributions if your adjusted taxable income exceeds the higher income amount.

There is no surcharge if your adjusted taxable income is equal to or below the lower income amount.

If your adjusted taxable income is between the lower income amount and the higher income amount, the surcharge rate is calculated using the following formula:

• Rate = Adjusted taxable income − Lower income amount ÷ Divisor

The Divisor is different each financial year and is listed in Table 1.

Example: Calculating the surcharge rate

Mary's adjusted taxable income is \$98,696.00 for the 2003–04 financial year.

The surcharge rate is calculated as:

\$98,696 − \$94,691 ÷ 1,399.31034 = 2.86212%

The surcharge rate that applies to Mary's surchargeable contributions is 2.86212%.

Mary's surchargeable contributions are \$41,000. Her surcharge liability is calculated as:

\$41,000 × 2.86212% = \$1,173.45

End of example