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Reference material

Last updated 23 September 2020

Reference material is intended to help you get the most out of our statistics.

Definitions and calculations

In this section:  

Entity size

In Taxation statistics, an entity is defined as an individual, a company, a fund, a self-managed fund, a partnership or a trust. The entity’s size, based on total business income, is shown in the table below.

Table 21: Determine entity size

Entity size

Total business income

Loss

less than $0

Nil

equal to $0

Micro

$1 to less than $2 million

Small

$2 million to less than $10 million

Medium

$10 million to less than $100 million

Large

$100 million to less than $250 million

Very large

$250 million or more

Total business income is the amount:

Calculating net tax

Throughout the publication, 'net tax' is essentially the amount of tax owed for the income year, before refundable credits are taken into consideration. It does not generally equate to the amount of tax payable or refundable as shown on a notice of assessment.

A taxable entity is one whose net tax is more than $0. A non-taxable entity is one whose net tax is $0.

Find out about  

Individual net tax calculation

These items are labels in the individual return form.

Taxable income or loss

Total income or loss

minus

Total deductions

minus

Tax losses of earlier income years

Tax on taxable income

Taxable income or loss

multiplied by

Individual marginal tax rates

Net tax

Tax on taxable income

plus

Extra income tax

minus

Total non-refundable tax offsets

plus

Medicare levy

plus

Medicare levy surcharge

plus

Temporary Budget repair levy

minus

Remaining foreign income tax offset

In this table:

  • Extra income tax is any additional tax that you are required to pay, for example, the amount added to tax on taxable income when a primary producer’s average income exceeds taxable income in a particular year
  • Remaining foreign income tax offset is a non-refundable tax offset. It can only be applied to reduce a liability to nil. It can’t result in a refund.

Company net tax calculation

These items are labels in the company return form.

Total profit or loss

Total income (item S6)

minus

Total expenses (item 6Q)

Taxable income

Total profit or loss (item 6T)

plus or minus

Reconciliation items (item 7)

Gross tax

Taxable income (calculation statement: item A)

multiplied by

Relevant company tax rate

plus

R&D recoupment tax (calculation statement: item M)

Net tax

Gross tax (calculation statement: item B)

minus

Non-refundable tax offsets

minus

Franking deficit tax offset (calculation statement: items C, D and F)

Super fund net tax calculation

These items are labels in the Fund tax return and Self-managed superannuation fund annual return respectively.

Taxable income or loss

Total assessable income (item 10V/11V)

minus

Total deductions (item 11N/12N)

Gross tax

Taxable income or loss (item 11O/12O)

multiplied by

Fund type specific tax rate

plus

Tax on no-TFN quoted contributions (item 12J/13J)

Net tax

Gross tax (item 12B/13B)

minus

Non-refundable non-carry forward tax offsets (item 12C/13C)

Estimating tax on net capital gains

In Taxation statistics, the tax on net capital gains is an estimate of the tax required to be paid, based on an average tax rate approach.

Average tax rate

Net tax

divided by

Taxable income

Estimated tax on net capital gains

Average tax rate

multiplied by

Net capital gain

Estimating business net tax

In Taxation statistics, business net tax is an estimate of the amount of net tax attributable to net business income. Business net tax is only calculated for taxable individuals with net business income and taxable income.

Proportion of taxable income sourced from net business income

Net income or loss from business (sum of items 15B and 15C)

divided by

Taxable income (Taxable income or loss label on page 4 of the tax return)

Estimated business net tax

Proportion of taxable income sourced from net business income

multiplied by

Net tax

In this table:

Calculating net GST

Net GST

Gross GST payable

plus

Deferred GST payments on imports

minus

Input tax credits

In this table, the net amount of GST on the activity statement can also be affected by increasing and decreasing adjustments.

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