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# Reference material

Last updated 30 March 2021

Use the following reference material to get the most from our statistics.

## Definitions and calculations

### 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 table below shows the classification of entity size, based on total business income.

Table 21: Entity size classification

Entity size

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 these taxation statistics '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.

#### Individual net tax calculation

These items are labels on the individual tax return.

 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 minus Remaining foreign income tax offset

In this table:

• Extra income tax is any additional tax 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 on the company tax return.

 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 on the fund income 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.