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B Gross tax

Last updated 12 February 2019

Show at B the total of the amounts at T1 and J.

Use examples 5 and 6 to help you calculate the gross tax amount.

Example 5: Income tax calculation: Superannuation fund showing income at R3 No-TFN quoted contributions item 10

Example 5a: Complying superannuation fund

The Natalie Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.

The fund received $10,000 in assessable contributions (shown at R item 10) all of which are employer contributions. Of that amount, $8,000 is shown at R1 item 10 for members who quoted their TFN, but $2,000 is shown at R3 item 10 for members who have not quoted their TFN and who opened their account either:

  • on or after 1 July 2007, or
  • before 1 July 2007 but the assessable contributions made for the member in the income year exceeded $1,000.

The fund has also incurred $1,000 in deductible administration expenses (shown at Q item 11). The superannuation fund’s taxable income is $9,000 (shown at O item 11).

For the purposes of calculating the amount to be shown at J Tax on no-TFN-quoted contributions, T1 Tax on taxable income and B Gross tax, work out the amount of tax as follows:

 

 

Amount

Rate

Tax

 

Assessable income

 

 

 

 

 

No-TFN quoted contributions
(amount from R3 item 10, tax amount shown at J item 12)

$2,000

31.5%

$630

 

 

Assessable employer contributions
(from R1 item 10)

$8,000

 

 

 

 

Assessable contributions
(from R item 10)

$10,000

 

 

 

 

Total assessable income
(from V item 10)

$10,000

 

 

 

less

 

 

 

 

Deductions

 

 

 

 

 

Administration expenses
(from Q item 11)

$1,000

 

 

 

 

Taxable income
(from A item 12, tax amount shown at T1 item 12)

$9,000

15%

$1,350

 

 

Gross tax
(shown at B item 12)

 

 

$1,980#

# The amount of gross tax (shown at B item 12) is the sum of the no-TFN quoted contributions tax (shown at item 12) and the tax (shown at T1 item 12) worked out on the taxable income shown at A item 12.

For more information on the applicable tax rates, see Appendix 3.

Example 5b: Non-complying superannuation fund

If the Natalie Superannuation Fund is a non-complying fund, most of its income is taxed at the rate of 45%, but a tax rate of 46.5% applies to any no-TFN quoted contributions.

You would calculate J Tax on no-TFN quoted contributions, T1 Tax on taxable income, and B Gross tax as follows:

 

 

Amount

Rate

Tax

 

Assessable income

 

 

 

 

 

No-TFN quoted contributions
(amount from R3 item 10,tax amount shown at J item 12)

$2,000

1.5%

$30

 

 

Assessable employer contributions
(from R1 item 10)

$8,000

 

 

 

 

Assessable contributions
(from R item 10)  

$10,000

 

 

 

 

Total assessable income
(from V item 10)

$10,000

 

 

 

less

 

 

 

 

Deductions

 

 

 

 

 

Administration expenses
(from Q item 11)  

$1,000

 

 

 

 

Taxable income
(from A item 12, tax amount shown at T1 item 12)

$9,000

45%

$4,050

 

 

Gross tax
(shown at B item 12)

 

 

$4,080#

# The amount of gross tax (shown at B item 12) is the sum of the no-TFN quoted contributions tax (shown at J item 12) and the tax (shown at T1 item 12) worked out on the taxable income shown at A item 12.

For more information on the applicable tax rates, see Appendix 3.

Example 5c: Nil taxable income or loss

The Natalie Superannuation Fund is a complying fund. However, it has income which must be taxed at more than 15%.

The fund received $2,000 in assessable contributions, all of which are employer contributions for members who have not quoted their TFN and whose account was opened either:

  • on or after 1 July 2007, or
  • before 1 July 2007 but the assessable contributions made for the member in the income year exceeded $1,000.

Show the $2,000 at R3 item 10 and also at R item 10.

The fund has also incurred $3,000 in deductible administration expenses (shown at Q item 11). The fund's taxable income is $1,000 loss (shown at O item 11). The taxable income shown at A item 12 is $0.

 

 

Amount

Rate

Tax

 

Assessable income

 

 

 

 

 

No-TFN quoted contributions
(amount from R3 item 10, tax amount shown at J item 12)

$2,000

31.5%

$630

 

 

Assessable contributions
(from R item 10)

$2,000

 

 

 

 

Total assessable income
(from V item 10)

$2,000

 

 

 

less

 

 

 

 

Deductions

 

 

 

 

 

Administration expenses
(from Q item 11)

$3,000

 

 

 

 

Taxable income
(from A item 12, tax amount shown at T1 item 12)

$0

15%

$0

 

 

Gross tax
(shown at B item 12)

 

 

$630#

 

# Gross tax of $630 is payable even though the fund made a loss for the income year.

For more information on the applicable tax rates, see Appendix 3.

Example 6: Superannuation fund showing income at U Net non-arm’s length income item 10

Example 6a: Complying superannuation fund

The Elizabeth Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.

The fund received $10,000 of assessable contributions (shown at R item 10) and $4,000 of private company dividends. All private company dividends are generally treated as non-arm’s length income unless that income is consistent with an arm’s length dealing. See U Net non-arm’s length income. Of the $4,000 private company dividends, $2,000 is treated as non-arm’s length income. The net non-arm’s length income is taxed at 45%.

Non-arm’s length income expenses are $100. These expenses can be deducted only from the non-arm’s length income. All non-arm’s length income is shown on the tax return as a net amount of income. Accordingly an amount of $1,900 is shown at U item 10.

The amount of taxable income remaining after taking into account the non-arm’s length income is referred to as the low tax component.

The fund has also incurred $2,500 in deductible administration expenses (shown at Q item 11) that are not considered to be attributable to the earning of the non-arm’s length income.

The fund’s taxable income is $11,400 (shown at A item 12).

 

 

Amount

Rate

Tax

 

Assessable income

 

 

 

 

 

Assessable contributions
(from R item 10)
plus

$10,000

 

 

 

 

Private company dividends (arm’s length income)
(from J item 10)
plus

$2,000

 

 

 

 

Net private company dividends (non-arm’s length income)
(from U item 10)

$1,900

 

 

 

 

Total assessable income
(from V item 10)

$13,900

 

 

 

less

 

 

 

 

Deductions

 

 

 

 

 

Administration expenses
(from Q item 11)

$2,500

 

 

 

 

Taxable income (from A item 12)

$11,400

 

 

 

Components of taxable income

 

 

 

 

 

Non-arm’s length component

$1,900

45%

$855

 

 

Low tax component (that is other taxable income)

$9,500

15%

$1,425

 

 

Tax on taxable income (shown at T1 item 12)

 

 

$2,280#

 

#The amount of $2,280 is shown at T1 item 12 and also at B Gross Tax as in this example there are not any no-TFN quoted contributions.

Example 6b: Non-complying superannuation fund

If the Elizabeth Superannuation Fund is a non-complying fund, its income is taxed at a rate of 45% (although a tax rate of 46.5% would apply to no-TFN quoted contributions if it had any).

You calculate its gross tax as follows:

 

 

Amount

Rate

Tax

 

Assessable income

 

 

 

 

 

Assessable contributions
(from R item 10)
plus

$10,000

 

 

 

 

Net private company dividends (including those treated as non-arm’s length income)
(from J and U item 10)

$3,900

 

 

 

 

Total assessable income
(from V item 10)

$13,900

 

 

 

less

 

 

 

 

Deductions

 

 

 

 

 

Administration expenses
(from Q item 11)

$2,500

 

 

 

 

Taxable income
(from A item 12)

$11,400

45%

$5,130

 

 

Tax on taxable income (shown at T1 item 12)

 

 

$5,130

 

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