I’m on a roll with Excel.
Following on from my previous posts where I provided a one line formula for Australian income tax, and NZ tax, it’s now time we look at the other common complications being: Medicare Levy, Medicare Levy Surcharge (MLS), the Low Income Tax Offset (LITO), and the Low & Middle Income Tax Offset (LMITO).
The following are for
the 2020-21 financial year.
Reminder:
Income tax formula
=SUMPRODUCT(--(B2>={18201;45001;120001;180001}),(B2-{18200;45000;120000;180000}), {0.19;0.135;0.045;0.08})
where B2 = Taxable Income
Medicare Levy
=IFS(B2>29032,B2*0.02, AND(B2<=29032,B2>23226), (B2-23226) * 0.1,B2<=23226,0)
where B2 = Taxable Income
This formula includes the phase in limits for a single individual. Please note this isn’t correct for pensioners, or families with their dependants (if any). I will come back and update this for a family at a later date.
Medicare Levy Surcharge:
=IFS(B2<=90000,0, AND(B2>90000,B2<=105000),B2*0.01, AND(B2>10500,B2<=140000),B2*0.015, B2>140000,B2*0.015)
where B2 = Taxable Income
Again, this is for a single individual. I will come back and update this for a family at a later date.
Of course the MLS is easily avoided by simply purchasing appropriate private healthcare.
LITO: The Low Income Tax Offset
=IFS(B2<=0,0, AND(B2>0,B2<=37500),700 AND(B2>37500,B2<=45000),(700-(B2-37500)*0.05), AND(B2>=45000,B2<66667),(325-(B2-45000)*0.015), B2>=66667,0)
where B2 = Taxable Income
Like most offsets, the LITO is a non refundable tax offset on income tax. Medicare is a levy, and thus a separate charge to income tax. This means that in general most offsets, such as LITO and LIMTO, can not be used to pay the Medicare levy.
LMITO: Low & Middle Income Tax Offset
=IFS(B2<1,0,AND(B2>=1,B2<=37000),255, AND(B2>37000,B2<=48000),(255+(B2-37000)*0.075), AND(B2>48000,B2<=90000),1080, AND(B2>9000,B2<=126000), (1080-0.03*(B2-90000)),B2>=126000,0)
where B2 = Taxable Income
The LMITO is available in addition to the LITO.