If you are in Australia, and you were wondering about any of the changes that may occur to the tax rates, there have been a few changes slated for 2017. The Australian Taxation Office is constantly making modifications in order to better serve the people of the country. Sometimes there are increases, whereas others there will be decreases which can benefit people at certain income levels. Let’s go over the ATO tax rates for 2017 that may or may not affect your current situation.
What Is The ATO?
This is the Australian government’s taxation’s office. They are in charge of collecting taxes from people that make money in the country. Every country has some form of tax that it charges on a federal level. This is how a government is able to function. In Australia, the different levels of taxation are divided up the amount of money that you actually make every year. They will look at the gross level of income, and based upon where you are in that level, you will be taxed a certain amount.
What Are The Current Taxable Income Levels?
These levels will start at up to $18,200 for which there will be absolutely no taxes collected. It then moves up to $37,000, charging 19% for those taxes. If you make more than this, your taxes will increase starting with a lump-sum, and going all the way up to 45%. The amount of money that they take is based upon the laws of Australia, allowing them to use this money for infrastructure, running certain government programs, and of course preparing for the retirement of all Australians.
Why Is It Broken Down In This Manner?
The reason that it is broken down in this level is because there are so many diverse levels of income throughout the country. It is designed to make sure that all of the citizens of Australia have as many benefits as possible. If you look at other countries that have similar taxation, some of them can be more or less. They have chosen these particular rates because it has provided a good balance between allowing people to make money, and also allowing the country to run smoothly providing everyone with the benefits that they have come to know and expect.
They provide health insurance for people throughout the country, something that many countries including the United States do not actually provide. They also have a retirement package that will receive money from the government per the taxes that are collected. This also includes all of the infrastructure, government programs, and everything else that the citizens of Australia use every single day. Without this form of taxation, the country could not function properly, and therefore it needs to be modified from time to time and broken down in this way.
ATO Tax Rates For 2017
The most recent changes were actually in 2016. Prior to this year, the 37% tax would apply to people that were making only $80,000 a year. As a result of that change, they pushed it up to $87,000 which was actually very beneficial for people that were making just over $80,000 a year. The way that it is set up, it’s motivates people to make a certain income level just under the next taxation level so that they can maximize the amount that they earn.
Why Was This Change Made?
It was designed to provide a benefit for essentially the middle class of Australians. There were many people that were making just over $80,000 a year. This provided them with the tax benefit as they would remain at the 32.5% amount instead of paying 37% plus an increase of nearly $16,000 for the lump-sum that must be paid in addition to the taxes that would be removed.
That being said, it is clear that people that are in between these shifts in taxation will be a little bit upset due to how much more they will have to make in order to break even. However, there are many ways for people to compensate for these changes. There could be things that could be written off, or they could actually begin to invest into real estate which is a fantastic way to continue to earn the same amount of money.
Are There Any New Tax Changes Coming Up?
Although there are no new taxes coming up, this type of structure motivates people to stay within certain income levels. For example, if you are now making $87,000 a year, in order to earn the same amount annually, you would have to make almost $100,000 a year to take on the same amount of money. There have been some argumentation’s over this type of structure, but for the most part, it has done well to help the people of Australia. Since the vast majority of people make under that amount, it has only adversely affected those that are making just under $100,000 annually.
The ATO tax rates for 2017 structure seems to be intact for now. There may be changes to come in the future. It is a system that has worked for decades, and will be modified many more times in the future. It is designed to be as fair as possible to the citizens of Australia that are working hard to provide money for their family, and also to participate as a citizen. Hopefully the ATO tax rates for 2017 and beyond will be favorable to everyone involved.