As an individual, the tax rates have actually changed from 2021 Financial Year versus the year beforehand. But with individuals, the more money that you earn, the more tax you pay as a percent. Here’s the income threshold breakdown for individuals:
I’m not saying don’t earn the money, there’s certain structures that you’re in that you can’t actually change this stuff and you’re stuck, but, better to earn the dollar and pay 47% tax, than not earn the dollar in the first place. But if you can keep as much of that money as you’ve earned, then why not do that. So that’s individuals.
The company tax rate depends on your turnover. Most businesses in Australia will fall under the “under $50 million in annual turnover” category. If that’s you, you’re looking at a 26% tax rate. It’s a flat tax rate, meaning it doesn’t go up the more the company earns – on the first dollar you pay 26%, and on the millionth you pay 26%. If your turnover is greater than $50M, or you’re an investment company like a bucket company (which we use quite often at Inspire), you’re sitting there at 30%.
The last one I want to mention is a Trust. Trusts give their profit to other people in the family group, or other entities in the family group. So trust themselves don’t pay tax; they sort of share the love around, and then the person receiving the money pays that.
Watch the full webinar and learn the 12 things you need to consider to legally reduce your tax bill in 2021 at https://learning.benwalker.com/courses/TaxPlanning2021
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