Jacob Fenech

speaker

958 appearances 3 recordings 1 series first heard Jun 2021 last heard Jun 2022

Jacob Fenech’s voice in public audio — every appearance, attributed to the second.

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Australian Finance Podcast · Tax time 2022: things to know (to get the best return) · 23 Jun 2022 podcast

It's just for a period and then you can use it going forward.

Definitely.

And I think, so we see this question all the time as well.

A progressive system basically means that the more you earn, the more you pay.

Um, that's, that's the bottom line.

What, what scares people, um, that haven't seen a progressive system before is the way that brackets work.

So interestingly, there's a couple of brackets, um, and they're, they're pretty big brackets within Australia, but, um, so like our top bracket of 180 K, um,

and you're paying with the Medicare levy, for instance, 47%, which is a massive tax whack.

So people think, okay, am I better off earning $179,990 and keeping under that bracket to make sure I'm not paying the 47%?

I see that all the time.

And so it's interesting within the progressive system.

So all it would mean if you hit the 180 or let's call it 180.01,

so a dollar over it, you're only paying the next bracket on that $1.

It doesn't mean that all the income up until that point is now subject to that top marginal rate.

And that's kind of the crux of the progressive system.

It's banded and it means that definitely the more you earn

even if you're looking at an average rate, for instance, that people are super keen and are talking, what's my average rate for the year?

It does mean that that increases, but it increases much slower than if you're thinking, okay, I don't want to jump into that next band because then I'm subject to all of my income at that top rate.

There's a couple of deadlines depending on who you are and who completes your tax.

So the first one, if you're a normal employee that does their own tax, good on you.

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