Definitions and calculations
Entity size
An entity is an individual, company, fund, self-managed fund, partnership or trust. We base our entity size on the amount of Total business income reported.
|
Entity size |
Total business income |
|---|---|
|
Loss |
less than $0 |
|
Nil |
equal to $0 |
|
Micro |
$1 to less than $2 million |
|
Small |
$2 million to less than $10 million |
|
Medium |
$10 million to less than $100 million |
|
Large |
$100 million to less than $250 million |
|
Very large |
$250 million or more |
Total business income is the amount:
- an Individual showed at the Total business income label on the Business and professional items 2022
- a Company showed at the Total income label (item 6, label S) on the Company tax return 2022
- a Fund showed at the Total assessable income label (item 10, label V) on the Fund income tax return 2022
- a Self-managed super fund showed at the Total assessable income label (item 11, label V) on the Self-managed superannuation fund annual return 2022
- a Partnership or Trust showed at the Total business income label (item 5) on the Partnership tax return 2022 or Trust tax return 2022.
Calculating net tax
Net tax is essentially the amount of tax owed for the income year, before applying refundable credits. It may not be the amount of tax payable or refundable on a notice of assessment.
A taxable entity is one whose net tax is more than $0. A non-taxable entity is one whose net tax is $0.
We calculate net tax differently for the following entities:
- individuals
- companies
- super funds.
Individual calculation
Some values in the calculations below are labels or totals on the Individual tax return 2022.
Step 1:
- Taxable income or loss = Total income or loss − Total deductions − Tax losses of earlier income years
Step 2:
- Tax on taxable income = Taxable income or loss × Individual tax rates
Step 3:
- Net tax = Tax on taxable income + Extra income tax − Total non-refundable tax offsets + Medicare levy + Medicare levy surcharge − Remaining foreign income tax offset
For Step 3:
- Extra income tax is any additional tax you need to pay
- Remaining foreign income tax offset is a non-refundable tax offset. It can only be applied to reduce a liability to nil. It can’t result in a refund.
Company calculation
Some labels are in the Company tax return 2022.
Step 1:
- Total profit or loss = Total income (item S6) − Total expenses (item 6Q)
Step 2:
- Taxable income = Total profit or loss (item 6T) + or − Reconciliation items (item 7)
Step 3:
- Gross tax = Taxable or net income (calculation statement: item A) × Relevant company tax rate + R&D recoupment tax (calculation statement: item M)
Step 4:
- Net tax = Gross tax (calculation statement: item B) − Non-refundable non-carry forward tax offsets (Calculation item C) − Non-refundable carry forward tax offsets (Calculation statement item D) − Franking deficit tax offset (calculation statement item F)
Super fund calculation
These items are labels on the Fund income tax return 2022 and Self-managed superannuation fund annual return 2022 respectively.
Step 1:
- Taxable income or loss = Total assessable income (item 10V/11V) − Total deductions (item 11N/12N)
Step 2:
- Gross tax = Taxable income or loss (item 11O/12O) × Fund type specific tax rate + Tax on no-TFN quoted contributions (item 12J/13J)
Step 3:
- Net tax = Gross tax (item 12B/13B) − Non-refundable non-carry forward tax offsets (item 12C/13C).
Estimating tax on net capital gains
In Taxation statistics, the tax on net capital gains is an estimate of the tax required to be paid, based on an average tax rate approach.
Estimated tax on net capital gains = Net tax ÷ Taxable income × Net capital gain.
Estimating business net tax
In Taxation statistics, business net tax is an estimate of the amount of net tax attributable to net business income. Business net tax is only calculated for taxable individuals with net business income and taxable income.
Estimated business net tax = Net income or loss from business (sum of items 15B and 15C) ÷ Taxable income × Net tax
- The items are labels on the Business and professional items 2022 schedule
- Where the proportion calculated above is greater than one, it is changed to one.
Calculating net GST
Net GST = Gross GST payable + Deferred GST payments on imports − Input tax credits
The net GST amount on the activity statement can also be affected by increasing and decreasing adjustments.
Tax return forms and other relevant publications
This is a list of all tax return forms, associated instructions and guides and other publications referred to in this edition of Taxation statistics.
Return forms, schedules and instructions:
- Individuals tax return and instructions 2022
- Individuals (supplementary section) tax return and instructions 2022
- Company tax return and instructions 2022
- Fund income tax return and instructions 2022
- Self-managed superannuation fund annual return and instructions 2022
- Partnership tax return and instructions 2022
- Trust tax return and instructions 2022
- International dealings schedule and instructions 2022
- Fringe benefits tax return and instructions 2023
Other guides:
Activity statements and GST:
- GST instructions
- Business activity statements (BAS) instructions)
- BAS forms
- Instalment activity statement forms
Other publications: