Ato Tax Rate Calculator 2021

Calculate your Australian tax liability for the 2020-2021 financial year with this accurate ATO-compliant tool.

Comprehensive Guide to ATO Tax Rates for 2020-2021

The 2020-2021 financial year (1 July 2020 to 30 June 2021) introduced several important changes to Australia’s tax system. This guide explains how the Australian Taxation Office (ATO) calculates your tax liability, including income tax rates, Medicare levy, and other obligations.

1. Australian Resident Tax Rates 2020-2021

The following tax rates apply to Australian residents for the 2020-2021 financial year:

Taxable Income	Tax on this Income	Effective Tax Rate
$0 – $18,200	Nil	0%
$18,201 – $45,000	19% for each $1 over $18,200	0-19%
$45,001 – $120,000	$5,092 plus 32.5% for each $1 over $45,000	19-32.5%
$120,001 – $180,000	$29,467 plus 37% for each $1 over $120,000	32.5-37%
$180,001 and over	$51,667 plus 45% for each $1 over $180,000	37-45%

Note: These rates do not include the Medicare levy (2% for most taxpayers) or the temporary low and middle income tax offset (LMITO) which provided tax relief of up to $1,080 for individuals.

2. Non-Resident Tax Rates 2020-2021

Non-residents are taxed at different rates and are not eligible for the tax-free threshold:

Taxable Income	Tax Rate
$0 – $120,000	32.5%
$120,001 – $180,000	$39,000 plus 37% for each $1 over $120,000
$180,001 and over	$61,200 plus 45% for each $1 over $180,000

3. Working Holiday Maker Tax Rates

Individuals on working holiday maker visas (subclass 417 or 462) have special tax rates:

• 15% tax rate on income up to $45,000
• Standard foreign resident rates apply to income over $45,000
• No tax-free threshold
• Not eligible for the low income tax offset

4. Medicare Levy and Surcharge

The Medicare levy is typically 2% of your taxable income, though exemptions and reductions apply in certain circumstances:

• Full exemption: For low-income earners (singles earning ≤$23,226, families ≤$39,167)
• Reduced rate: Phases in for incomes between $23,227-$29,033 (singles) or $39,168-$49,090 (families)
• Medicare Levy Surcharge: An additional 1-1.5% for high-income earners without private hospital cover (singles earning >$90,000, families >$180,000)

5. HECS/HELP Repayment Thresholds

If you have a HECS/HELP debt, repayment amounts are calculated based on your repayment income:

Repayment Income (2020-2021)	Repayment Rate
Below $46,620	0%
$46,620 – $53,718	1%
$53,719 – $56,138	2%
$56,139 – $60,797	2.5%
$60,798 – $65,911	3%
$65,912 – $71,499	3.5%
$71,500 – $77,525	4%
$77,526 – $84,089	4.5%
$84,090 – $91,198	5%
$91,199 – $100,240	5.5%
$100,241 – $110,900	6%
$110,901 – $123,759	6.5%
$123,760 – $138,359	7%
$138,360 and above	8%

6. Tax Offsets and Rebates

Several tax offsets were available in 2020-2021 to reduce your tax payable:

1. Low and Middle Income Tax Offset (LMITO): Up to $1,080 for individuals with taxable incomes up to $126,000. The offset phased out completely at $126,000.
2. Low Income Tax Offset (LITO): Up to $700 for individuals with taxable incomes up to $66,667.
3. Senior Australians and Pensioners Tax Offset (SAPTO): Available to eligible seniors and pensioners.
4. Private Health Insurance Rebate: A rebate on private health insurance premiums, income-tested with three tiers.

7. How to Reduce Your Taxable Income

Legal strategies to reduce your taxable income include:

• Salary sacrificing: Directing part of your pre-tax salary to superannuation (up to $27,500 concessional cap)
• Work-related deductions: Claiming legitimate work expenses (home office, uniforms, tools, self-education)
• Investment property deductions: Interest expenses, depreciation, repairs and maintenance
• Charitable donations: Tax-deductible gifts to registered charities
• Negative gearing: When investment expenses exceed income (common with property investments)
• Superannuation contributions: Personal deductible contributions (within caps)

8. Common Tax Mistakes to Avoid

Many taxpayers make these common errors that can lead to ATO audits or missed deductions:

1. Overclaiming work expenses: The ATO uses benchmarks for different occupations. Claims significantly above these may trigger an audit.
2. Incorrectly claiming home office expenses: The 80 cents per hour shortcut method was introduced for COVID-19 but has specific requirements.
3. Failing to declare all income: The ATO receives data from banks, employers, and sharing economy platforms (Uber, Airbnb etc.).
4. Claiming private expenses as work-related: Such as everyday clothing or travel between home and work.
5. Not keeping proper records: You must keep receipts and records for 5 years.
6. Incorrectly calculating capital gains: Especially for cryptocurrency and property sales.
7. Missing the deadline: 31 October for self-lodgers (or earlier if using a tax agent).

9. ATO Audit Triggers

The ATO uses sophisticated data matching to identify potential non-compliance. Common audit triggers include:

• Deductions significantly higher than others in your occupation/industry
• Large work-related expense claims without corresponding income
• Rental property claims that don’t match property management records
• Capital gains or losses not properly reported
• Discrepancies between your return and data from employers, banks, or other third parties
• Consistently reporting losses from a business that appears to be a hobby
• Claiming the home office shortcut method while also claiming individual expenses

10. Key Changes from Previous Years

The 2020-2021 financial year saw several important changes:

• Extended LMITO: The low and middle income tax offset was extended for another year, providing up to $1,080 in tax relief.
• Instant asset write-off: Temporary full expensing allowed businesses to immediately deduct the full cost of eligible depreciable assets.
• Home office shortcut method: The 80 cents per hour method was introduced due to COVID-19, replacing the previous 52 cents per hour rate.
• Early release of superannuation: Eligible individuals could access up to $20,000 of their superannuation in two $10,000 tranches.
• JobKeeper payments: These were taxable income and needed to be included in tax returns.
• Working from home deductions: New record-keeping requirements were introduced for home office expenses.

11. Tax Planning for Future Years

To optimize your tax position for future years:

1. Start a budget: Track your income and expenses throughout the year to identify deduction opportunities.
2. Use tax-effective structures: Consider whether a company, trust, or self-managed super fund might be appropriate for your situation.
3. Pre-pay expenses: If you expect higher income next year, consider pre-paying deductible expenses.
4. Defer income: If you expect to be in a lower tax bracket next year, consider deferring income where possible.
5. Review your investment strategy: Consider tax-effective investments like Australian shares with franking credits.
6. Maximize super contributions: Take advantage of concessional and non-concessional contribution caps.
7. Keep immaculate records: Use digital tools to track receipts and expenses throughout the year.
8. Consult a professional: A registered tax agent can provide personalized advice and help you navigate complex tax situations.

12. Where to Get Help

If you need assistance with your tax return:

• ATO website: ato.gov.au has comprehensive guides and tools
• ATO helpline: 13 28 61 for individuals, 13 72 26 for business
• Registered tax agents: Can be found through the Tax Practitioners Board
• Community tax help: Free services are available for eligible individuals through Tax Help and the National Tax Clinic program
• MyGov: Link your myGov account to the ATO to access your tax information online

Official Resources

For the most accurate and up-to-date information, consult these official sources:

• ATO Individual Income Tax Rates 2020-2021
• ATO Medicare Levy Information
• StudyAssist HECS-HELP Information