Definitions of Income for Tax Purposes
Term | Definition |
Assessable Income | Most of the income you earn will be assessable income. Assessable income is income that you pay tax on, if you earn enough to exceed the tax-free threshold. Examples of assessable income you must declare include:
You may also receive some income in the form of goods or services instead of money. You need to declare the market value of these goods or services as assessable income in your tax return. |
Taxable Income | Your taxable income is your assessable income minus any allowable deductions. Your taxable income is used to work out how much tax you need to pay. Formula: Assessable income − allowable deductions = taxable income Allowable deductions don't directly reduce the amount of tax you pay, they reduce your taxable income, which in turn reduces the amount of tax you need to pay. |
Adjusted Taxable Income | The income component of the Division 293 tax calculation is based on the same income calculation used to determine the Medicare levy surcharge (MLS), disregarding any reportable superannuation contributions. The components of this income calculation are:
|