kendalanita

Advice so we don't get robbed blind please!!! Got all our UK money over here - been here nearly two years and have all our money in couple of term deposits and a high interest a/c (all in my name as I am the lowest earner), I earn approx $25,000 pa (net) so what sort of percentage will I be paying in tax on the interest earned? Does that get added to what I have earned in my job? Really don't understand how it works, never had any savings before, it's our house money and we are not ready to buy yet here so thought this was the best thing to do with it in the meantime.
Are we being stupid???? Any help/suggestions would be greatly appreciated.
Cheers

JAJ

You'll pay at your highest income tax rate.

ozhappy981

Yes, at tax time, ithe interest gets added to your salary income. In other words: If your PAYG Payment Summary (the Oz version of the P60) says you earned $25,000 gross and the bank says you earned $10,000 in interest, then the two get added together. So, now you've earned $30,000 gross.

For 2009/10, you get a $6,000 tax-free threshold, i.e. you pay no tax on the first $6,000 you earn. Then you pay 15% on the next $29,000. But up to $30,000 you get a full "low income tax offset" of $1,350.[ If you earn more than $30,000, this offset gets reduced progressively.]

Assuming you had no deductions to claim (though most people have a few), and you were in Oz for the full 2009/10 tax year, you tax and Medicare due would be $3,435 on $30,000 of "earnings". Your employer will have deducted most of this through the payroll.

In the above scenario, your worst-case tax bill at the end of the year would be $300. [$10,000 x 16.5% less $1,350 LITO.]

If you want to PM me your real gross figures, I can give you a better estimate.