Solutions — Earning Income and Taxation

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1. Q1 — Gross weekly wage

   (a) 38 × $22.50 = $855.00   (b) 35 × $31.60 = $1 106.00   (c) 38 × $19.80 + 3 × 1.5 × $19.80 = $752.40 + $89.10 = $841.50   (d) 38 × $26 + 5 × 2 × $26 = $988 + $260 = $1 248

2. Q2 — Salary conversions

   (a) $62 400 ÷ 52 = $1 200/week   (b) $91 000 ÷ 26 = $3 500/fortnight   (c) $54 600 ÷ 12 = $4 550/month   (d) $1 140 × 52 = $59 280/year

3. Q3 — Commission income

   (a) 0.025 × $480 000 = $12 000   (b) $400 + 0.018 × $28 000 = $400 + $504 = $904   (c) 65 × $4.50 = $292.50

4. Q4 — Medicare levy

   (a) 0.02 × $42 000 = $840   (b) 0.02 × $78 500 = $1 570   (c) 0.02 × $130 000 = $2 600

5. Q5 — Income tax

   (a) $30 000 is in $18 201–$45 000 bracket. Tax = 0.19 × ($30 000 − $18 200) = 0.19 × $11 800 = $2 242.   (b) $55 000 is in $45 001–$120 000 bracket. Tax = $5 092 + 0.325 × ($55 000 − $45 000) = $5 092 + $3 250 = $8 342.   (c) $145 000 is in $120 001–$180 000 bracket. Tax = $29 467 + 0.37 × ($145 000 − $120 000) = $29 467 + $9 250 = $38 717.

6. Q6 — Net income

   (a) Tax = $5 092 + 0.325 × $3 000 = $5 092 + $975 = $6 067. Medicare = $960. Net = $48 000 − $6 067 − $960 = $40 973.   (b) Tax = $5 092 + 0.325 × $47 000 = $5 092 + $15 275 = $20 367. Medicare = $1 840. Net = $92 000 − $20 367 − $1 840 = $69 793.   (c) Taxable income = $78 000 − $3 200 = $74 800. Tax = $5 092 + 0.325 × $29 800 = $5 092 + $9 685 = $14 777. Medicare = 0.02 × $74 800 = $1 496. Net = $78 000 − $14 777 − $1 496 = $61 727.

7. Q7 — Comparing income types

   (a) Ahmed: $24.80 × 36 × 52 = $46 425.60/year. Bianca: $45 000/year. Ahmed earns more by $1 425.60.   (b) Option (i): $58 000. Option (ii): $32 × 38 × 52 = $63 232. Option (ii) is better by $5 232.

8. Q8 — Piecework and commission

   (a) $640 ÷ $3.20 = 200 garments.   (b) Need $700 − $300 = $400 from commission. $400 ÷ 0.04 = $10 000 in sales.   (c) (940 + 1 120 + 875) × $0.08 = 2 935 × $0.08 = $234.80.

9. Q9 — Full pay packet (Leila)

   (a) Standard: 38 × $34.50 = $1 311. Time-and-a-half (hrs 39–46, 8 hrs): 8 × 1.5 × $34.50 = $414. Double time (hrs 47–50, 4 hrs): 4 × 2 × $34.50 = $276. Gross = $1 311 + $414 + $276 = $2 001/week.   (b) Annual gross = $2 001 × 52 = $104 052. Tax = $5 092 + 0.325 × ($104 052 − $45 000) = $5 092 + $19 192 = $24 284. Medicare = 0.02 × $104 052 = $2 081.   (c) Net = $104 052 − $24 284 − $2 081 = $77 687/year.   (d) Total tax = $24 284 + $2 081 = $26 365. % = (26 365 ÷ 104 052) × 100 ≈ 25.3%.

10. Q10 — Interpreting a pay slip

    (a) Net pay = $1 450 − $312 − $29 = $1 109. (Superannuation is employer contribution, not deducted from gross.)   (b) Let hourly rate = r. Standard pay: 38r. Time-and-a-half: 3.5 × 1.5r = 5.25r. Total: 43.25r = $1 450. r = $1 450 ÷ 43.25 = $33.53/hr (to nearest cent).   (c) Annual gross ≈ $1 450 × 52 = $75 400.   (d) Tax on $75 400 = $5 092 + 0.325 × ($75 400 − $45 000) = $5 092 + $9 880 = $14 972/year = $14 972 ÷ 52 ≈ $288/week. PAYG withheld is $312/week — slightly higher, which is normal as employers often withhold a little extra. The figure is approximately correct.