I like to work 5 days/20 hours-ish a week and spend my free time studying. But I don't mind working an extra day if it's a Sunday to get the Sunday rate which is 1.5x at my company. I will bank these shifts so that I only work 4 days a week the next week thereby making more money for the same amount of hours spent at work. But then I figured I may actually be making less money this way because of taxes. I make 30 grand a year at 25$ an hour. Even though I may get some of this money back I realised I may not be getting a good portion of it back. Does any tax savvy users here have any thoughts on this? Am I overthinking it and should I just stick to my routine of 5 days a week max?
Should I work every Sunday to maximise my earnings?
baskinghobo on 16/07/2018 - 22:08
Comments
I figured I may actually be making less money this way because of taxes
No, you'll still make more money than if you didn't work the hours.
lol
He quoted you in context, the quote is basically the crux of your question. He then answered that question correctly and as succinctly as possible… ?
You only get taxed a portion of your pay. If you make more pre-tax money, you'll take home more after-tax money. You can literally never make less money working than not working in your situation. The commenter answered your question - your failure to understand it is your problem.
Your tax at the end of the year is the same whether you work Sundays or Mondays - Fridays. Its how much you earn not the days you earn it on that matters.
I'm not entirely sure how taxes work but I noticed in my payslip if I don't earn much money for the week I don't pay any taxes. I might be mixing this up with super but then I figured because of that the taxes were dependant on how much money I made for the week and got higher in rate the more I earned and I got that money back later in the tax return if I didn't earn much annually to even things out. But in my mind im thinking instead of a 6+4 day week
Week 1 $650 - $100 to tax (won't get all back because above tax bracket)
Week 2 $400 - $30 to tax
I may be making less than a 5 day week
Week 1 $500 - $30 to tax
Week 2 $500 - $30 to tax
Are you calculating your taxes by adding up the tax withheld figures on your payslip? If so that will give you an incorrect amount of tax you pay each year. For example, you could be earning less than the 18,200 tax threshold and still have a tax withheld figure on your payslip, which is actually returned back to you when you do your tax return at the end of the financial year.
Then, there's a maximum of $445 low income tax offset for people earning less than 37k
You can easily calculate it using a variety of apps and Tax calcs online. E.g https://www.paycalculator.com.au/
No those were just terrible examples i made up. But if tax rates do go up the higher the pay for the week than I believe this could be true if the Sunday rate wasn't high enough to offset the difference and you were in a tax bracket where you don't get all your tax return back.
I really hope you're not studying finance or accounting.
People are taking the time to give you the correct advise and you're just being hostile in return.
All of this because you have no idea how income tax works in Australia, so you take it out on people helping you.
@baskinghobo: Tax rates are marginal. When you get into a higher tax bracket, you don't suddenly pay that higher rate of tax on all your income, you only pay that higher rate on the income exceeding the threshold of the lower bracket.
Your weekly take home pay is calculated on many things, primarily of course is the gross pay.
Your employer is required to use the ATO's PAYG calculator which sets out how much they have to withhold from you and remit to the ATO.
Yes….if you earn below a certain amount the withholding amount could be zero, for example when the weekly pay calculated in annu al terms is less than the Tax free threshold.
My advice is NOT to worry about how much your tax home pay each week is after tax.
Earn as much as you can and the tax is calculated as a aggregate of the years earnings at the end of the financial year.
You have to think about this as a whole incrementally throughout the year. many people get confused between 'take how pay' and taxable income.
Tax home pay is what you get at the end of the week and can vary depending on the hours you work and the rate per hour. The tax withheld for the week is all added up and assessed against your taxable income at the end of the year.$0-18,200 you pay no tax for the year and get any tax withheld back as a 'return'
$18,201-$37,000 you will pay $0.19 for each $1 above $18,200. This again is compared to how much tax was withheld and you either get the difference back or pay the difference if not enough was deducted.Not to mention other low income rebates etc…
In the end you're still better off $0.81 per dollar compared to not working at all.
The more you get paid per hour the better off you will be.
I'll just take your word for it. Thanks for the answers guys ;D
@baskinghobo: Yay you saw the light. Tax is complicated and annoying, I don't think anyone would dispute that. But it's also really important because, well, unless you're a hobo you're going to be dealing with it the rest of your life. Go search "marginal tax rates" and have a read when you have time.
wtf, tax is really quite simple. the math behind it would be covered in primary school.
If you don't work, then you don't have to pay any taxes!
Brb going on Centrelink.
You should work 8 days a week to maximise your earnings.
every day, twice on sundays.
.
i work harder for ozbargain deals
Youre an idiot or 16 yrs old and a first time worker if you think that youre somehow getting ripped off the more you earn because you pay more tax
Hey mr op, would you like to work for $1000 an hour on weekends?
No thanks because i will get taxed more… Ill just work my normal $25 per hour on weekdays
Yes