Karl, a resident taxpayer, earned salary payments of $20,000 during the 2015/16 income year. Karl had no deductions and no PAYG payments were made by his employer. (Ignore Medicare) Required: Calculate Karls tax liability for the 2015/16 financial year. You must refer to relevant law and show calculations.

Step 1: Taxable Income = Assessable Income Deductions

Step 2: Basic Income Tax Liability (BITL) = (Taxable Income x Tax Rate)

Step 3: Deduct offsets (if available)

Step 4: Deduct PAYG