Mr. Smith is a self-employed individual who has a taxable income of $120,000 for the financial year 2022. He wants to know his tax payable for the year and the effective tax rate that he is paying. Assume that Mr. Smith is not eligible for any tax offsets or deductions.

The individual tax rates for the 2022 financial year are as follows:

• 0% on the first $18,200
• 19% on income between $18,201 and $45,000
• 32.5% on income between $45,001 and $120,000
• 37% on income between $120,001 and $180,000
• 45% on income over $180,000