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Q10.5.3

(Superannuation lump sum, low cap amount)

Stan Eckhardt, aged 57, received a superannuation lump sum of $310,000 from his superannuation fund upon retirement on 15 April 2018. PAYG tax of $28,170 was withheld from the lump sum. The lump sum comprised entirely of an element taxed in the fund.

Stan also received gross wages of $85,000 up to the date of his retirement.PAYG tax of $22,110 was withheld from Stan's wages. Stan has adequate private health insurance.

Required:

a.Calculate Stan's taxable income for the 2017/18 tax year.

b.Calculate Stan's net tax payable or refundable for the 2017/18 tax year.

(a)

Gross Wages

85,000.00

superannuation lump sum

338,170.00

(Assume this 310000 is net amount)

Taxable income

423,170.00

(b)

Tax On 395000

150,982.00

Less

Tax Offset

Tax at marginal rates on 85000

19,172.00

Superannuation -Element Taxed in fund

20,725.50

-39,897.50

(338170-200000)x15%

111,084.50

Tax On 395000

150,982.00

Less

Tax Off

- 111,084.50

39,897.50

Medicare Levy 2%

8,463.40

Less

PAYG

-50,280.00

Tax payable

-1,919.10