MTR

Marginal Tax Rate
A marginal tax rate is the tax rate for each additional dollar of income earned. Person A earns $87,000 and pays 32.5% tax on the last dollar they earned. Person B earns $87,001 and pays 37% tax on the last dollar they earned. An individuals MTR refers to the rate of tax applied to their last dollar of earnings.

2017 Rates are as follows:

Taxable income              Tax on this income
0 – $18,200                       Nil
$18,201 – $37,000             19c for each $1 over $18,200
$37,001 – $87,000            $3,572 + 32.5c for each $1 over $37k
$87,001 – $180,000          $19,822 + 37c for each $1 over $87k
$180,001 and over             $54,232 + 45c for each $1 over $180k

Source: Australian Taxation Office, 2017.

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