Sagar is a non-resident and during the 2020 tax year he derived $28,000 in wages from a part-time job in Australia from which $9,100 in PAYG withholding was deducted. He also received a fully franked dividend of $2,100 from an Australian company that had $900 in franking credits attached. Sagar incurred $290 in various work related expenses for which he has kept the required documentation and which are all fully deductible. What is Sagar's taxable income and will be receive a tax refund or have a balance of tax to pay?

Question

Quizplus · Accepted Answer

Sagar's taxable income is calculated by adding his wages ($28,000) and the grossed-up dividend (the dividend plus the franking credits, which is $2,100 + $900 = $3,000), totaling $31,000. After subtracting the deductible work-related expenses ($290), his taxable income is $30,710. The tax on this income, including the Medicare levy for a non-resident, and the tax offset from the franking credits, results in a situation where the PAYG withholding ($9,100) exceeds his tax liability, leading to a refund of $94.25.

Sagar Is a Non-Resident and During the 2020 Tax Year