Medicare levy increase affects small business
The Medicare levy increase – from 1.5% to 2% – will effectively bring the top marginal tax rate to 47%. This will not only impact individual taxpayers but also small businesses. A number of tax laws that businesses regularly comply with apply the top marginal income rate as a penalty rate of tax.
As a result, the following common tax items will be subject to tax of 47%, up from the previous 46.5%:
- Fringe Benefits Tax (FBT)
- TFN and ABN Withholding Tax
- Family Trust Distributions Tax
- Trusts, where Section 99A of the Income Tax Assessment Act 1936 (Cwlth) applies to retained income
- Excess non-concessional contributions to super (with tax on excess concessional contributions to increase to 32%).
For more information on how these changes will affect your business please contact us on 02 9318 6400