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Issues - CSA - The real rate of child support payment
calculations in Australia.
For wage and salary earners paying 30 cents
in dollar in income tax, 42 cents and 45 cents in income tax
respectivly.
The rate of child support on the Net (after tax) income is
very high.
This increases to higher percentage levels as the fathers
income increases and he moves into higher tax brackets.
In Australia child support calculations are
based on Gross income (Gross = Before Tax is taken).
With Rates of 18% for one child, 27% for two children, 30%
for three and 35% for four.
When these percentages are used on net incomes
(Net = After tax is taken) the real rates of child support
payments emerges.
For taxpayers paying 30 cents in the dollar
of income tax.
The 18% Gross (before tax) rate translates to
25.7% of after tax income.
The 27% Gross (before tax) rate translates to 38.5 % of after
tax income.
The 30% Gross (before tax) rate translates to 42.8% of after
tax income.
The 35% Gross (before tax) rate translates to 50% of after
tax income.
For taxpayers paying 42 cents in the dollar
Tax Rate leaves 58 cents per dollar in after tax income.
The 18% before tax rate translates to 31% of
after tax income.
The 27% before tax rate translates to 46.5% of after tax income.
48 cents in the dollar Tax Rate leaves 52 cents
per dollar in after tax income
The 18% before tax rate translates to 34.6% of after tax income.
The 27% before tax rate translates to 51.9% of after tax income.
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