What taxes do you pay and why?

This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group. If you assign this activity to a class, your students will be assigned all student resources on their 'My learning' page. You can also hand-pick the resources students are assigned by selecting individual resources when you add a work item to a class in 'My classes'.

Part A: What taxes do you pay?

1. Play: Who pays tax? Ask students questions to check their understanding. Examples, with answers in brackets:
   • What does personal income include? (wages, money earned from investments, profits from business, profits from sale of assets)
   • How much do people need to earn before they pay personal income tax? ($18,200)
   • What is Australia’s income tax system called? (progressive income tax system)
   • What does this mean? (the more you earn the higher your tax rate)
   • What taxes do all people pay, even if they don’t have a job? (GST)
2. Ask students what taxes they pay. Do they pay income tax? Do they pay the goods and services tax? When did they last pay tax?
3. Highlight the fact that as all students are consumers, they are also taxpayers, even if they don’t have a job.

Part B: How do you pay tax and how is it calculated?

1. As a class, read the ‘goods and services tax ‘section of How do you pay tax and how is it calculated? Alternatively, invite students to read it individually or in pairs.
2. Ask students questions to elicit their understanding. Examples include:
   • What is the current rate of GST? (10%)
   • Is GST included in the final price you pay for goods and services? (yes)
   • What goods and services are GST-free? (basic foods, most education, childcare and certain health goods and services)
   • How do you calculate how much GST:
     • to add to the cost of an item if you are a business (add 10%)
     • you paid when you made a purchase (divide by 11)
3. Demonstrate to students how to use the GST calculator.
4. Individually, or in pairs, students complete part 1 of the worksheet.
5. Randomly check student answers.
6. As a class, read the ‘income tax ‘section of How do you pay tax and how is it calculated? Alternatively, invite students to read it individually or in pairs.
7. Ask questions to clarify understanding. Examples (with answers in brackets)
   • What is Australia’s income tax system called? (Progressive tax system)
   • What’s the tax-free threshold? ($18,200)
   • What is the top rate of tax? (45%)
   • How do you pay income tax? (Your employer withholds it from your pay and sends it to the ATO)
   • What does this mean? (the more you earn, the more tax you pay)
   • What is this called? (Pay as you go or PAYG)
8. Demonstrate to students how to access weekly tax tables on the ATO website.
9. Students complete part 2 of the worksheet.
10. Invite students to share their answers.

Part C: How does tax spending affect you?

1. Explain the structure of the explainer: Who provides the services you use?
2. Use a grouping strategy to organise students into groups of 2-4.
3. Display the visualiser and explain the group task. Groups will need a copy of Who provides the services you use?
4. Invite each group to share their response to the statement:

The benefits of paying tax outweigh the costs.