Income tax
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Introduction
In this suite of activities, students calculate annual, weekly, fortnightly, gross and net pay. They use the ATO’s online calculator to calculate tax payable on wages and investigate progressive tax.
These activities link to several aspects of financial mathematics, particularly related work and earning an income and taxes.
General mathematics
Topic 1: Consumer arithmetic
Applications of rates and percentages:
- review rates and percentages (ACMGM001).
- calculate weekly or monthly wage from an annual salary, wages from an hourly rate including situations involving overtime and other allowances and earnings based on commission or piecework (ACMGM002).
Essential mathematics
Unit 2
Topic 2: Percentages
Percentage calculations:
- review calculating a percentage of a given amount (ACMEM061)
- review one amount expressed as a percentage of another. (ACMEM062)
Teacher resources
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How does Australia's income tax system work?
Tax withheld for individuals
Student learning resources
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How much tax should I pay?
Impact of income tax
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Suggested activity sequence
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: Defining income tax
- Play: How does Australia’s income tax system work?. This video explains how Australia’s progressive income tax system works.
- Use a grouping strategy to organise students in groups of 3 or 4.
- Groups construct a brief definition of income tax and a description of how it works. Each group writes their definition and description on the board.
- Conduct a class discussion to develop an agreed class definition of income tax and a description of how it works. Once you’ve settled on answers, get students to write them in their notebooks.
Part B: Calculating income tax
- Explicitly teach students how to use the tax withheld for individuals calculator on the ATO website.
- Invite students to refer to the Calculating income tax – How-to-sheet. Tailor your explicit instruction to complement the worked examples.
- Read through the worksheet as a class and invite students to complete it.
- Once students have had time to complete the worksheet, work through the answers as a class.
Part C: Investigating income tax
- Walk students through the investigation instructions, reminding students of the similarities to the problem you modelled.
- Students may benefit from working individually and/or in small discussion groups.