Planning tool

Students:

• find appropriate and efficient approaches when solving practical problems
• are confident with percentages and can express a percentage in different forms
• understand a range of simple financial terms and instruments
• choose and solve problems appropriately and efficiently, as well as communicate and justify their choices.

Students may:

• be uncomfortable with non-natural rational numbers.
• have had little exposure to the contexts explored in examples and need some accompanying vocabulary or explanation.
• be unfamiliar with the idea of a percentage greater than 100%.

The Learning from home activities are designed to be used flexibly by teachers, parents and carers, as well as the students themselves. They can be used in a number of ways including to consolidate and extend learning done at school or for home schooling.

Learning intention

• We are learning to model personal income variation across Australia.
• We use the tax tables to calculate personal income tax.

 Why are we learning about this?

According to Benjamin Franklin, ‘death and taxes’ are the only two certainties of life. Tax is an important part of our lives. It pays for the roads we drive on, the school and doctor you attend, and even this website you are using. Society couldn’t function without taxes. Think ahead to when you are earning a salary. Ask yourself how much tax you will have to pay. Think about how much of your salary you will have left to budget and plan for the future in a realistic way. Here’s how it works.

What to do

The Australian Bureau of Statistics has compiled data on the mean and median salaries in an array of localities around Australia.

1. Scroll down to the heading that says Data downloads and select Table 2.
2. Each tab on the spreadsheet (at the bottom of the page) provides different granularity of data. Look through them to find places of interest to you. It could be where you were born, somewhere you’ve been on holiday, or a place you dream of living one day.
3. Write down the median salary of these places. (Those of you who have studied the statistics topic will already know why we’ve chosen the median!)
4. These salary figures are not an accurate indication of how much you might receive in your bank account each week or fortnight. The personal income tax you need to pay must be subtracted first. Why do you think salaries are quoted in this way? Why wouldn’t the after-tax figures be shown? I’ll leave that question to you. Maybe it can spark a conversation at your dinner table.
5. Using this link, you can find the table: Resident tax rates 2022–23. By hand, calculate the after-tax salary for each of the locations on your list.
6. Once you have completed your calculations, verify that you are correct by using one of the many pay calculators online.
7. Do you notice any differences in the gaps between the before-tax and after-tax figures? Are they closer together or further apart?
8. What does that tell you about the Australian taxation system?

Challenge

You have compared salaries by location but another interesting method for comparison is by industry.

1. Find some data online on the ABS site that approximates the median salary for different industries in Australia and repeat the process from above.
2. Do you have any idea which industry you might like to work in one day?
3. Maybe you could use the after-tax salary you’ve calculated as the basis for a weekly personal budget for your future.
4. Of course, it’s extremely difficult to predict the future, so your budget is likely to have errors. Can you think of what some of these might be?

 Success criteria

• I can use the tax rates to calculate personal income tax for a range of salaries.
• I can model personal income for a range of different Australians.