If you’re interested in how to calculate tax tiers in Excel, how to model the impact of changes in tax rates and brackets – or heck, if you just want to know how the tax tier changes affect your pay packet – take a look at the latest Excel Income Tax Calculator from Plum Solutions.
This calculator has always been our number one most downloaded item on the site and I’m not sure if it’s because you’re all so interested in financial modelling tax tier calculations, or you just want to know how much of your salary goes in tax! Calculating an amount based on tiering tables is a pretty complex formula, and is commonly used in lots of different financial models, especially pricing models.
I’ve made some improvements to the tax calculator this year to previous versions. Without getting into the politics of carbon tax etc and the complexities of the flood and medicare levies, basically the Australian Government has carefully adjusted the bracket to benefit those earning between $20k and $80k per annum. So this was an obvious opportunity to show how a data table in Excel can easily show how sensitive the result of a formula (in this case, tax payable) can be to changes in input numbers (taxable income). And of course sensitivity analysis is never complete without a chart! If you want to know more about how to build a data table and use it in a financial model, this is covered in the Advanced Financial Modelling course which is regularly run as a workshop or an online course.
Download the 2012/13 Excel Income Tax Calculator
This calculator contains some hidden columns so if you want to break it open and take it apart to see how it all works, please get in touch for the password.