A | B | C | D | E | F | G | H | CH | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
Tax brackets are the divisions at which tax rates change in a progressive tax system (or an explicitly regressive tax system, though that is rarer). Essentially, tax brackets are the cutoff values for taxable income—income past a certain point is taxed at a higher rate.
Example
Imagine that there are three tax brackets: 10%, 20%, and 30%. The 10% rate applies to income from $1 to $10,000; the 20% rate applies to income from $10,001 to $20,000; and the 30% rate applies to all income above $20,000.
Under this system, someone earning $10,000 is taxed at 10%, paying a total of $1,000. Someone earning $5,000 pays $500, and so on.
Meanwhile, someone who earns $25,000 faces a more complicated calculation. The rate on the first $10,000 is 10%, from $10,001 to $20,000 is 20%, and above that is 30%. Thus, they pay $1,000 for the first $10,000 of income (10%), $2,000 for the second $10,000 of income (20%), and $1,500 for the last $5,000 of income (30%), In total, they pay $4,500, or an 18% average tax rate.
In practice the computation is simplified by using point–slope form or slope–intercept form of the linear equation for the tax on a specific bracket, either as tax on the bottom amount of the bracket plus the tax on the marginal amount within the bracket:
or the tax on the entire amount (at the marginal rate), minus the amount that this overstates tax on the bottom end of the bracket.
See Progressive tax#Computation for details.
Tax brackets in Australia
Individual income tax rates (residents)
Financial years 2018–19, 2019–20[1]
| Taxable income | Tax on this income | Effective tax rate |
|---|---|---|
| 0 – $18,200 | Nil | 0% |
| $18,201 – $37,000 | 19c for each $1 over $18,200 | 0 – 9.7% |
| $37,001 – $90,000 | $3,572 plus 32.5c for each $1 over $37,000 | 9.7 – 21.9% |
| $90,001 – $180,000 | $20,797 plus 37c for each $1 over $90,000 | 21.9 – 30.3% |
| $180,001 and over | $54,097 plus 45c for each $1 over $180,000 | 30.3 – less than 45% |
The above rates do not include the Medicare levy of 2.0%.
Tax brackets in Canada
Canada's federal government has the following tax brackets for the 2012 tax year (all in Canadian dollars). The "basic personal amount" of $15,527 effectively means that income up to this amount is not subject to tax, although it is included in the calculation of taxable income.[2]
| Taxable income | Tax on this income |
|---|---|
| $0–$15,527 | Nil |
| $15,528–$42,707 | 15% |
| $42,708–$85,414 | 22% |
| $85,414–$132,406 | 26% |
| Over $132,406 | 29%[3] |
Each province except Québec adds their own tax on top of the federal tax. Québec has a completely separate income tax.
Provincial / Territorial Tax Rates for 2012:[4]
Tax brackets in India
Income tax slabs applicable for financial year 2015–16 (Assessment Year- 2016–17)is summarized below:
| Men and Women under 60 years | |
|---|---|
| Up to ₹ 250,000 | Nothing |
| ₹ 250,001 to ₹ 500,000 | 5% of the amount exceeding ₹ 250,000 (2.5 lacs) |
| ₹ 500,001 to ₹ 1,000,000 | ₹ 12,500 + 20% of the amount exceeding ₹ 500,000 (5 Lacs ) |
| More than ₹ 1,000,000 | ₹ 1,12,500 + 30% of the amount exceeding ₹ 1,000,000 (10 lacs) |
| Men and Women between 60 and 80 years | |
|---|---|
| Up to ₹ 300,000 | Nothing |
| ₹ 300,001 to ₹ 500,000 | 5% of the amount exceeding ₹ 300,000 (3 lacs) |
| ₹ 500,001 to ₹ 1,000,000 e | ₹ 15,000 + 20% of the amount exceeding ₹ 500,000 (5 lacs) |
| More than ₹ 1,000,000 | ₹ 115,000 + 30% of the amount exceeding ₹ 1,000,000 (10 lacs) |
| Very Senior Citizens above 80 years | |
|---|---|
| Up to ₹ 500,000 | Nothing |
| ₹ 500,001 to ₹ 1,000,000 | 20% of the amount exceeding ₹ 5 lacs |
| More than ₹ 1,000,000 | ₹ 100,000 + 30% of the amount exceeding ₹ 10 lacs |
Tax brackets in Malaysia
Malaysia has the following income tax brackets based on assessment year.[6]
Assessment Year 2020
| Taxable income | Tax payable on this income | Effective tax rate |
|---|---|---|
| MYR 0 – 5,000 | Nil | 0% |
| MYR 5,001 – 20,000 | 1% for each MYR 1 over MYR 5,000 | 0 – 0.75% |
| MYR 20,001 – 35,000 | MYR 150 + 3% for each MYR 1 over MYR 20,000 |
0.75 – 1.71% |
| MYR 35,001 – 50,000 | MYR 600 + 8% for each MYR 1 over MYR 35,000 |
1.71 – 3.60% |
| MYR 50,001 – 70,000 | MYR 1,800 + 14% for each MYR 1 over MYR 50,000 |
3.60 – 6.57% |
| MYR 70,001 – 100,000 | MYR 4,600 + 21% for each MYR 1 over MYR 70,000 |
6.57 – 10.90% |
| MYR 100,001 – 250,000 | MYR 10,900 + 24% for each MYR 1 over MYR 100,000 |
10.90 – 18.76% |
| MYR 250,001 – 400,000 | MYR 46,900 + 24.5% for each MYR 1 over MYR 250,000 |
18.76 – 20.91% |
| MYR 400,001 – 600,000 | MYR 83,650 + 25% for each MYR 1 over MYR 400,000 |
20.91 – 22.28% |
| MYR 600,001 – 1,000,000 | MYR 133,650 + 26% for each MYR 1 over MYR 600,000 |
22.27 – 23.77% |
| MYR 1,000,001 – 2,000,000 | MYR 237,650 + 28% for each MYR 1 over MYR 1,000,000 |
23.76 – 25.88% |
| MYR 2,000,001 and over | MYR 517,650 + 30% for each MYR 1 over MYR 2,000,000 |
25.88% – 30.00% |
Tax brackets in Malta
Malta has the following tax brackets for income received during 2012
Single Rates:
| Taxable income | Tax on this income |
|---|---|
| €0 – 8,500 | Nil |
| €8,501 – 14,500 | 15% |
| €14,501 – 19,500 | 25% |
| €19,501 and over | 35% |
Married Rates:
| Taxable income | Tax on this income |
|---|---|
| €0 – 11,900 | Nil |
| €11,901 – 21,200 | 15% |
| €21,201 – 28,700 | 25% |
| €28,701 and over | 35% |
Tax brackets in the Netherlands
Tax brackets in New Zealand
New Zealand has the following income tax brackets (as of 1 October 2010). All values in New Zealand dollars, with the ACC Earners' levy not included.[7]
| Taxable income | Tax on this income |
|---|---|
| $0 – $14,000 | 10.5% |
| $14,001 – $48,000 | 17.5% |
| $48,001 – $70,000 | 30% |
| $70,001 and over | 33% |
45% when the employee does not complete a declaration form (IR330).
ACC Earners' Levy for the 2010 tax year is 2.0%, an increase from 1.7% in the 2008 tax year.
Tax brackets in Singapore
2007 & 2008
| Taxable income | Tax on this income |
|---|---|
| $0–$20,000 | Nil |
| $20,001–$30,000 | 3.5c for each $1 over $20,000 |
| $30,001–$40,000 | $350 plus 5.5c for each $1 over $30,000 |
| $40,001–$80,000 | $900 plus 8.5c for each $1 over $40,000 |
| $80,001–$160,000 | $4300 plus 14c for each $1 over $80,000 |
| $160,001–$320,000 | $15,500 plus 17c for each $1 over $160,000 |
| Over $320,000 | $42,700 plus 20c for each $1 over $320,000 |
A personal tax rebate of 20% was granted for 2008, up to a maximum of $2,000.