The Temporary Budget Repair Levy, called the deficit levy in pre-budget leaks, targets higher income earners.
Treasurer Joe Hockey says the measure will raise $3.1 billion over the three years the money will be collected.
This is how it works:
From July 1 until June 30 2017, the Temporary Budget Repair Levy will be payable by those whose taxable income exceeds $180,000 at a rate of 2%.
This catches about 400,000 people.
The key words here are taxable income. Deductions to take income under $180,000 will be keenly sought.
However, it’s important to note that the extra 2% tax is only charged on dollars earned over $180,000.
Those with a taxable income of $180,000 or below will not pay the levy but those earning $200,000 will pay 2% of $20,000, or $400 of levy and those on $300,000 will pay 2% of $120,000, or $2,400.
Here’s what you’ll pay:
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