Minor Tax Rates

September 26, 2023

When it comes to minor tax rates for any financial year, it’s important to note that eligible taxable income or unearned income for individuals under the age of 18 is subject to special tax rates. In this post, we’ll break down the tax brackets and rules you need to know for minors:

Tax Rates for Minors:

  1. Up to $416: If a minor’s eligible taxable income falls within this range, there will be no tax payable.
  2. $417 – $1,307: For incomes in this bracket, the tax payable is calculated as the greater of the following two options:
    • 66% of the excess income over $416.
    • The difference between the tax payable at ordinary tax rates on the entire taxable income and the tax on the income other than the eligible taxable income, calculated at ordinary tax rates.
  3. Above $1,307: For eligible taxable incomes exceeding $1,307, a tax rate of 45% is applicable. Additionally, Medicare levy will apply to this amount.

The low-income tax offset cannot be used to reduce the tax payable on unearned income for minors.