Financial Maths
Understand how wages are calculated, how income tax and deductions work, and how to create and manage a personal budget.
Wages and Income
Most Australians earn money through employment. There are several ways wages are calculated.
Hourly Rate
Paid per hour worked.
Pay = Hours × Hourly Rate
Example: 20 hrs × $18.50/hr = $370
Annual Salary
A fixed yearly amount, paid in regular instalments.
Weekly Pay = Salary ÷ 52
Example: $62,400 ÷ 52 = $1,200/week
Overtime
Extra pay for working beyond standard hours. Often paid at time-and-a-half (1.5×) or double time (2×).
Overtime Pay = Hours × Rate × 1.5
Commission
Pay based on a percentage of sales made.
Commission = Sales × Rate%
Example: $10,000 in sales at 5% = $500
Tax and Deductions
In Australia, workers pay income tax to the government based on how much they earn. The amount you receive after tax is called your net income (take-home pay).
Common Deductions
- ●Income tax — paid to the ATO (Australian Tax Office)
- ●Superannuation — retirement savings (9.5–11% of gross)
- ●Medicare levy — for public healthcare (2%)
- ●Union fees, health insurance — optional deductions
Simplified Australian Tax Rates (2025)
| Taxable Income | Tax Rate |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19% |
| $45,001 – $135,000 | 32.5% |
| $135,001+ | 37%–45% |
These are simplified for learning purposes.
Budgeting
A budget is a financial plan that compares your income to your expenses to ensure you can meet your needs and save for the future.
Surplus = Income − Expenses (positive = saving money)
Deficit = Expenses > Income (spending more than you earn)
Sample Weekly Budget
| Income | Amount |
|---|---|
| Part-time job wages | +$280 |
| Expenses | |
| Transport | -$40 |
| Food and snacks | -$60 |
| Entertainment | -$50 |
| Savings | -$80 |
| Remaining (Surplus) | $50 |
Key Vocabulary
Gross Income
Total earnings before any deductions (tax, superannuation, etc.) are subtracted.
Net Income
The amount actually received after all deductions are subtracted. Also called take-home pay.
Deduction
An amount subtracted from gross income before payment, such as tax and superannuation.
Budget Surplus / Deficit
Surplus: income > expenses (saving). Deficit: expenses > income (overspending).
Worked Examples
Layla earns $21.50/hour and works 15 hours per week. What is her weekly gross income?
Gross income = Hours × Rate = 15 × $21.50 = $322.50
Answer: $322.50 per week
Marcus earns a salary of $78,000. He pays 32.5% tax on the portion above $45,000. How much tax does he pay on this portion?
Taxable amount above $45,000: $78,000 − $45,000 = $33,000
Tax at 32.5%: $33,000 × 0.325 = $10,725
Answer: $10,725 tax on this portion
Priya's monthly income is $2,400. Her monthly expenses are: rent $900, food $350, transport $120, other $280. Does she have a surplus or deficit?
Total expenses: $900 + $350 + $120 + $280 = $1,650
Surplus: $2,400 − $1,650 = $750
Answer: Priya has a surplus of $750/month — she can save or invest this amount.
Knowledge Check
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Key Concepts Summary
- ●Gross income is total pay before deductions; net income is take-home pay after.
- ●Common deductions in Australia: income tax, superannuation, and Medicare levy.
- ●Overtime pay: time-and-a-half (1.5×) or double time (2×) the normal hourly rate.
- ●A budget surplus means income > expenses; a deficit means expenses > income.
- ●Australia uses a progressive tax system — higher incomes attract higher tax rates.