Q Could you please explain how Senior Age Tax Offset (SATO) is calculated. I am trying to determine how much tax I will pay and or rebate I should expect to receive.
A The Senior Age Tax Offset (SATO) is a tax offset available to taxpayers over Age Pension age, receiving an Age Pension and subject to an income test. If you are single, you can earn up to $30,685 taxable income this Financial Year and pay no tax after allowing for the offset. For a couple, the aggregate taxable income is $53,360 combined. Please note that income counted includes earned income, Deductible Superannuation Contributions and fringe benefits.
Any unused offsets can be transferred between partners. If an individual or a couple’s income exceeds the cut off threshold, they are no longer eligible for SATO. Please note from 1 July 2012 SATO will become Senior and Pensioner Tax offset (SAPTO)
The Formula for calculating a SATO entitlement for Singles is $2,230 – ((Taxable Income – $30,685) / 8)
The Formula for calculating a Couples SATO entitlement is $3,204 – ((Taxable Income – $53,360) / 8).
Another way of calculating your entitlement is to understand that the threshold reduces by 12.5 cents for every dollar of income above the Shade Out threshold.
|Category||Shade Out Income Threshold||Cut-Out Income Threshold||Maximum Tax Offset Available|
Alternatively the ATO website has calculators to determine your specific entitlements!