3. If I suffered a business loss of $100,000 but received salaries income of $400,000 from a separate employment, can I pay less tax under Personal Assessment?
(Note: The following calculation is based on the tax rates for the year of assessment 2022/23.)
| Salaries Tax payable | $ |
| Salaries income | 400,000 |
| Less: Basic allowance | (132,000) |
| Net chargeable income | 268,000 |
| Tax thereon at progressive rate | 27,560 |
| Less: 100% tax reduction (capped at $6,000) (Note) | (6,000) |
| Tax payable | 21,560 |
| Profits Tax payable | $ |
| Business profits (or losses) | (100,000) |
| Tax payable | 0 |
| Tax payable under Personal Assessment | $ |
| Salaries income | 400,000 |
| Business losses | (100,000) |
| Chargeable income | 300,000 |
| Less: Basic allowance | (132,000) |
| Net chargeable income | 168,000 |
| Tax thereon (at progressive rates) | 11,520 |
| Less: 100% tax reduction (capped at $6,000) (Note) | (6,000) |
| Tax payable | 5,520 |
By electing Personal Assessment, your tax liability reduced by $16,040 (i.e. $21,560 – $5,520) because you business loss can be utilised to set off against your other assessable income in the year.
(Note) For 2022/23, 100% of the final tax payable under Profits Tax, Salaries Tax and tax under Personal Assessment would be waived, subject to a ceiling of $6,000 per case.
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