The max tax rate in Australia is actually 47%..
http://www.ato.gov.au/individuals/co...u=5053&mfp=001
Because of the sliding scale you get an actual tax rate lower than that. That is you get the first $6000 tax free.
Companies pay 30% on every dollar earned.
If you earn $50,000 you pay 24% tax as an individual and 30% as a company.
No point in becomming a company until you ern about $70,000 (in Aust). Then you create a $2 company (has two shares each worth a $1)
Not many employers will pay a company and if you earn over 80% of your income from one source then you are classed as an employee (not a contractor).
Expenses incured as an individual (in generating your income) are also 'tax deductible'. This means you can reduce your net income by the expenses amount.
If I earn $60,000 and spend $10,000 on PC, IDE and internet access (ect) I have a taxable income of $50,000 )
Also look at property.
If I put extra savings into my home loan I save 6.76% per year in interest. I don't pay tax on this saving (as opposed to putting it into interest earning account and paying tax on every dollar earned). The property also is increasing in value at 13% per year. I pay less in mortgage than many of my friends do in rent.
Property is very low risk for good return.
