If you become bankrupt, a bankruptcy Trustee will make an assessment of your income each year. You will then have to pay income contributions to your Trustee. If you are considering bankruptcy you can use our free income contribution calculator to determine what income contributions you will have to pay.
BANKRUPTCY INCOME CONTRIBUTION CALCULATOR
Income: There is also no limit to the amount you can earn during bankruptcy. However, if your after-tax income exceeds an income threshold you will have to pay what is known as income contributions. The amount payable is calculated at 50% of the amount your net (after tax) income exceeds the income threshold. Income under bankruptcy is not the same as income for tax purposes. Income under bankruptcy is broad and can include fringe benefits, pensions, loans, distributions from a trust, superannuation annuities and employment termination payments.
Dependant: A person is only considered a dependant if all of the following applies: the person lives with the bankrupt; the person is financially dependant on the bankrupt; and the person earns less than the relevant indexed amount.
Child Support: Only child support liabilities arising from a Court Order or child support assessments made by Services Australia will be allowed as a deduction for bankruptcy income contribution calculation purposes. Informal arrangements are not an allowable deduction.
Income Contribution Threshold: One-half of the net income above the applicable Income Contribution Threshold is payable to the trustee. The threshold is expressed in after tax dollars and is dependent on the number of dependants a bankrupt has. The threshold is subject to change on 20 March and 20 September every year.
Disclaimer: This Income Contribution Calculator is only intended to provide an estimate of the income contributions you are liable for. It does not constitute our advice as to your income contribution liability in the event you are declared bankrupt. We accept no responsibility for any inaccuracies in the calculation. The calculator does not take into account matters that may be specific to your individual circumstances including but not limited to various tax offsets/rebates, exemptions for Medicare Levy, the Medicare Levy Surcharge, fringe benefits, income received from sources other than salary and wages, etc.