Skip to content
Free Excel Tutorials
  • Home
  • Excel For Beginners
  • Excel Intermediate
  • Advanced Excel For Experts

Data Analysis

  • Excel Frequency Function Example
  • How to create running total in an Excel Table
  • How to conditionally sum numeric data in an Excel table using SUMIFS
  • How to count table rows in Excel
  • Chart Axes in Excel

References

  • Approximate match with multiple criteria in Excel
  • LOOKUP function: Description, Usage, Syntax, Examples and Explanation
  • Left Lookup in Excel
  • Convert text string to valid reference in Excel using Indirect function
  • Merge tables with VLOOKUP in Excel

Data Validations

  • Excel Data validation whole percentage only
  • Data validation must not exist in list
  • Excel Data validation unique values only
  • Excel Data validation with conditional list
  • Excel Data validation date in specific year

How to Calculate Tax Rates in Excel

by

This example teaches you how to calculate the tax on an income using the VLOOKUP function in Excel. The following tax rates apply to individuals who are residents of Australia.

Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000 $19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 45c for each $1 over $180,000

Example: if income is 39000, tax equals 3572 + 0.325 * (39000 – 37000) = 3572 + 650 = $4222

To automatically calculate the tax on an income, execute the following steps.

1. On the second sheet, create the following range and name it Rates.

2. When you set the fourth argument of the VLOOKUP function to TRUE, the VLOOKUP function returns an exact match or if not found, it returns the largest value smaller than lookup_value (A2). That’s exactly what we want!

Explanation: Excel cannot find 39000 in the first column of Rates. However, it can find 37000 (the largest value smaller than 39000). As a result, it returns 3572 (col_index_num, the third argument, is set to 2).

3. Now, what’s left is the remainder of the equation, + 0.325 * (39000 – 37000). This is easy. We can return 0.325 by setting col_index_num to 3 and return 37000 by setting col_index_num to 1. The complete formula below does the trick.

Note: when you set the fourth argument of the VLOOKUP function to TRUE, the first column of the table must be sorted in ascending order.

Post navigation

Previous Post:

VLOOKUP without #N/A error in Excel

Next Post:

Manipulating text strings using Left, Mid, Right, Len, Substitute in Excel

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Learn Basic Excel

Ribbon
Workbook
Worksheets
Format Cells
Find & Select
Sort & Filter
Templates
Print
Share
Protect
Keyboard Shortcuts

Categories

  • Charts
  • Data Analysis
  • Data Validation
  • Excel Functions
    • Cube Functions
    • Database Functions
    • Date and Time Functions
    • Engineering Functions
    • Financial Functions
    • Information Functions
    • Logical Functions
    • Lookup and Reference Functions
    • Math and Trig Functions
    • Statistical Functions
    • Text Functions
    • Web Functions
  • Excel VBA
  • Excel Video Tutorials
  • Formatting
  • Grouping
  • Others

Logical Functions

  • How to use Excel NOT Function
  • How to use Excel AND Function
  • How to use Excel TRUE Function
  • How to use IFS function in Excel
  • XOR function: Description, Usage, Syntax, Examples and Explanation

Date Time

  • How to calculate Next working/business day in Excel
  • YEARFRAC function: Description, Usage, Syntax, Examples and Explanation
  • Get date from day number in Excel
  • Extract date from a date and time in Excel
  • Get fiscal quarter from date in Excel

Grouping

  • Group numbers at uneven intervals in Excel
  • Map text to numbers in Excel
  • Group arbitrary text values in Excel
  • Running count group by n size in Excel
  • If cell contains one of many things in Excel

General

  • How to calculate percent sold in Excel
  • How to get Excel workbook path only
  • How to calculate percentage discount in Excel
  • Common Errors in Excel
  • How to get random value from list or table in Excel
© 2025 xlsoffice . All Right Reserved. | Teal Smiles | Abbreviations And Their Meaning