In July 2019, the Federal Government approved new individual tax rates that are effective from 1 July 2018 onwards. The legislation, aptly named “Treasury Laws Amendment (Tax Relief so Working Australians Keep More of Their Money) Bill 2019”, will lower the income tax payable by many. There will be an increase to the low and middle tax offset, changes to the income thresholds and income tax rates.

The new tax rates for individual Australian tax residents will be: 

Rate From 1 July 2018 Income Range From 1 July 2022 Income Range From 1 July 2024 Income Range
Tax Free $0 – $18,200 $0 – $18,200 $0 – $18,200
19% $18,201 – $37,000 $18,201 – $45,000 $18,201 – $45,000
30% n/a n/a $45,001 – $200,000
32.50% $37,001 – $90,000 $45,000 – $120,000 n/a
37% $90,001 – $180,000 $120,001 – $180,000 n/a
45% > $180,000 > $180,000 > $200,000
New Low & Middle Income Tax Offset Up to $1,080 n/a n/a
Low Income Tax Offset Up to $445 n/a n/a
New Low Income Tax Offset n/a Up to $700 Up to $700

 

The Low and Middle Income Tax Offset will be as follows: 

Taxable Income Former LMITO New LMITO
$0 – $37,000 Up to $200 Up to $255
$37,000 – $48,000 $200 – $530 $256 – $1,080
$48,000 – $90,000 Up to $530 Up to $1,080
$90,001 – $126,000 Offset phases out at 1.5c per $ > $90K Offset phases out at 3c per $ > $90K

 

The new Income Tax Offset from the 2022/2023 tax year will be as follows: 

Taxable Income Former LITO New LITO
$0 – $37,000 Up to $645 n/a
$0 – $37,500 n/a Up to $700
$37,000 – $41,000 Offset increase of 6.5c per $ > $37K up to $645 n/a
$37,500 – $45,000 n/a Offset increase of 5c per $ up to $700
$45,000 – $66,667 Offset phases out at 1.5c per $ > $45K Offset phases out at 1.5c per $ > $45K

 

The new tax rates for individual foreign tax residents will be: 

Rate 2018/19 to 2021/22 2022/23 and 2023/24 From 2024/25
30% $0 – $90,000 $0 – $120,000 $0 – $200,000
37% $90,001 – $180,000 $120,001 – $180,000 n/a
45% > $180,000 > $180,000 > $200,000

 

Please contact us to find out more.

Please note this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.