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.