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: 

RateFrom 1 July 2018 Income RangeFrom 1 July 2022 Income RangeFrom 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/an/a$45,001 – $200,000
32.50%$37,001 – $90,000$45,000 – $120,000n/a
37%$90,001 – $180,000$120,001 – $180,000n/a
45%> $180,000> $180,000> $200,000
New Low & Middle Income Tax OffsetUp to $1,080n/an/a
Low Income Tax OffsetUp to $445n/an/a
New Low Income Tax Offsetn/aUp to $700Up to $700

 

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

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

 

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

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

 

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

Rate2018/19 to 2021/222022/23 and 2023/24From 2024/25
30%$0 – $90,000$0 – $120,000$0 – $200,000
37%$90,001 – $180,000$120,001 – $180,000n/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.