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  • Lower taxes for hard-working Australians: Building on the Personal Income Tax Plan

    The Government announced new changes to the Personal Income Tax Plan as part of the 2019-20 Federal Budget. These proposed changes are subject to the passage of law.

    From the 2018-19 income year:

    • Increase the low and middle income tax offset from a maximum amount of $530 to $1,080 per annum and increase the base amount from $200 to $255 per annum
    • Taxpayers with a taxable income which does not exceed $37,000 will receive a low and middle income tax offset of up to $255
    • Taxpayers with a taxable income which exceeds $37,000 but is not more than $48,000 will receive $255, plus an amount equal to 7.5 per cent to the maximum offset of $1,080
    • Taxpayers with a taxable income which exceeds $48,000 but is not more than $90,000 will be eligible for the maximum low and middle income tax offset of $1,080
    • Taxpayers with a taxable income which exceeds $90,000 but is not more than $126,000 will be eligible for a low and middle income tax offset of $1,080, less an amount equal to 3 per cent of the excess.

    From the 2022-23 income year:

    • The top threshold of the 19 per cent personal income tax bracket will increase from $41,000 to $45,000 such that the rate of tax on the amount of the taxable income of a resident individual that:
      • exceeds $18,200 but is not more than $45,000 is 19 per cent
      • exceeds $45,000 but is not more than $120,000 is 32.5 per cent
      • exceeds $120,000 but is not more than $180,000 is 37 per cent
      • exceeds $180,000 is 45 per cent
       
    • Increase the low income tax offset (LITO) from a maximum amount of $645 to $700 per annum
    • Taxpayers with a taxable income which does not exceed $37,500 will receive a LITO of $700
    • Taxpayers with a taxable income which exceeds $37,500 but is not more than $45,000 will receive a LITO of $700, less an amount equal to 5 per cent of the excess
    • Taxpayers with a taxable income which exceeds $45,000 but is not more than $66,667 will receive a LITO of $325, less an amount equal to 1.5 per cent of the excess.

    From the 2024-25 income year:

    • The 32.5 per cent marginal tax rate will reduce to 30 per cent such that for a resident individual the rate of tax on the amount of their taxable income that:
      • exceeds $18,200 but is not more than $45,000 is 19 per cent
      • exceeds $45,000 but is not more than $200,000 is 30 per cent
      • exceeds $200,000 is 45 per cent.
       

    More information

    For more information, refer to Budget 2019-20 Part 2External Link, page 17-18.

    Details on the Personal Income Tax Plan changes announced in the 2018-19 Federal Budget which are now law can be found here.

    Last modified: 18 Apr 2019QC 58605