• Targeted personal income tax relief

    The Government has changed the individual tax rates. From 1 July 2016, the marginal tax rate of 37 per cent starts at $87,000 instead of the $80,000.

    To benefit from this change your taxable income must be more than $80,000.

    The personal income tax relief changes take effect from 1 July 2016 and change the tax rates as follows (change in bold). New tax tables and payroll software updates apply from 1 October 2016.

    Updated tax rates for resident taxpayers

    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

    Updated tax rates for non-resident taxpayers

    Taxable income

    Tax on this income

    0 – $87,000

    32.5c for each $1

    $87,001 - $180,000

    $28,275 plus 37c for each $1 over $87,000

    $180,001 and over

    $62,685 plus 45c for each $1 over $180,000

    The above rates do not include the Medicare Levy or Temporary Budget Repair Levy.

    For employees

    Examples of the reduced amount of tax for the full year are shown below:

    $80,000 or less

    $0

    $81,000

    $45

    $82,000

    $90

    $83,000

    $135

    $84,000

    $180

    $85,000

    $225

    $86,000

    $270

    $87,000 or more

    $315

     

    Example

    Craig's taxable income is $85,000.

    With the increase in the threshold, Craig will pay $19,172 in income tax which is $225 less than he would have under the old threshold.

    End of example

    If you earn more than $80,000, from 1 October your employer will reduce the amount of tax being withheld from your pay.  You don’t have to do anything.  Any extra tax you have paid before the change will be credited to you when you lodge your 2017 income tax return.

    For employers

    New tax tables and payroll software updates apply from 1 October 2016 and the ATO Tax Withheld Calculator has also been updated.

    Contact your software provider for the relevant payroll software updates or download the latest tax table.

    Legislation and supporting material

    Find out more

      Last modified: 25 Oct 2016QC 48871