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New low and middle-income tax offset


The Personal Income Tax Plan was announced in the 2018-19 Budget and delivers a new low and middle-income tax offset, changes to the existing low-income tax offset and various threshold changes over the next seven years. The changes are law and currently being implemented.

New scope – assuming 2019-20 budget changes are enacted

From 2018-19

·     New low and middle-income tax offset

Base rate: $225

Maximum rate: $1,080

Taper: $225 plus 7.5% for TI’s that exceed $37,000 and are not more than $48,000

Taper: $1,080 less 3% for TI’s that exceed $90,000

·     Increase top threshold 32.5% tax bracket to $90,000

 

From 2022-23

·     Replace low income tax offset and low and middle-income tax offset

Base rate: $700

Taper: $645 less 5% for TI’s that exceed $37,500 and not more than $45,000

Taper: $385 less 1.5% for TI’s that exceed $45,000

·     Increase top threshold for 19% bracket to $45,000

·     Increase top threshold of $32.5% bracket to $120,000

 

From 2024-25

·     Increase top threshold of 32.5% bracket to $200,000 (effectively abolishing the 37% tax bracket)

·     Reduce the 32.5% tax rate to 30%

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JH Business Services & Taxation
Accounting | Business Advisory | Tax Services
Specialist in small to medium business 
& personal tax services


Norwest Office


 Suite 205
29-31 Lexington Drive
Bella Vista
NSW 2153