• Peer Wealth

Individual Tax Changes


The Government is proposing a seven-year Personal Income Tax Plan which will be implemented in three steps:

Step 1 – Provide tax relief to low and middle income earners;

Step 2 – Provide tax relief to avoid bracket creep;

Step 3 – Removing the 37% tax bracket.

According to the budget papers, 25% of Australians are paying more than 32.5% in income tax. After the above changes have been implemented, it has been estimated that only 6% of Australians will pay more than 32.5% in income tax. The majority of this change will occur in the 2024-25 financial year.

Tax payers with taxable income of $100k will be approximately $1,125 better off and tax payers with taxable income of $200k will be $7,225 better off.

Step 1 – Introducing the low and middle income tax offset (LMITO)

The LMITO will be introduced to provide tax relief of $530 to low and middle income earners starting from the 2018/19 financial year.

The LMITO will be received as a lump sum when the individual lodges their tax return.

Taxpayers will receive the following offset;

  • Taxable income of $37k or less = up to $200

  • Taxable income between $37k and $48k = increase at a rate of 3 cents per $1 to maximum amount of $530;

  • Taxable income between $48k and $90k = $530;

  • Taxable income between $90k and $125,333 = phase out at a rate of 1.5 cents per $1.

Step 2 – Provide tax relief to avoid bracket creep for middle income earners

From 1 July 2018, the 32.5% income tax bracket will increase from $87k to $90k.

From 1 July 2022, the 19% income tax bracket will increase from $37k to $41k. The 32.5% income tax bracket will increase again from $90k to $120k. Additionally, the low income tax offset will increase from $445 to $645.

Step 3 – Removing the 37% tax bracket

From 1 July 2024, the 37% tax bracket will be removed and the 45% tax bracket will increase from $180k to $200k. See below the end outcome of these changes:


#GovernmentBudget

0 views

2017 SNB Business of The Year

2017 

Professional Services Award

Tel. (02) 8014 7608

Email. info@peerwealth.com.au

Mon - Friday 8:30am-5:30pm

  • Facebook Social Icon
  • Instagram Social Icon

Manly Office

202b / 39 East Esplanade Manly NSW 2095

Forster Office

12 Wallis St Forster NSW 2428

 

Mon-Friday 8:30 - 5:30pm

Liability limited by a scheme approved under Professional Standards Legislation.* *Other than for the acts or omissions of financial services licensees