Personal Income Tax Cuts - Bill passes both houses of Parliament
The Government has secured enough support from the cross-bench senators to enable passage of the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018.
Under the Bill (which must now receive Royal Assent), the following changes will be made to personal tax rates:
Stage 1 & 2
From 1 July 2018, the threshold for the 32.5 per cent tax rate will increase from $87,000 to $90,000
From 1 July 2018, a Low and Middle Income Tax Offset, a non-refundable tax offset of up to $530 will be introduced. Australian resident individuals with income not exceeding $125,333 will be entitled to the offset in part or full, depending on their income
From 1 July 2022, the Low and Middle Income Tax Offset and the Low Income Tax Offset will be replaced by a new low income tax offset, of up to $645. Taxpayers earning not more than $37,000 will be entitled to the full offset , while it will be reduced for income above that amount and taper out at $66,667
From 1 July 2022, the thresholds for the 32.5 per cent tax rate will increased from $37,000 to $90,000, to $41,000 to $120,000
From 1 July 2024, the threshold for the 32.5 per cent tax rate will be further increased to $200,000 from $120,000, removing the 37 per cent tax rate. The top marginal rate of 45 cents (excluding the Medicare Levy) will commence at $200,001
The savings delivered by these changes can be summarised as follows:
For further information and details of these income tax cuts, please do not hesitate to contact us on (02) 4928 8500.