We have some great news!
The Federal Government has recently fast-tracked Personal Income Tax Cuts which were to apply from 1 July 2022, and brought this forward to 1 July 2020. Which means, for some of you, more money in your pockets.
The changes involve:
- Increasing the upper threshold of the 19% personal income tax bracket from $37,000 to $45,000; and
- Increasing the upper threshold of the 32.5% personal income tax bracket from $90,000 to $120,000
So, how much extra do I get?
The changes amount to around $20 per week extra for those earning between $48,000 and $90,000, with people earning more than that receiving a larger benefit which is up to a maximum $2,430 per year.
These payments have been split into two, so depending on your employer it could start rolling out as early as this month.
The rest of the payment will be coming in next year’s income tax return as a refund.
The great news doesn’t stop there…
The Government has also increased the Low Income Tax Offset from $445 to $700 (this helps decrease how much tax you have to pay)
If your taxable income is:
- $37,500 or less you will be entitled to the full offset of $700
- Between $37,501 and $45,000, you will be entitled to part of the $700 offset
- Between $45,001 and $66,667, you will get $325 less 1.5cents for every $1 over $45,000
And … the great news doesn’t stop there…
The Low and Middle Income Tax Offset has also been extended (this helps decrease how much tax you have to pay)
This is an additional $255 to $1080 depending on your income level. Here is a snapshot below:
- $37,000 or less you will receive a $255 offset
- Between $37,001 and $48,000 you will receive a portion of the $255 offset up to a maximum $1,080.
- Between $48,001 and $90,000 you will receive the full $1,080 offset
- Between $90,001 and $126,000 you will receive $1,080 less 3 cents for every $1 above $90,000.
And that’s it, there are some great tax cuts and offsets to help get the economy going while also putting a bit of extra cashback in your pocket.
Do you benefit from any of the latest tax changes?
If you have any questions, please feel free to contact us.