Largest income tax cuts in Australian history pass the Senate
Last week, the government secured the largest tax cuts in Australian history to come into effect from 1 July 2018. The aim of the tax cuts is to provide personal income tax relief to lower and middle-income earners.
The first phase is from 1 July 2018, with a Low and Middle Income Tax Offset now be available for individuals with incomes of up to $125,333.
The $87,000 income threshold, above which a 37 per cent tax rate applies, will increase to $90,000.
This is the first step in a seven-year Personal Income Tax Plan with plans to completely remove the 37 per cent tax bracket from 1 July 2024. Labor has announced it will repeal the cuts if it wins the next election.
Reduction in tax paid – Individuals |
|
Taxable income |
Tax reduction (2018-19 vs 2017-18) |
|
Up to $37,000 |
Up to $200 |
|
$45,000 |
$440 |
|
$48,000 |
$530 |
|
$87,000 |
$530 |
|
$90,000 |
$665 ($530 + $135) |
|
$100,000 |
$515 |
|
$120,000 |
$215 |
|
$125,333+ |
$135 |
If you have any queries on how the tax cuts will impact on you, please contact your Partners Wealth Group advisor.