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.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.