Personal Income Tax Cut The income tax rates for resident individuals will be reduced and backdated to 1 July 2020 (they were previously legislated to commence 1 July 2022):
Taxable Incomes (T.I.)
|
Rate
|
Tax Payable
|
Up to $18,200
|
0%
|
$Nil
|
$18,201 to $45,000
|
19%
|
$Nil + 19% over $18,200
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$45,001 to $120,000
|
32.5%
|
$5,092 + 32.5% over $45,000
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$120,001 to $180,000
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37%
|
$29,467 + 37% over $120,000
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$180,001 and above
|
45%
|
$51,667 + 45% over $180,000
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The previously legislated resident individual income tax rates to apply from 1 July 2024 will remain:
Taxable Incomes (T.I.)
|
Rate
|
Tax Payable
|
Up to $18,200
|
0%
|
$Nil
|
$18,201 to $45,000
|
19%
|
$Nil + 19% over $18,200
|
$45,001 to $200,000
|
30%
|
$5,092 + 30% over $45,000
|
$200,001 and above
|
45%
|
$51,592 + 45% over $200,000
|
Low and Middle Income Tax Offset This will be retained for the current 2020-21 year. The maximum non-refundable annual tax offset will be $1,080 and the base offset will be $255 for resident individuals. This offset benefit will be calculated as follows:
Taxable Incomes (T.I.)
|
Offset
|
Up to $37,000
|
$255
|
$37,001 to $48,000
|
$255 + 7.5% over $37,000 to a maximum benefit of $1,080
|
$48,001 to $90,000
|
$1,080 maximum
|
$90,000 to $126,000
|
$1,080 – 3% over $90,000
|
$126,001 and above
|
Nil
|
The offset will not be incorporated into the Pay As You Go Withholding tables, instead it will be credited as a lump sum on the annual income tax assessment. Low Income Tax Offset From 1 July 2020 the maximum non-refundable annual tax offset will increase from $445 to $700 for resident individuals and will be withdrawn at the following rates:
Taxable Incomes (T.I.)
|
Withdrawal Rate
|
$37,500 to $45,000
|
5 cents per dollar
|
$45,001 to $66,667
|
1.5 cents per dollar
|
Medicare Levy to Remain at 2% The Medicare Levy will remain at 2% and there will be the usual indexation of the Medicare Levy low income thresholds. CGT Exemption For Granny Flat Arrangements There will be a targeted exemption from 1 July 2021 where there is a formal arrangement in place with the homeowner residing at the property and an older person or a person with a disability is residing in a granny flat on that property. Under the current CGT provisions, the home owner partly loses their CGT main residence exemption on the property where rent is received for the granny flat and an immediate capital gain arises where the homeowner is paid a lump sum to build a granny flat on their property.
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