What do the new tax cuts mean for you, based on your salary?
High-income earners will take a $4,546 haircut on tax cuts Australians were told had been locked in, but middle-income earners will be up to $804 better off under Labor’s plan to change marginal tax rates.
The amendments to the planned tax cuts due to come into effect on July 1 include foregoing some of the planned tax cuts for workers earning $135,000 to $200,000 a year, and lowering the bottom marginal tax rate from 19 per cent to 16 per cent.
Workers earning $130,000 will receive a tax cut. Workers on $40,000, who were originally slated to get no tax cut, will also receive a benefit.
The changes effectively deliver a greater tax cut to all taxpayers earning up to $150,000, while offering a smaller benefit to those earning more.
| 40,000 | 4,142 | – | 654 |
|---|---|---|---|
| 50,000 | 6,717 | 125 | 929 |
| 60,000 | 9,967 | 375 | 1,179 |
| 70,000 | 13,217 | 625 | 1,429 |
| 80,000 | 16,467 | 875 | 1,679 |
| 90,000 | 19,717 | 1,125 | 1,929 |
| 100,000 | 22,967 | 1,375 | 2,179 |
| 110,000 | 26,217 | 1,625 | 2,429 |
| 120,000 | 29,467 | 1,875 | 2,679 |
| 130,000 | 33,167 | 2,575 | 3,379 |
| 140,000 | 36,867 | 3,275 | 3,729 |
| 150,000 | 40,567 | 3,975 | 3,729 |
| 160,000 | 44,267 | 4,675 | 3,729 |
| 170,000 | 47,967 | 5,375 | 3,729 |
| 180,000 | 51,667 | 6,075 | 3,729 |
| 190,000 | 56,167 | 7,575 | 4,529 |
| 200,000 | 60,667 | 9,075 | 4,529 |
| 210,000 | 65,167 | 9,075 | 4,529 |
| 220,000 | 69,667 | 9,075 | 4,529 |
| 230,000 | 74,167 | 9,075 | 4,529 |
| 240,000 | 78,667 | 9,075 | 4,529 |
| 250,000 | 83,167 | 9,075 | 4,529 |
Table: Financial Review • Source: The Tax Institute
Changes to the Individual income tax rates and thresholds from 1 July 2024 are proposed to be as follows:
- reduce the 19 per cent tax rate to 16 per cent, and
- reduce the 32.5 per cent tax rate to 30 per cent, and
- increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000, and
- increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.
Please note – these changes are not yet law.
We will certainly keep you updated if & when any changes are legislated.
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