Money

What the 2018 Budget means for your hip pocket

Published on May 9, 2018 5:22 am, by

There is always a lot in a Federal Budget, but the 2 announcements that will have a direct and immediate impact on most people’s hip pockets are the Low & Middle Income Tax Offset and the changes to the $87,000 tax bracket. The extra cash from the Low & Middle Income Tax Offset will be available when you lodge your 2019 Tax Return (a long way off). The cash from changes to the $87,000 tax bracket should be available in your regular pay after 1 July 2018.

Here’s what the changes will mean for you.

Low & Middle Income Tax Offset

Annual IncomeAnnual Benefit
$0 - $20,000No benefit
$20,001 - $37,000$200
$37,001 - $48,000$200 - $530 (increasing at $0.03 for each $1 up to $530)
$48,001 - $90,000$530
$90,001 - $125,333$530 - $0 (decreasing at $0.015 for each extra $1 of income)
$125,333 +No benefit

Changes to the $87,000 tax bracket

Annual IncomeAnnual Benefit
$0 - $87,000No benefit
$87,001 - $90,000$0 - $135 (increasing at $0.045 for each additional $1 of income)
$90,001 +$135

Sure, there will be other changes to tax rates and tax brackets if the government wins the next election and implements the announcements they made last night – but a lot may change between now and then – so we’ll focus on those changes when they are a bit more certain and a bit closer.

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) or the Australian Taxation Office.

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Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.

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