Published on July 5, 2019 4:24 am, by Pete Lalor
The government succeeded in having their proposed ‘tax cuts’ approved by parliament yesterday. That means about 10 million Australians can now expect to pay less tax. For some the savings start next week, but for others it will take a couple of years.
The ‘tax cuts’ come as a mix of tax offsets and changes in tax brackets. Tax offsets will be available immediately to tax payers who earn up to $126,000 a year. These tax offsets will be credited against tax you would have otherwise paid when you lodge your tax return. Keep in mind that these offsets are non-refundable. In other words, if you don’t pay enough tax to use up the total offset you wont be issued a refund for the unused amount.
Don’t worry if you’ve already lodged your 2018/19 tax return, the ATO will transfer and additional refund amount into your bank account, you don’t need to do anything extra.
Here’s how the offsets and cuts work for the 2018/19, 2019/20, 2020/21 and 2021/22 years:
If you earn up to $37,000 (about 2.3 million people)
If you earn between $37,001 and $47,999 (about 1.7 million people)
If you earn between $48,000 and $90,000 (about 4.5 million people)
If you earn between $90,001 and $126,000 (about 1.6 million people)
If you earn more than $126,000
Changes in 2022/23 and 2024/25
More information on the changes is available from the Australian Taxation Office.
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.
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.