The Government has announced a tax cut for Australian taxpayers. From 1 July 2024, there will be changes to various tax rates, and brackets, resulting in reduced tax for all taxpayers.
The tax cuts are designed to ease the cost-of-living pressures, while being cautious not to add to existing inflationary pressures.
What are the tax cuts?
From 1 July 2024, the Government will:
- Reduce the 19 per cent tax rate to 16 per cent (for incomes between $18,200 and $45,000).
- Reduce the 32.5 per cent tax rate to 30 per cent (for incomes between $45,000 and the new $135,000 threshold).
- Increase the threshold at which the 37 per cent tax rate applies from $120,000 to $135,000.
- Increase the threshold at which the 45 per cent tax rate applies from $180,000 to $190,000.
What is the effect of the tax cuts at various levels of income?
- A person on an average income of around $73,000 will get a tax cut of $1,504.
- A person earning $40,000 will get a tax cut of $654.
- A person earning $100,000 will get a tax cut of $2,179.
- A person earning $200,000 will still get a tax cut, which will be $4,529.
Generally, the tax cuts provided in this plan are larger than the tax cuts proposed by the previous Government. However, it provides lower tax cuts to those who are earning $150,000 and above per year.
Post 1 July 2024 tax table
Source: Prime Minister of Australia – 25/01/2024 Media Release