Announced in the 2019-20 Federal Budget, the Government’s  changes to the Personal Income Tax Plan has now law.

2018-19

Starting from the financial year 2018-19, there will be an increase of the maximum amount and the base amount of the low and middle income tax offset (LMITO), from $530 to $1,080 p.a. and $200 to $255 p.a. respectively. Below shows the new LMITO for each taxable income level:

Taxable income Low and middle income tax offset (LMITO)
$37,000 or less $255
$37,001 – $48,000 $255 + 7.5% of your taxable income that exceeds $37,000
$48,001 – $90,000 $1,080
$90,001 to $126,000 $1,080 – 3% of your taxable income that exceeds $90,000

Changes will be effective until the 2021-22 financial year.

Don’t worry if you have lodged your 2018-19 tax return. The ATO is implementing the necessary system changes so you will received any increase to the LMITO you are entitled to. Tax refund will be deposited in your nominated bank account if any.

If you haven’t lodge your 2018-19 tax return, then you need to take these changes into account when doing your tax return.

2022-23

From 2022-23 financial year, there will be a change of the personal income tax bracket which the threshold of the 19% tax rate will raise from $41,000 to $45,000. Besides, the maximum amount of the low income tax offset (LITO) will increase from $645 to $700. Details show as below:

Individual taxable income Tax rate Tax payable
$18,200 or less
$18,201 – $45,000 19% 19% of your taxable income that exceeds $18,200
$45,001 – $120,000 32.5% $5,092 + 32.5% of your taxable income that exceeds $45,000
$120,001 – $180,000 37% $29,467 + 37% of your taxable income that exceeds $120,000
$180,001 or above 45% $51,667 + 45% of your taxable income that exceeds $180,000

 

Taxable income Low income tax offset (per annum)
$37,500 or less $700
$37,001 – $45,000 $700 – 5% of your taxable income that exceeds $37,000
$45,001 – $66,667 $325 – 1.5% of your taxable income that exceeds $45,000

 

2024-25

Last but not lease, starting from the 2024-25 income year and onwards, the tax rate of 32.5% will drop to 30%:

Taxable income Tax rate Tax payable
$18,200 or less
$18,201 – $45,000 19% 19% of your taxable income that exceeds $18,200
$45,001 – $200,000 30% $5,092 + 30% of your taxable income that exceeds $45,000
$200,001 or above 45% $51,592 + 45% of your taxable income that exceeds $200,000

Reference

https://www.ato.gov.au/Tax-professionals/Newsroom/Income-tax/Low-and-middle-income-tax-offset-now-law/?=redirected_atoo_agentlmito

https://www.ato.gov.au/General/New-legislation/Lower-taxes-for-hard-working-Australians–Building-on-the-Personal-Income-Tax-Plan/

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