Employee Tax Cuts Pass Senate
In June the Senate passed personal income tax cuts in full giving a $144 billion windfall to income earners across Australia.
The income tax cuts come in 3 stages over 7 years:
- Stage 1 starts on 1 July 2018 which gives low to middle income earners an additional $530 per annum, and increases the 32.5% tax bracket from $87,000 to $90,000.
- Stage 2 starts on 1 July 2022, and would see the 19% tax bracket increase from $37,000 to $41,000, an increase in the low income tax offset from $445 to $645, and the 32.5% tax bracket increase from $90,000 to $120,000.
- Stage 3 starts on 1 July 2024 which will abolish the 37% tax bracket, applying 32.5% to incomes between $41,000 and $200,000. The rate above $200,000 would stay at 45%.
These changes were announced in May 2018 as part of the Federal Budget, and have now been passed by parliament.
For more detailed information on the tax cuts refer to the budget announcement available at this link: https://www.budget.gov.au/2018-19/content/factsheets/7-pitp.html