Money In Your Pocket - More Personal Tax Cuts
09.06.08
The Government has confirmed it will deliver in full the tax cuts it announced during the 2007 election campaign.
We are expecting the following changes to individual tax rates:
From 1 July 2008:
Taxable income ($) Rate (%)
0 – 6,000 0
6,001 – 34,000 15
34,001 – 80,000 30
80,001 – 180,000 40
180,000+ 45
From 1 July 2009:
Taxable income ($) Rate (%)
0 – 6,000 0
6,001 – 35,000 15
35,001 – 80,000 30
80,001 – 180,000 38
180,000+ 45
From 1 July 2010:
Taxable income ($) Rate (%)
0 – 6,000 0
6,001 – 37,000 15
37,001 – 80,000 30
80,001 – 180,000 37
180,000+ 45
The Government also set an aspirational tax goal over six years for a personal income tax system which reduces the number of rates from four to three with a personal income tax scale of 15%, 30% and 40%.
More for low income earners
From 1 July 2008: the low income tax offset (LITO) is expected to increase from $750 to $1,200. If you’re eligible for the full LITO, you will not pay tax until your taxable income exceeds $14,000.
From 1 July 2009: LITO is expected to increase from $1,200 to $1,350. If you’re eligible for the full LITO, you will not pay tax until your taxable income exceeds $15,000.
From 1 July 2010: LITO is expected to increase from $1,350 to $1,500. If you’re eligible for the full LITO, you will not pay tax until your taxable income exceeds $16,000.
Medicare levy thresholds
Low income thresholds
With effect from 1 July 2007, the Medicare levy low income thresholds will be increased to:
- $17,309 for individuals;
- $29,207 for individuals who are in families; and
- $22,922 for pensioners below Age Pension Age.
Surcharge thresholds
With effect from 1 July 2008, the Medicare levy surcharge thresholds will increase:
- for singles from $50,000 to $100,000; and
- for those who are members of a family from $100,000 to $150,000.
