Personal income tax cuts (2018–2025): What it means for you
The majority of Australians are already enjoying tax cuts and increased financial support in the form of tax offsets, with more to come.
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The Australian income tax system for individuals is based on marginal tax rates and income thresholds. The higher a person’s taxable income in a financial year (July 1 to June 30), the more tax they pay.
In addition, most Australians pay a Medicare levy of 2% of their taxable income. Those earning higher taxable income amounts are also liable for an additional Medicare levy surcharge of 1 to 1.5%.
A person’s taxable income sources can include:
An individual can reduce their taxable income by claiming tax deductions. Common tax deductions include:
Individuals can also reduce their tax payable if they are eligible for tax offsets, such as:
It’s important to understand that unlike tax deductions, tax offsets can only be used to reduce the amount of tax payable, they can’t be used to generate a tax refund from the Australian Taxation Office (ATO). Any unused tax offset is non-refundable.
The majority of Australians are already enjoying tax cuts and increased financial support in the form of tax offsets, with more to come.
The amount of tax you pay will depend on your assessable income less a host of tax deductions and offsets. Here are the latest rates and thresholds.
If you are eligible for the Age or DVA pension you could be in line for a handy tax rebate, depending on your taxable income and relationship status.
Our income tax calculator will show you what offsets you may be eligible for, as well as your marginal tax rate and how much income tax you effectively pay.
Low-income earners may be eligible to reduce their tax bill by as much as $700, without lifting a finger. Check our guide to who’s eligible and for how much.
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