ADR Wealth | Superannuation | Age Pension | Investment | BrisbaneADR Wealth | Superannuation | Age Pension | Investment | Brisbane
Wealth Strategies Specialist
  • Home
  • About
    • Testimonials
  • Services
    • Earn Money
    • Paying Off Debt
    • Insurance
    • Kids & Money
    • Nearing Retirement
  • Advice Process
  • Blog
  • Get in touch
  • Portal Login

Follow Us

E: d.rylah@adrwealth.com.au | Portal Login
Majority of working Aussies to benefit from personal income tax cuts
December 8 2020

Majority of working Aussies to benefit from personal income tax cuts

admin Money Management, Saving, Tax

Tax cuts proposed in the recent Federal Budget were passed in parliament on Friday 9 October, and you might see some of the benefits before Christmas. 

 

The government has brought forward tax cuts originally planned for 1 July 2022 and backdated them to 1 July 2020. Plus, low and middle-income earners are still able to benefit from existing tax offsets. 

 

Has my marginal tax rate changed? 

 

The upper thresholds have increased for some tax brackets, as highlighted in the table below. 

Marginal tax rate* %  Original threshold income range $ pre-budget New threshold income range $ 2020/21
0 0 – 18,200 0 – 18,200
19 18,201 – 37,000 18,201 – 45,000
32.5 37,001 – 90,000 45,001 – 120,000
37 90,001 – 180,000 120,001 – 180,000
45 > 180,000 > 180,000

 

(*excluding 2 % Medicare Levy) 

 

Can I benefit from the tax offsets? 

 

If you earn up to $126,000 per year, you may be eligible for the low and middle income tax offset (LMITO). This was previously introduced as a temporary measure and scheduled to end when the 1 July 2022 tax cuts kicked off. But the good news is that despite bringing forward these tax cuts, the government has kept the LMITO for the 2020–21 financial year. 

And, if you earn less than $66,667 per year, you may be eligible for an additional tax offset called the low income tax offset (LITO). As part of this package of tax cuts, this tax offset was increased from $450 to $700. 

 

How much will I save from the tax cuts? 

 

The below table shows indicative tax cuts, based on the legislative changes for an individual in 2020-21, to the tax rates, thresholds, and offsets that were applicable for 2020-21 (before these changes): 

Source: Lower Taxes Budget 2020-21 fact sheet (extract) – Individual below Age Pension age


When will I receive the new tax savings? 

 

Your take-home pay should reflect the new rates before Christmas. The Australian Taxation Office (ATO) has given employers until 16 November to make changes to payroll processes and systems. 

 

As you’ll have already paid personal income tax at the original rate since 1 July this year, you’ll receive your entitlement to the reduced tax payable for the entire 2020–21 income year when you lodge your income tax return. 

 

To discuss how to make the most of changes to your tax talk to the team at ADR Wealth.

Source: AMP 

Forward this article to a friend
Be a smart gift-giver this holiday season Tax-effective ways to boost your super

Related Posts

Love and money – achieving financial harmony 

Budgeting, Financial Planning, Lifestyle, Money Management

Love and money – achieving financial harmony 

How much do I need to start investing?

Financial Planning, Investment, Saving

How much do I need to start investing?

Give your finances a shake out 

Budgeting, Financial Planning, Money Management, Saving, Spending

Give your finances a shake out 

Search

Recent Posts

  • Love and money – achieving financial harmony 
  • How much do I need to start investing?
  • Give your finances a shake out 
  • Budgeting for baby: What you need to know 
  • Australian housing finance is booming – but can it continue? 

Categories

  • Budgeting
  • Debt
  • Financial Planning
  • Insurance
  • Investment
  • Lifestyle
  • Money Management
  • Saving
  • Spending
  • Superannuation
  • Tax
  • Uncategorized

ADR Edge

Sign up to our Newsletter

* indicates required

Norwest Central
Suite 610/12 Century Circuit
Norwest NSW 2153

M: 0428 092 928
E: d.rylah@adrwealth.com.au

Our Services

  • Earn Money
  • Paying Off Debt
  • Nearing Retirement
  • Insurance
  • Kids & Money
© ADR Wealth 2019 | Privacy Policy
AD Rylah Trading Pty Ltd t/as ADR Wealth is a Corporate Authorised Representative of Synchron, AFS Licence No. 243313

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.