How Will the 2019 Tax Cut Affect You?

How Will the 2019 Tax Cut Affect You?

Over $158 billion should start flowing into taxpayers bank accounts from July after the Federal Government’s income tax cuts package passed through Parliament last week.

The updated legislation for the Personal Income Tax Plan is the second major tax cut in the past two years and will deliver relief and stimulate economic growth over time.

There has been a small adjustment to the top threshold of the 32.5% tax bracket which will increase from $87,000 to $90,000.

To show how the rates compare to the thresholds now, below is an updated table under the Government’s enhanced plan.

But one of the most important changes is to the low and middle income tax thresholds. Individual taxpayers earning below $37,000 will get up to $255 in tax relief, with those earning between $37,001 and $47,999 getting $255 back plus 7.5% above $37,000.

Higher earning taxpayers between $48,000 and $90,000 will receive the maximum tax relief of $1,080 and those earning between $90,001 and $126,000 will get relief of $1,080, but minus 3% above $90,001.

With this additional tax relief rewarding hard-working Australians, supporting consumption growth and easing the cost of living pressures for low and middle income earners, it will be putting more money back in their pockets to spend, save or invest. Overall this new budget will assist more than 10 million Australians, with around 4.5 million individuals receiving the full offset of $1,080 for the 2018 – 2019 income year.

If you want to work out just how much exactly you’ll get back this tax cut, the Australian Government’s Tax Relief Estimator is a helpful tool to always have on hand.