What do the new tax cuts mean for you, based on your salary?

High-income earners will take a $4,546 haircut on tax cuts Australians were told had been locked in, but middle-income earners will be up to $804 better off under Labor’s plan to change marginal tax rates.

The amendments to the planned tax cuts due to come into effect on July 1 include foregoing some of the planned tax cuts for workers earning $135,000 to $200,000 a year, and lowering the bottom marginal tax rate from 19 per cent to 16 per cent.

Workers earning $130,000 will receive a tax cut. Workers on $40,000, who were originally slated to get no tax cut, will also receive a benefit.

The changes effectively deliver a greater tax cut to all taxpayers earning up to $150,000, while offering a smaller benefit to those earning more.

40,000 4,142 654
50,000 6,717 125 929
60,000 9,967 375 1,179
70,000 13,217 625 1,429
80,000 16,467 875 1,679
90,000 19,717 1,125 1,929
100,000 22,967 1,375 2,179
110,000 26,217 1,625 2,429
120,000 29,467 1,875 2,679
130,000 33,167 2,575 3,379
140,000 36,867 3,275 3,729
150,000 40,567 3,975 3,729
160,000 44,267 4,675 3,729
170,000 47,967 5,375 3,729
180,000 51,667 6,075 3,729
190,000 56,167 7,575 4,529
200,000 60,667 9,075 4,529
210,000 65,167 9,075 4,529
220,000 69,667 9,075 4,529
230,000 74,167 9,075 4,529
240,000 78,667 9,075 4,529
250,000 83,167 9,075 4,529

Table: Financial Review • Source: The Tax Institute

Changes to the Individual income tax rates and thresholds from 1 July 2024 are proposed to be as follows:

  • reduce the 19 per cent tax rate to 16 per cent, and
  • reduce the 32.5 per cent tax rate to 30 per cent, and
  • increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000, and
  • increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.

Please note – these changes are not yet law.

We will certainly keep you updated if & when any changes are legislated.

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