It is only April, yet we have already seen a significant tax development that will affect the majority of Australians — the Government’s decision to ‘redesign’ the Stage 3 income tax cuts.
The table below sets out the redesigned personal income tax rates and thresholds that are now proposed to apply from 1 July 2024.
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The following table sets out the tax rates and thresholds that would have applied if the Stage 3 tax cuts had gone ahead as originally legislated.
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This means that:
- Taxpayers whose taxable income exceeds $18,200 but does not exceed $45,000 will now receive a tax cut – they would not have under the legislated Stage 3 tax cuts.
- Taxpayers whose taxable income exceeds $45,000 but is less than $146,486 will receive a larger tax cut than they would have received under the legislated Stage 3 cuts.
- Taxpayers whose taxable income is $146,486 or higher will receive a smaller tax cut than they would have received under the legislated Stage 3 cuts.
The tax-free threshold ($18,200) will remain unchanged so taxpayers whose taxable income does not exceed $18,200 will not benefit from the redesigned Stage 3 tax cuts.