Budget 2018 Income Tax Changes: Here's How Much You'll Save

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Yesterday, the Senate gave the all-clear to the Turnbull government's long-term plan to reduce income tax rates for the majority of Australians, the first stage of which will begin in less than two weeks on July 1. Now, let's have a look at the changes — and how much you'll potentially save.

Currently, there are four tax rates above the $18,200 low-income threshold: 19 per cent ($18,201-$37,000), 32.5 per cent ($37,001-$87,000), 37 per cent ($87,001-$180,000) and 45 per cent ($180,001+).

The end game is to get rid of the 37 per cent rate and move those affected into the 32.5 per cent bracket. While this won't happen until 2028, some pieces will be implement in the 2018-19 financial year, with further adjustments occurring over the next ten years.

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The most immediate change is the shift of the upper end of the 32.5 per cent bracket, from $87,000 to $90,000. This means if you were in that $3000 zone, you'll have a bit more in your pay starting July 1.

In addition, the government will be providing tax "relief", in the form of a lump sum, as part of your tax return.If you're wondering how much you'll save, as well as the lump sum you'll be entitled to, consult the table below. Please note the figures here are cumulative.

Cumulative tax paid / tax relief, 2018-19 to 2024-25

Taxable income: $30,000 $50,000 $80,000 $90,000
Paid Relief Paid Relief Paid Relief Paid Relief
2018-19 $2197 $200 $8017 $530 $18,617 $530 $22,067 $665
2019-20 $4394 $400 $16,034 $1060 $37,234 $1060 $44,134 $1330
2020-21 $6591 $600 $24,051 $1590 $55,851 $1590 $66,201 $1995
2021-22 $8788 $800 $32,068 $2120 $74,468 $2120 $88,268 $2660
2022-23 $10,985 $1000 $40,075 $2660 $93,075 $2660 $110,325 $3335
2023-24 $13,182 $1200 $48,082 $3200 $111,682 $3200 $132,382 $4010
2024-25 $15,379 $1400 $56,089 $3740 $130,289 $3740 $154,439 $4685

Business Insider Australia

Taxable income: $120,000 $160,000 $200,000
Paid Relief Paid Relief Paid Relief
2018-19 $34,217 $215 $49,897 $135 $67,097 $135
2019-20 $68,434 $430 $99,794 $270 $134,194 $270
2020-21 $102,651 $645 $149,691 $405 $201,291 $405
2021-22 $136,868 $860 $199,588 $540 $268,388 $540
2022-23 $169,275 $2885 $247,595 $2565 $333,595 $2565
2023-24 $201,682 $4910 $295,602 $4590 $398,802 $4590
2024-25 $234,089 $6935 $341,809 $8415 $458,809 $11,815

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Here's how much income tax you will save from next month [Business Insider Australia]


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