Tax cuts from the Budget are now being implemented. Find out what that means for you
You might want to take a close look at your pay slip this cycle.
Some us will be seeing a bit more money in our accounts.
It’s all because of those tax cuts announced in the Federal Budget a few weeks ago.
The cuts passed the Senate, and the ATO has now updated the tables employers use to withhold your tax.
Great. How much will I get?
If you’re earning roughly between $48,000 and $90,000 you’ll be seeing about $20 per week extra.
People earning more than that will see a larger benefit, up to a maximum of $2,430 per year.
The middle tax brackets have changed, so you can earn slightly more money and still only pay the lower rate.
The upper limit of the 19 per cent tax bracket has risen from $37,000 to $45,000 and the 32.5 per cent upper threshold has lifted from $90,000 to $120,000.
|Taxable income||Tax on this income|
|0 to $18,200||Nil|
|$18,201 to $45,000||19 cents for each $1 over $18,200|
|$45,001 to $120,000||$5,092 plus 32.5 cents for each $1 over $45,000|
|$120,001 to $180,000||$29,467 plus 37 cents for each $1 over $120,000|
|$180,001 and over||$51,667 plus 45 cents for each $1 over $180,000|
Source: Australian Taxation Office
Wait. I haven’t seen any extra money yet. Why?
Don’t panic just yet.
The tables were updated from October 13, so if you’re paid on a weekly basis and your employer has updated their systems, you might already have the money in your pocket.
But if you’re paid on a fortnightly or monthly basis, you will have to wait a bit longer.
The ATO has given employers until November 16 to update their payroll systems, so the timing will be slightly different for each workplace.
If my employer is slow to update, will I miss out on that money?
Some of the benefits will be paid in a lump sum when you put in your tax return next year.
The tax cuts will be backdated to July 2020, so for the period between July and October or November (whenever your employer updates their systems) you’ll get that benefit in a lump sum when you put in your tax return.
Don’t forget you may also get the one-off bonus when you file.
People earning between $37,000 and $126,00 will also get the low- and middle-income tax offset (worth up to $1,080, depending on your salary).
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