The Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 received royal assent on 21/6/2018. This bill introduces the Personal Income Tax Plan announced in the 2018 Federal Budget. The tax plan will be introduced over a seven year period and involves 3 steps:
Step 1: 2018-19 to 2021-22
- Introduction of a Low and Middle Income Tax Offset of up to $530pa, in addition to Low Income Tax Offset (LITO), from 2018-19 to 2021-22
- Extend the top threshold for the 32.5% personal income tax bracket from $87,000 to $90,000
Step 2: 2022-23 to 2023-24
- Extend the top threshold for the 19% personal income tax bracket from $37,000 to $41,000
- Extend the top threshold for the 32.5% personal income tax bracket from $90,000 to $120,000
- Increase LITO from $445 to $645
Step 3: 2024-25 and later financial years
- Removal of the 37% personal income tax bracket
- Extend the top threshold for the 32.5% personal income tax bracket from $120,000 to $200,000
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