"The change benefits all taxpayers earning more than $18,201 due to the progressive tax system."
Tax Rate Reduction Takes Effect: Lower Rate for Middle Incomes
The federal government has implemented a tax rate reduction on income between $18,201 and $45,000, from 16% to 15%, effective from today. The tax brackets themselves remain unchanged.
The new rates are as follows:
- $0 – $18,200: $0
- $18,201 – $45,000: 15 cents for each $1 over $18,200
- $45,001 – $135,000: $4,020 plus 30 cents for each $1 over $45,000
- $135,001 – $190,000: $31,288 plus 37 cents for each $1 over $135,000
- $190,001 and over: $51,638 plus 45 cents for each $1 over $190,000
Note: The above rates exclude the Medicare levy of 2%.
For taxpayers earning $45,000 or more, the annual tax saving is $268 (approximately $5 per week).
This policy was announced in the previous year's federal budget. The change benefits all taxpayers earning more than $18,201 due to the progressive tax system, providing a modest but welcome boost to take-home pay.