YOUtax Blog

Budget 2018: Individuals

Posted by Rebel Beckett on Jul 11, 2018 10:45:10 AM

The Government announced changes to the Budget in May 2018. 

See how the changes affect individuals below. 

Bracket Adjustment:

As of 2018-19FY the marginal tax rate bracket will increase from $87,000 to $90,000. With the intention to confront bracket creep, the amendment will stop a further 200,000 Australians from entering the higher marginal tax bracket of 37%.

As of 2022-23FY further adjustments to the marginal tax brackets will be implemented. These changes will see the increase of the 19% threshold from $37,000 to $41,000 and the increase of the 32.5% threshold from $90,000 to $120,000.

By 2024-25FY the 37% bracket will be removed completely with the 32.5% threshold being increased to $200,000.



Low and Middle Income Tax Offset (LAMITO)

As of 2018-19FY till the 2021-22FY, the government will target income earners up to $125,333 and provide a non-refundable tax offset up to the value of $530 per annum.

The low and middle income tax offset will provide a benefit of up to $200 for individuals with an income up to $37,000.

The low and middle income tax offset will increase by 3 cents per dollar up to the maximum value of $530 for individuals with an income between $37,000 and $48,000.

Taxpayers with incomes between $48,000 and $90,000 will be eligible for the maximum $530 offset.

The offset will decline by 1.5 cents per dollar for those earning between $90,001 and $125,333.

This will not affect your eligibility for the Low Income Tax Offset (LITO).



Medicare Levy

As of 2017-18FY the Medicare Levy thresholds for singles, families, seniors and pensioners will increase, affecting low-income earners. 

The threshold for singles will be increased from $21,655 to $21,980. The family threshold will be increased from $36,541 to $37,089.

For each dependent child or student, the family income thresholds increase by a further $3,406, instead of the previous amount of $3,356.

For single seniors and pensioners, the threshold will be increased from $34,244 to $34,758. The family threshold for seniors and pensioners will be increased from $47,670 to $48,385.

The government has confirmed they will not be increasing the Medicare Levy from 2% to 2.5%. 

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