Tax cuts have come into effect today, six months after the Federal Government released its revised ‘Stage 3’ tax cuts model.
It means that you will be paying less tax each pay cycle.
New tax cuts
Australia has a “progressive” tax system, which means the more you earn, the more tax you pay. You don’t pay tax for the first $18,200 earned in a year.
Every dollar earned above that is taxed.
In 2019, the then-Coalition Government legislated tax cuts, which the Labor Government revised when they came to power. Today the cuts come into place.
The new tax rates, starting today
$0 – $18,200: No tax
$18,201 – $45,000: 16 cents for every dollar in this range
$45,001 – $135,000: 30 cents for every dollar in this range
$135,001 – $190,000: 37 cents for every dollar in this range
$190,001+: 45 cents for every dollar in this range
The old tax rates
$0 – $18,200: No tax
$18,201 – $45,000: 19 cents for every dollar in this range
$45,001 – $120,000: 32.5 cents for every dollar in this range
$120,001 – $180,000: 37 cents for every dollar in this range
$180,001+: 45 cents for every dollar in this range
