The federal government has announced changes to the planned Stage 3 tax cuts from 1 July 2024.
The changes to the Coalition’s original Stage 3 tax cuts have been made to focus on low and middle income earners to help with cost-of-living pressures.
The following changes were announced:
- The Lowest individual tax rate will be reduced from 19 cents down to 16 cents.
- The Second individual tax rate will be reduced from 32.5 cents to 30 cents and will now apply from an income threshold of $45,000 to $135,000.
- The Third individual tax rate of 37% rate will be retained and will now apply to an annual income threshold of $135,000 to $190,000
- The Fourth individual tax rate of 45% was also retained and will now apply to an annual income threshold of $190,000.
Based on the above changes you will receive the following tax cuts based on the Coalition’s original Stage 3 Tax Cuts:
| Taxable Income | Tax cut under original stage 3 | Tax cut under revised stage 3 | Difference |
|---|---|---|---|
| $20,000 | $0 | $0 | $0 |
| $30,000 | $0 | $354 | $354 |
| $40,000 | $0 | $654 | $654 |
| $50,000 | $125 | $929 | $804 |
| $60,000 | $375 | $1,179 | $804 |
| $70,000 | $625 | $1,429 | $804 |
| $80,000 | $875 | $1,679 | $804 |
| $90,000 | $1,125 | $1,929 | $804 |
| $100,000 | $1,375 | $2,179 | $804 |
| $120,000 | $1,875 | $2,679 | $804 |
| $140,000 | $3,275 | $3,729 | $454 |
| $160,000 | $4,675 | $3,729 | ($946) |
| $180,000 | $6,075 | $3,729 | ($2,346) |
| $200,000 | $9,075 | $4,529 | ($4,546) |
Please contact your DFK Benjamin King Money representative if you have any questions about how you may be affected by these tax cut changes.