How will the 2018 Federal Budget affect your Personal Income Tax?

The 2018 Federal Budget has been released, and how will your Personal Income Tax be affected?

The upper threshold for the 32.5% marginal tax rate bracket will increase from $87,000 to $90,000. It will apply from 2018-19.

Implemented to address the issue of bracket creep, it is anticipated that the adjustment to the marginal tax bracket will stop a further 200,000 Australians from entering the 37% marginal tax rate bracket.

Moreover, from 1 July 2022, there will be further adjustments to the brackets. The upper-income threshold for the 32.5% bracket will be increased from $90,000 to $120,000. In addition, the upper-income threshold for the 19% rate will increase from $37,000 to $41,000.

By 2024 the 37% bracket will be scrapped completely, leaving a 32.5% rate up to $200,000.

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