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.