The government delivered tax cut package of $158 billion plan on 4 July 2019 over the following three stages:
- FY2018 – 2019 Tax cut applies to people earning less than $126,000 unevenly
Below $37,000, tax cut $255
Between $37,001 - $48,000, tax cut $255 plus 7.5% of what is over $37,000
Between $48,001 - $90,000, tax cut 1,080 flat
Between $90,001 - $126,000, tax cut $1,080 less 3% of what is over $90,000
Over $126,000 – nil
You will get the tax cut when you lodge your tax return for 2019. Tax cut comes as a form of tax offset, so if you don’t have any tax to pay, say your income is $20,000, you won’t get $255 tax refund in your bank account. The cut is meant to reduce the tax amount you are paying.
A lot people do not realise back in 2018 – 2019 budget, the government already announced tax cut for low- and middle-income earner up to $530. Last week’s bill is more generous than the previous one.
The stage one tax cut will last for 4 years from 2019 till 2022.
- On 1 July 2022, the 2nd stage of tax cut will take into effect which has several measures.
37% tax bracket will be lifted from current $90,000 to $120,000
19% tax bracket will be lifted from current 37,000 to $41,000
- Stage 3 tax cut starts from 1 July 2024 which will see people earning between $45,000 - $200,000 to have flat rate of 30%.