General News
29 July, 2024
How much will tax cuts save me?
With the Australian Government announcing a range of tax cuts from July 1, it leaves many wondering - how much can I expect to save?
The government’s redesign of the stage three tax cuts, which came into effect this month, has reduced the amount of overall tax low and middle income earners pay, which for many will be reflected in take-home pay, each payday.
The breakdown from the government and Australian Taxation Office is as follows, per tax bracket:
- $18,201 - $45,000 - the 19 percent tax rate was reduced to 16 percent
- $45,001 - $135,000 - the 32.5 percent tax rate was reduced to 30 percent
- $135,000 - $190,000 - the 37 percent tax threshold was increased from $120,000 to $135,000
- Over $190,000 - the 45 percent tax threshold was increased from $180,000 to $190,000
But what does this mean for me?
With the median annual income in Maryborough sitting at $45,500 (2021 Census), the average local resident can expect to see an extra $817 make its way into their back pocket with each year.
If that annual income is $60,000, the number increases to $1179. If you earn $80,000 per year, the annual tax cut will see an extra $1679 make its way to your account compared to the last financial year.
For those earning between $50,000 and $120,000, this represents an $804 increase to the previously proposed stage three tax cuts.
However, unlike previous tax cut schemes these amounts won’t be returned to tax payers as a lump sum come tax time.
Residents should have already noticed a slightly higher weekly or fortnightly paycheck, reflecting the tax cut change.
In addition, there will be an uprating in the Medicare low-income threshold. The Medicare levy is 2 percent of your taxable income but is not payable by those on low incomes.
For the 2024-25 year, the threshold exempts people earning $26,000 or less from paying the Medicare levy. After that, the levy increases gradually and the full 2 percent levy is paid by anyone earning more than $32,500.
This represents a 7.1 percent increase on the 2023-24 thresholds, in line with inflation.
Importantly, the tax-free threshold remains unchanged — meaning those who earn less than $18,200 in a financial year will not pay tax.
These tax cuts have been designed to make a tangible difference year-round for the every day Australian, and to assist with increasing cost of living expenses.
When it comes time to file your tax return for the 2023/24 financial year (July 1, 2023 to June 30, 2024) there is a deadline of October 31 if you’re doing your tax yourself.
If you use a tax agent, there is an extended tax return deadline that does vary, but can be as late as May 15. However, the appointment with your tax agent must be booked before October 31.
Tax returns are generally paid within 12 days of the return being filed by either yourself, or your tax agent.