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Budget 2016/17 – Personal tax income thresholds

Budget 2016/17 – Personal tax income thresholds

The 2016/17 Federal Budget did not burden individual taxpayers with any direct tax increases, however, as detailed in our earlier posts, some high income earners may be effected by a range of other announced measures, including reforms to superannuation.  Middle income earners have been afforded modest tax relief due to a proposed change to the threshold from which the second highest marginal tax bracket applies.

From 1 July 2016 the Government will increase the 32.5% personal income tax threshold from $80,000 to $87,000. This measure will prevent a reported 500,000 taxpayers facing the 37% marginal tax rate.

In announcing the Budget, the Government heralded that it will consider “further measures to reduce the burden of tax as fiscal settings allow”.

Personal Tax – current and new thresholds

Current thresholds Rates Proposed New thresholds (awaiting Parliamentary approval) Rates
$0 – $18,200 0% $0 – $18,200 0%
$18,201 – $37,000 19% $18,201 – $37,000 19%
$37,001 – $80,000 32.5% $37,001 – $87,000 32.5%
$80,001 – $180,000 37% $87,001 – $180,000 37%
$180,001+ 45% $180,001+ 45%

Proposed date of effect: 1 July 2016

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