The Government is now giving individuals a greater incentive to work without being taxed more by making a start to personal income tax relief.
The changes will take place from 1 July 2016 and will prevent average full-time wage earners from moving into the second top tax bracket until 2019-2020, by increasing the 32.5 per cent tax threshold from taxable incomes of $80,000 to $87,000. This will affect around 500,000 taxpayers who will no longer face the 37 per cent marginal tax rate.
The policy objective is designed to keep those earning average wages in the middle tax bracket for longer. This measure will reward hard working Australians for doing more overtime, picking up more shifts, taking a promotion or a better new job, without being penalised by paying more tax through the higher rate.
In addition, the Government will increase the low-income thresholds for the Medicare levy and surcharge from the 2015/16 income year, so that low–income taxpayers can continue to be exempted from paying the Medicare levy.
For more information, contact us at Leenane Templeton on 02 4926 2300 or email success@leenanetempleton.com.au
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