Stage 3 Tax Cuts Explained

The Federal Government have today announced changes to the Stage 3 tax cuts which are to come into effect from the 1^st July 2024.

Background:

Initially the proposal included changes to the tax brackets, resulting in those earning between $45,001-$200,000 paying 30% on each dollar earned.

There was little  benefit to low income earners.

Changes to the stage 3 tax cuts have since been proposed and are outlined below.

What has changed:

Tax Brackets

The updated tax brackets which will come into effect on 1^st July 2024 now look like this:

• Less than$45,000 – 16% (a reduction as currently taxed 19%)
• $45,001 – $135,000 – 30% (currently 32.5% and bracket is $45g – $120G)
• $135,001 – $190,000 – 37% (currently the 37% bracket is $120G – $180G)
• $190,001 upwards – 45% (currently 45% bracket starts at $180G+)

It is expected that this change will reduce the tax benefits(that were proposed) to those earning above $200,000, whilst providing greater tax benefits to low income earners.

-Breana Vinecombe & David Gorman

Posted 25 January 2024

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