Australia Tax Cuts Calculator
Print| New Total Tax (2024-25) | $0 AUD |
The Australian Federal Government introduced historic personal income tax relief provisions—accelerating Stage 2 tax cuts and expanding the Low and Middle Income Tax Offset (LMITO). These reforms raised statutory tax bracket thresholds, lowered tax rates for middle-income earners, and delivered annual tax savings of up to $2,745 for Australian individual taxpayers.
Our free Income Tax Cuts Calculator – Australia Federal Budget computes your revised ATO personal income tax liability, Medicare levy, LMITO tax offset, and net tax savings.
How Australian Income Tax Cuts Are Calculated
Australian income tax calculations integrate ATO progressive resident tax brackets, the 2.0% Medicare levy, and statutory non-refundable tax offsets (LITO and LMITO).
The Australian Net Tax Payable Formula:
Gross Income Tax = Calculated via ATO Progressive Resident Tax Brackets
Medicare Levy = Taxable Income × 2.0%
Total Tax Payable = Gross Income Tax + Medicare Levy - Low Income Tax Offset (LITO) - LMITO Offset
Accelerated Statutory Tax Bracket Thresholds:
- $0 – $18,200: 0% (Tax-Free Threshold)
- $18,201 – $45,000: 19.0% (Upper threshold raised from $37,000 to $45,000)
- $45,001 – $120,000: 32.5% (Upper threshold raised from $90,000 to $120,000)
- $120,001 – $180,000: 37.0%
- Over $180,000: 45.0% (Top Marginal Rate)
Australian Tax Relief & LMITO Savings Reference Table
The table below details personal income tax savings across annual taxable income levels for Australian resident taxpayers:
| Taxable Annual Income | Previous Tax Payable | Revised Tax Payable (with LMITO) | Annual Tax Savings |
|---|---|---|---|
| $40,000 AUD | $4,947.00 | $3,887.00 | +$1,060.00 |
| $60,000 AUD | $11,847.00 | $9,687.00 | +$2,160.00 |
| $90,000 AUD | $21,747.00 | $19,587.00 | +$2,160.00 |
| $120,000 AUD | $34,147.00 | $31,402.00 | +$2,745.00 |
| $160,000 AUD | $49,747.00 | $47,002.00 | +$2,745.00 |
Step-by-Step Calculation Example
An Australian resident taxpayer earns a taxable salary of $80,000 AUD:
- Taxable Income: $80,000 AUD
- Medicare Levy Rate: 2.0% ($1,600 AUD)
- Max LMITO Offset Eligibility: $1,080 AUD
Step 1: Compute Gross Income Tax using ATO Tax Brackets
First $18,200 @ 0% = $0.00
$18,201 to $45,000 ($26,800 @ 19%) = $5,092.00
$45,001 to $80,000 ($35,000 @ 32.5%) = $11,375.00
Gross Income Tax = $5,092 + $11,375 = $16,467.00 AUD
Step 2: Add Medicare Levy (2%)
Medicare Levy = $80,000 × 0.02 = $1,600.00 AUD
Step 3: Subtract LMITO Tax Offset ($1,080 AUD)
Net Tax Payable = $16,467 (Tax) + $1,600 (Medicare) - $1,080 (LMITO) = $16,987.00 AUD
Result Summary:
Compared to pre-reform tax rules ($19,147 AUD tax), the taxpayer enjoys a net annual tax reduction of +$2,160.00 AUD.
Frequently Asked Questions (FAQ)
What is the Low and Middle Income Tax Offset (LMITO)?
LMITO was a statutory non-refundable tax offset provided by the ATO to individual Australian taxpayers earning up to $126,000 AUD, providing a maximum tax offset credit of up to $1,080 (later expanded to $1,500).
How does the Australian Medicare Levy work?
The Medicare Levy is a flat 2.0% tax on taxable income paid by most Australian residents to fund Australia’s public health system. High earners without adequate private health insurance may also incur the Medicare Levy Surcharge (1.0% to 1.5%).
Do non-residents qualify for Australian tax cuts?
Non-resident taxpayers for Australian tax purposes are taxed at foreign resident rates (32.5% from dollar one) and do not qualify for the $18,200 tax-free threshold or tax offsets like LMITO.