Income Tax Rates – Residents

The second round of tax cuts scheduled for 2015-16 as part of the compensation for households under the Clean Energy Future package (the Carbon Tax) will be deferred.  The personal tax rates will remain as follows:

2012-13 to 2014-15

2015-16 & later years

$

Rate

$

Rate

18,201

19%

18,201

19%

37,001

32.5%

37,001

33%

80,001

37%

80,001

37%

180,001

45%

180,001

45%

 

Medicare Levy

The Medicare Levy will be increased by 0.5% to 2.0% from 1 July 2014 to help fund DisabilityCare Australia (previously called the National Disability Insurance Scheme or NDIS).

The low income Medicare levy threshold will increase to $20,542 (up from $19,404) for individuals and $33,693 (up from $32,743) for couples.

Low Income Tax Offset

Currently the maximum Low Income Tax Offset (LITO) is $445.  Eligibility phases out from $37,000 of taxable income until $66,667 of taxable income, at which point no LITO is available.  The effect of the LITO is that individuals currently pay no tax on taxable incomes below $20,542.

From 1 July 2015 the LITO will be reduced to $300 and will phase out from $37,000 to $67,000 resulting in no tax payable on taxable incomes below $20,979.

Medical Expenses Offset

The net medical expenses offset will be phased out with transitional arrangements for those currently claiming.  Individuals who claim the offset in 2012-13 will be able to claim in 2013-14 and those that claim in 2013-14 will be able to claim in 2014-15.

Certain disability aids, attendant care or aged care will remain eligible during the transitional period until 1 July 2019.

Capping of Self-Education expense claims

From 1 July 2014 there will be a cap of $2,000 per annum on tax deductions for work related self-education expenses paid by individuals.

Importantly, this cap will not affect the Fringe Benefits Tax (FBT) implications of the provision of education to employees by their employer, except where the employee enters into a salary sacrifice arrangement relating to the cost of the education.
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https://www.williambuck.com/nz/tools/federal-budget-update-2013-14