Income Tax Rates
There were no changes announced to individual income tax rates. The current income tax rates for residents (excluding the Medicare levy) are as follows:
|0 – 18,200||Nil|
|18,201 – 37,000||19c for each $1 over $18,200|
|37,001 – 87,000||$3,572 plus 32.5c for each $1 over $37,000|
|87,001 – 180,000||$19,822 plus 37c for each $1 over $87,000|
|180,001 and over||$54,232 plus 45c for each $1 over $180,000|
For the 2016/17 income year, an additional 2% temporary budget repair levy also applies for taxable incomes above $180,000. The Budget did not extend this levy beyond 30 June 2017.
Medicare levy to increase from 2.0% to 2.5%
The Medicare levy will be increased from 2.0% to 2.5% of taxable income from 1 July 2019, raising approximately $8 billion over the forward estimates to fund the shortfall in the NDIS.
Other tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased.
Medicare levy — low income thresholds to increase
The Medicare levy low-income thresholds for singles, families, and seniors and pensioners will increase from the 2016/17 income year.
The increases take into account movements in the consumer price index so that low-income taxpayers generally continue to be exempted from paying the Medicare levy.
New HELP repayment thresholds and rates to be introduced
For the 2017/18 year the:
- minimum repayment threshold is $55,874 at a repayment rate of 4%; and
- maximum repayment threshold is $103,766 at a repayment rate of 8%.
From 1 July 2018 a new minimum repayment threshold of $42,000 will be established with a 1.0% repayment rate. The repayment rate increases progressively with income with a maximum rate of 10% to apply from $119,882.
There are various property related changes which will impact individuals. Please refer to the property section of the budget update.