individual tax Archives - Accounts NextGen

Future income tax cuts for individuals

Future income tax cuts for individuals

Changes to the individual tax rates have been proposed as part of a 3 phase package announced in the 2019 federal budget. The proposed changes to the tax rates would commence from 1 July 2022, but also include a proposal to change personal tax offsets for the 2018/19 income year.

Phase 1: Increasing personal tax offsets

The first phase of the income tax plan is to increase the low and middle income tax offset (LAMITO), beginning in the 2018/19 income year.

The LAMITO was legislated last year from a 2018 federal budget announcement, which offers a base offset of $200 for individuals earning less than $37,000. The offset then rises up to $530 for middle income earners between $48,000 and $90,000 and phases out at $126,000.

The proposal in the current tax plan will increase the base offset to $255 and increase the maximum offset to $1,080. The plan still proposes that individuals earning above $126,000 will receive no offset.

There is no change to the operation of LAMITO, in that it will run for 4 years from 2018/19 to 2021/22. Further information on the changes to the offset are included in this separate iQ event.

Phase 2: Future changes to the bracket

The second phase of the income tax plan proposes to change the top of the 19% tax bracket from $41,000 to $45,000 from 1 July 2022.

Also, as this date will mark the end of the LAMITO 4 year run, the base rate will be incorporated into the low income tax offset. Currently, the low income tax offset is due to increase from $445 to $645 from 1 July 2022 as per the 2018 legislated changes to personal income tax.

The proposal will be to change the offset from $645 to $700 to coincide with the $55 increase to the base rate of LAMITO.

Phase 3: Future changes to the tax rate

The third phase of the income tax plan proposed to move the 32.5% tax bracket down to 30% from 1 July 2024. The change in the tax rate will be at the same time the 37% tax bracket is due to be removed from the income tax rates.

Therefore, the proposal is to change the middle tax bracket from 1 July 2024 to be 30% income tax for incomes between $45,000 and $200,000.

Proposed tax brackets (tables)


2018/19 to 2021/22 income years
MinimumMaximumTax on minimumTax rate on excess
180,001and above54,09745.0%


2022/23 to 2023/24 income years
MinimumMaximumTax on minimumTax rate on excess
180,001and above51,66745.0%


2024/25 and future income years
MinimumMaximumTax on minimumTax rate on excess
200,001and above51,59245.0%

Our Offices

Melbourne Office
Level 19,
180 Lonsdale Street
Melbourne, VIC 3000

(03) 9015 8540

View on Map

Sydney Office
Level 20 & 21 tower 2 Darling Park ,
201 Sussex St, Sydney NSW 2000

View on Map

Brisbane Office
Level 27,
480 Queen St
Brisbane, QLD 4000

(07) 3011 6316

View on Map

Geelong Office
73 Malop Street Geelong VIC 3320

(03) 52982000

View on Map

Adelaide Office
Level 5, Tower 2,
121 King William Street
Adelaide, SA 5000

(08) 8423 4554

View on Map

Perth Office
Level 29 221,
St Georges Terrace
Perth, WA 6000

(08)9288 0603

View on Map

Available 24/7
1300 NXTGEN (698 436)


Translate »
Book Appointment